6-11. Compare two projects: Project A with an initialinvestment of $100,000 and returns of $30,000 per year forfive years, and Project B with $135,000 initial investmentand returns of $40,000 per year for five years. Which hasa higher IRR? Which should be selected if the companyMARR is 9% per year? (6.4)

Internal rate of return (IRR) is the discount rate that makes the net present value (NPV) of a…

Answered: 6-11. Compare two projects: Project A…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A project has an investment of $150,000 in year 0 and an additional investment of $20,000 at the end of year Project starts producing net cash inflows of $50,000 end of years years 2-7 (years 2 to years 7? What is the internal rate of return (IRR) of this Project? A 12.00% 13.77% 14.51% 15.00% 21.13%
4
If ε = 11% per year, what is the ERR for the cash flows of this project? Let MARR = 11% per year. 1 2 ΕΟΥ Cash Flow ($) 0 110 80 50 The ERR for the cash flows of this project is %. (Round to two decimal places.) 3 20 4 - 1,820 5 600 ***** 6 480 7 370 8 330 9 190 10 120
On August 6, 2021, Nike purchased new cash registers for their stores for $105,000 total. They will realize a $9,700 profit on the first Friday of every month ( Hint: You will need a calendar) starting on 9/3/2021 for an entire year (ending on July 1, 2022). What is the rate of return of this project? (X.X%)
6-25. Using an interest rate of 5%, compare the annual worth of two projects: Project A with an initial cost of $120,000 and annual returns of $35,000 for five years and Project B with an initial cost of $100,000 and annual returns of $30,000 for six years. (6.5)
A company purchase a piece of manufacturing equipment for an additional income. The expected income is $3,300 per semester. Its useful life is 9 years. Expenses are estimated to be $500 semiannually. If the purchase price is $44,000 and there is a salvage value of $4,500, what is the prospective rate of return (IRR) of this investment? The MARR is 10% compounded semiannually. Oa. IRR 6.02% semiannual Ob. IRR=4% semiannual Oc. IRR = 396 semiannual Od. IRR 6.23% semiannual =
Marian Plunket owns her own business and is considering an investment. If she undertakes the investment, it will pay $5,560 at the end of each of the next 3 years. The opportunity requres an initial investment of $1,390 plus an additional investment at the end of the second year of $6,950. What is the NPV of this opportunity if the interest rate is 2.2% per year? Should Marian take it?
Suppose $100 is invested today in a project that returns $330 in 6 years. Calculate the IRR of this investment.
YOUR FATHER PLANS TO INVEST P500,000.00 IN AN AUTO WASHING MACHINE WITH THE FF DATA: (20 PTS.) WASHING CAPACITY- 12 CARS/HR AT 8HRS OPERATION/DAY FOR 6DAYS A WEEK AND 50 WEEKS/YEAR CAR WASH CHARGE-P25/CAR MANUAL LABOR COST ( 2 WORKERS)-P25/HR PER WORKER PLUS A PAID VACATION BENEFITS OF 2 WEEKS PER YEAR MAINTENANCE COST-P8500.00/MONTH DESIRED RATE OF RETURN ON THE CAPITAL-20% PRESENTLY YOUR FATHER IS EARNING P25,000.00/MONTH AS A REGULAR EMPLOYEE AND WANTS TO CONCENTRATE ON THIS BUSINESS AND WANT TO RECOVER HIS INVESTMENT IN 5 YEARS. USING ROR AND AW METHOD OF ECONOMY STUDIES, SHOULD YOUR FATHER PROCEED WITH THE INVESTMENT?
7. You and your wife each contribute $500 per month into your 401(K) plan starting today. You only make these contributions for a period of 10 years, each year increasing the contribution by 3%. If you are 25 now, how much will your account be worth when you retire at age 65? The rate of return expected is 7%
ANSWER: ERR (i %) = 23.71%
An industrial firefighting truck costs $100,000. Savings in insurance premiums and uninsured losses from the acquisition and operation of this equipment is estimated at $60,000/yr. Salvage value of the apparatus after 5 yrs. is expected to be $20,000. A full-time driver during operating hours will accrue an added cost of $10,000/yr. What would the rate of return be on this investment? @ 40% present worth @ 50% present worth

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS