6. Since the minimum return rate is 6%, which of the following options is more appropriate?option Aoption B100option C200option D500Investment cost, ECUAnnual profit, ECU/yıl400100.927.746.2125.2For all options, the service life is 5 years and the scrap value is zero.

Rate = 6% Time Period = 5 years Value at end = 0 Option A Investment = 400 Annual Profit = 100.9…

6. Since the minimum return rate is 6%, which of the following options is more appropriate? option A option B option C option D 500 Investment cost, ECU 400 100 200 Annual profit, ECU/yıl 100.9 27.7 46.2 125.2 For all options, the service life is 5 years and the scrap value is zero.

6. Since the minimum return rate is 6%, which of the following options is more appropriate? option A option B option C option D 500 Investment cost, ECU 400 100 200 Annual profit, ECU/yıl 100.9 27.7 46.2 125.2 For all options, the service life is 5 years and the scrap value is zero.

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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Similar questions

Alternative A B C which to choose.
Consider two mutually exclusive alternative. Construction a choice table using PW for interest rate from 0% to 20%. If the minimum attractive rate of return is 8%, which alternative should be selected? Alternative A B Fist cost $2,000 $3,000 Uniform annual benefit $450 $600 Salvage Value $200 700 Useful life 6 years 6 years Hint: Equation: PW_A = 450(P/A, i, 6) + 200(P/F, i, 6) – 2000 PW_B = 600(P/A, i, 6) + 700(P/F, i, 6) – 3000 or Spreadsheet: PW_A = -PV(i, nper, pmt, fv) – 2000 = -PV(i, 6, 450, 200) - 2000 PW_B = -PV(i, nper, pmt, fv) – 3000 = -PV(i, 6, 600, 700) - 3000
Using Net Present Worth Analysis which alternative is best? Use an interest rate of 8%. Alternative Initial Cost Annual Benefit $2,100 $3,200 $1,550 $ 1,250 405 $ 1,290 Salvage Value %24 Useful Life (years) 2 4 OA is the best alternative B is the best alternative Choose either alternative O Choose neither alternative
Consider alternatives A and B as shown below. The interest rate is 9%. For parts a) and b), let X = $250. For parts a) and b), which alternative is preferred: a) by equivalent annual worth analysis? b) by payback period? c) Compute the value of X that makes the two alternatives equally desirable. Initial cost Uniform annual benefit Salvage value Useful life, in years A $500 200 100 5 B $900 X 120 5
Data for 2 alternatives are given below, determine the cost of alternative B so that the two alternatives will be equally desirable. Assume an interest rate of 15%. Use benefit cost ratio analysis Alternatives A Cost Salvage Value Annual Benefit Life (years) B P100k X 10k 16k 28k 30k 10 12
Option 01 has 12 years and option O2 has 8 years of life, and the MARR is 9 percent. Option O2, is not going to be replaced at the end of its useful life and those two options are the only available options to us at the moment (They are unique). Compare 12 years of 01 with 8 years of O2 and find the best option. Option: First Cost ($) Uniform Annual Benefit ($ Salvage Value ($) 01 1,400 245 190 02 900 265.99 0
1. A firm is considering two alternatives that have no salvage value. A Initial Cost $10,700 $5,500 Uniform Annual 2,100 1,800 Benefits Useful Life, in 8 4 years At the end of 4 years, another B may be purchased with the same cost, benefit and so forth. 1. Graph the EUAC or EUAW for the alternatives. Construct a choice table for interest rates from 0% to 100%. 2. If the MARR is 10%, which alternative should be selected?
1
Two alternatives are being considered: B First cost Uniform annual benefit Useful life, in 5000 9600 1750 1850 4 8 years If the minimum attractive rate of return is 7%, which alternative should be selected? Solution: 1. Use the increment analysis, we should use 2. Terms n= 3. The Increment CFD has 3 basic patterns: O AP= O AA= O AF= occurred at end of year 4. AROR= % 5. Choose Please answer all parts of the question.
A firm is considering two alternatives that have no salvage value. At the end of 4 years, another B may be purchased with the same cost, benefits and so forth. a. Construct a choice table for interest rates from 0% to 100%. b. If the MARR is 10%, which alternative should be selected? Item Initial Cost Uniform Annual Benefits Useful Life, in years A -$10,700 2,100 8 B -$5,500 1,800 4
9. Compare two alternatives using i = 10% Alternative X Alternative Y First cost, $ M&O costs, $/year 45,000 Benefits, $/year Disbenefits, $/year 20,000 Life, years 320,000 540,000 35,000 110,000 150,000 45,000 10 20 a) Which alternative should be selected? b) Calculate the option based on incremental value and justify?
The sales and profit for two years are as below: Sales Profit 2019 250000 40000 2020 100000 10000 What will be the correct option for Variable cost of year 2019? Select one: O a. OMR 80000 O b. OMR 70000 O c. None of the options O d. OMR 90000

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