6. A construction firm can achieve a $15,000 costsavings in Year-1 and increased by $2,000 eachyear for the next 5 years by converting their dieselengines for biodiesel fuel. At an interest rate of15%, what is the equivalent annual worth (A) of thesavings? [4]

Detailed explanation: Understanding the ProblemWe are tasked with finding the equivalent annual…

Answered: 6. A construction firm can achieve a…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5PA: Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated...

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A company is considering an investment that will cost $759,000 and have a useful life of 6 years. The cash flows from the project are expected to be $450,000 per year in the first two years then $170,000 per year for the last 4 years. If the appropriate discount rate is 16.0 percent per annum, what is the NPV of this investment (to the nearest dollar)? Select one: O a. $316870 O b. $321617 O c. $1834870 O d. $439045
A property worth $16 million can be refinanced with an 85% loan at 9.5% over 20 years. The balance on the current loan is $12,148,566. Loan payments are $113,302 per month. The loan balance in 10 years will be $8,396,769. If the property is expected to be sold in 10 years, what is the incremental cost of refinancing? a)11.18% b)12.42% c) 10.45% d) 10.94%
0. A $45,000 investment in a new conveyor system is projected to improve throughput and increasing revenue by $14,000 per year for five years. The conveyor will have an estimated market value of $4,000 at the end of five years. Using NPV with a MARR of 12%, is this a good investment?
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An investment project is expected to yield $10,000 in annual revenues, will incur $2,000 in fixed costs per year, and requires an initial investment of $5,000. Given a cost of goods sold of 60% of sales and ignoring taxes, what is the payback period in years? * A. 2.50 B. 2.00 C. 5.00 D. 1.25
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19. A business worth $180,000 is expected to grow at 12% per year compounded annually for the next 4 years. (a) Find the expected future value. (b) If funds from the sale of the busi- ness today would be placed in an account yielding 8% compounded semiannually, would be the minimum acceptable price for the business at this time? [10.3] what
Tricorp Company is considering an investment that is expected to return $320,000 after four years. If Tricorp demands a 15% return, what is the most that it will be willing to pay for this investment? 15%, 4 years annually Factor Present value of a $1 0.572 Future value of $11.749 Present value of an annuity 2.855 Future value of an annuity 4.993 a. $320,000 b. $177,696 c. $183,040 d. $45,216 e. $278,272
ROR Using Present Worth, Future Worth or Annual Worth: An investment of $20000 in a certain machine will generate income of $7000 per year for 3 years, at which time the machine can be sold for $8000. If the company's MARR is 15% per year, should it buy the machine?
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6. A construction firm can achieve a $15,000 cost savings in Year-1 and increased by $2,000 each year for the next 5 years by converting their diesel engines for biodiesel fuel. At an interest rate of 15%, what is the equivalent annual worth (A) of the savings? [4]