6. In a company's renovation of a small office building, two feasible alternatives forupgrading the heating, ventilation, and air conditioning (HVAC) system have beenidentified. Either Alternative A or Alternative Bmust be implemented. The costs are asfollows:Alternative A: Rebuild Coverhaul) the existing HVAC systemv Equipment, labor, and materials to rebuild . ETB 18,000v Annual cost of electricity . ETB 32,000v Annual maintenance expenses. ETB 2,400Alternative B: Install a new HVAC system that utilizes existing ductworkV Equipment, labor, and materials to install . ETB 60,00o* Annual cost of electricityv Annual maintenance expensesv Replacement of a major component four years hence... ETB 9,400. ETB 9,000ETB 16,000At the end of eight years, the estimated market value for Alternative A is ETB 2,000and for Altemative B it is ETB 8,000. Assume that both alternatives will providecomparable service (comfort) over an eight-year period, by using 8% discount rateSelect the feasible alternative by using present value method and Equivalent annual costmethod.

6. In a company's renovation of a small office building, two feasible alternative upgrading the heating, ventilation, and air conditioning (HVAC) system have identified. Either Alternative A or Altermative Bmust be implemented. The costs : follows: Alternative A: Rebuild Coverhaul) the existing HVAC system v Equipment, labor, and materials to rebuild . ETB 18,000 * Annual cost of electricity v Annual maintenance expenses Alternative B: Install a new HVAC system that utilizes existing ductwork ... ETB 32,000 . ETB 2,400 Equipment, labor, and materials to install . ETB 60,000

6. In a company's renovation of a small office building, two feasible alternative upgrading the heating, ventilation, and air conditioning (HVAC) system have identified. Either Alternative A or Altermative Bmust be implemented. The costs : follows: Alternative A: Rebuild Coverhaul) the existing HVAC system v Equipment, labor, and materials to rebuild . ETB 18,000 * Annual cost of electricity v Annual maintenance expenses Alternative B: Install a new HVAC system that utilizes existing ductwork ... ETB 32,000 . ETB 2,400 Equipment, labor, and materials to install . ETB 60,000

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

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The Mowbot plant must replace an existing HVAC unit (doing nothing is not an option). You are evaluating two pieces of equipment. Each unit offers a saving in annual energy cost over the existing equipment. Alternative Unit A Unit B Unit C Up front cost $44,000 $65,000 $84,000 Operating cost/year $1.900 $1.400 $900 Energy savings / year $14,000 $16,500 $17,500 Salvage Value $2,000 $4,000 $5,000 Economic life, years 7. 7. Mowbot's MARR is 12%. Based on annual worth analysis (not incremental), which unit should you recommend? HTML Editora BI 工E三 E三xi x ミ = ECE 12pt Paragraph
The following costs were incurred by Barak Klever Ltd in 2020 in the design andconstruction of a new office building over a nine-month period during 2020:GH¢000Feasibility study 8Architects' fees 100 Site clearance (by external demolition professionals) 80Construction materials 600Cost of own inventories used in the construction(net realisable value if sold outside the company GH¢24,000) 30Internal construction staff salaries during period of construction 360External contractor costs 2,400Income from renting out part of site as storage depotduring early phase of construction (12)3,566Required:In accordance with IAS 16 Property, plant and equipment, calculate the amount that Barak KleverLtd should capitalise as property in the financial statements for the year ending 31 December 2020 b. Courage Hodey Inc. owns the following properties as at 31 December 2019:Property: Fair value (GH¢million)Land with future use undetermined 3.2Factory rented to Courage Hodey's subsidiary under an…
1
MAIN PROJECT lums University is considering investing in an online book ordering and information service, which will be managed by 2 employees. The following estimates relate to the costs of starting the service and the subsequent revenues from it. The initial investment needed to start the service, including the installation of additional phone lines and computer equipment, will be $1,000,000. These investments are expected to have a life of 4 years with 0 salvage value.The investments will be depreciated straight line over the four-year life.The revenues in the first year are expected to be $1500,000, growing 20% in year 2, and 10% in the two years following.The salaries and other benefits for the employees are estimated to be $150,000 in year 1, and grow 10% a year for the following three years.The cost of the books is assumed to be “0.60” of the revenues in each of the four years.The non-cash working capital, which includes the inventory of books needed for the service and the…
6. In a company's renovation of a small office building, two feasible alternatives for upgrading the heating, ventilation, and air conditioning (HVAC) system have been identified. Either Alternative A or Alternative Bmust be implemented. The costs are as follows: Alternative A: Rebuild (overhaul) the existing HVAC system V Equipment, labor, and materials to rebuild. v Annual cost of electricity v Annual maintenance expenses . ETB 18,000 ETB 32,000 ЕТВ 2,400 Alternative B: Install a new HVAC system that utilizes existing ductwork V Equipment, labor, and materials to install. v Annual cost of electricity. . ETB 60,000 .ЕТВ 9,000 V Annual maintenance expenses ETB 16,000 v Replacement of a major component four years hence.. ETB 9,400 At the end of eight years, the estimated market value for Alternative A is ETB 2,000 and for Alternative B it is ETB 8,000. Assume that both alternatives will provide comparable service (comfort) over an eight-year period, by using 8% discount rate Select the…
6) Suppose that you have to decide between three mutually exclusive alternatives regarding the manufacturing techniques of the plant you are working in as an engineer. Following list is given: Technique A (S) | Technique B ($) | Technique C ($) 20,000 7,000 4 First investment (initial cost) Salvage value Operating cost per hour Useful life (year) Here, system A, B, and operates 6, 12, and 20 hours a day, respectively. Assume that each are working 310 days per year. Assuming MARR is 12%, find the followings for each of these alternatives: a) Assuming a very long life for each, capitalized cost (CC)? b) Capital recovery (CR) c) Now suppose that revenue values for all are the same and given by $70,000. Which one would you prefer by using the AW analyses? 40,000 20,000 2 20 30,000 5,000 6 5 4.
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An engineer has received two bids for an elevator to be installed in a new building. Given a 10% interest rate, which bid should be accepted? Alternatives Installed cost Annual cost Salvage value Life, in years Westinghome $45,000 2700 3000 10 Itis $54,000 2850 4500 15
Down East Chemicals is considering replacing its existing computer system with a new computer system. The new system can offer considerable savings in computer processing and inventory management costs. Information about the existing system and the new system follow: Original cost Annual operating cost Accumulated depreciation Current salvage value of the existing system Remaining life in 5 years Salvage value in 5 years Annual depreciation Sunk costs include: Existing Computer New Computer $10,000 $ 3,500 $ 6,000 $ 4,000 5 years $0 $ 2,000 $15,000 $ 2.000 $ 3,000
Baguio Rabbitry must replace the piping system in its barn. Based on cost of capital of 12%which of the two following alternatives should be chosen using the following methods?a) RORAI b) AW c) PW

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