5.42 Consider the following two investment alternatives: Project's Cash Flow Al A2 -$15,000 -$25,000 1 9,500 2 12,500 7,500 PW(15%) ? 9,300 The firm's MARR is known to be 15%. (a) Compute PW(15%) for A1. (b) Compute the unknown cash flow X in years 2 and 3 for A2. (c) Compute the project balance (at 15%) of A1 at the end of period 3. (d) If these two projects are mutually exclusive alternatives, which one would you select?

5.42 Consider the following two investment alternatives: Project's Cash Flow Al A2 -$15,000 -$25,000 1 9,500 2 12,500 7,500 PW(15%) ? 9,300 The firm's MARR is known to be 15%. (a) Compute PW(15%) for A1. (b) Compute the unknown cash flow X in years 2 and 3 for A2. (c) Compute the project balance (at 15%) of A1 at the end of period 3. (d) If these two projects are mutually exclusive alternatives, which one would you select?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Bumgardner Incorporated has provided the following data concerning one of the products in its standard cost system. Inputs Direct materials Standard Quantity or Hours per Unit of Output 8.0 liters Standard Price or Rate $ 5.00 per liter The company has reported the following actual results for the product for April: Actual output Raw materials purchased 7,400 units 65,400 liters $ 5.70 per liter 59,210 liters Actual price of raw materials Raw materials used in production The raw materials price variance for the month is closest to: (Round your intermediate calculations to 2 decimal places.)
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Handerson Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate $ 6.00 per kilo $ 20.00 per hour $ 6.00 per hour Direct materials 8.5 kilos Direct labor 0.4 hours Variable overhead 0.4 hours The company reported the following results concerning this product in August. Actual output 3,200 units Raw materials used in production 29,030 kilos Purchases of raw materials 31,600 kilos Actual direct labor-hours 1,160 hours $ 195,920 $ 22,736 $ 7,540 Actual cost of raw materials purchases Actual direct labor cost Actual variable overhead cost The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The labor rate variance for August is:

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