A company has decided to renew the lighting system and it has 4 options. If you know that the project will last for 72 years and MARR is 7%: 1. Systems "A" cost of 35000 € with annual savings of 1200 €, the project life time is 24 years. 2. Systems "B" cost of 40,000 € with annual saving of 2500 €increased by 150 € every year, the project life is 18 years. 3. System "C" cost 50,000 € with annual savings of 2200 € decreased by 50 € every year, the project life is 12 years. 4. System "B" cost 30000 € with annual savings of 30000 € increased by 220 € every year, the project life is 36

A company has decided to renew the lighting system and it has 4 options. If you know that the project will last for 72 years and MARR is 7%: 1. Systems "A" cost of 35000 € with annual savings of 1200 €, the project life time is 24 years. 2. Systems "B" cost of 40,000 € with annual saving of 2500 €increased by 150 € every year, the project life is 18 years. 3. System "C" cost 50,000 € with annual savings of 2200 € decreased by 50 € every year, the project life is 12 years. 4. System "B" cost 30000 € with annual savings of 30000 € increased by 220 € every year, the project life is 36

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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A building is to be paid indefinitely at the rate of 6%. The building's price is P1M if paid in cash. What is the amount of the building today for 12 years at the rate of 4.83% compounded continuosuly? Solve and explain
Coronado, Inc. is considering purchasing equipment costing $39000 with a 7-year useful life. The equipment will provide cost savings of $9000 and will be depreciated straight-line over its useful life with no salvage value. Coronado Inc. requires a 11% rate of return. What is the approximate net present value of this investment? Period 7 O $30000 O $4812 O $3408 O $2076 9% 5.033 Present Value of an Annuity of 1 10% 4.868 11% 4.712 12% 4.564 13% 4.423 16% 4.039
Using the table in Exercise 10, calculate the net present value for each project shown below at the end of six years and determine which would be the better decision for Mike’s Camping Supply. Assume that Project 1 can be sold for $15,000 at the end of the sixth year. Project 1 Project Cost $160,000 Cost $150,000 Minimum desired rate of return 12% Minimum desired rate of return 12% Expected useful life 7 years Expected useful life 6 years Yearly cash flows to be received: Yearly cash flows to be received: Year 1…
A machine estimated to have a life of 20 years is purchased. There is no maintenance required for the first 10 years but will require P 2000 per year for the second 10 years. How much must be invested annually at 3.5% interest during the life of the machine to pay off the maintenance costs? A. P 820 B. P 825 C. P 830 D. P 835
Antique Accents projects that demand for its services will rise for a period of four years before subsiding. It can lease additional communication equipment for $1,300 at the beginning of every quarter year for four years. Alternatively, it can purchase the equipment for $22,500 at 3.50% compounded quarterly. The salvage value of the equipment after four years is expected to be $3,900. a) Which option would you recommend? O Purchase the equipment. O Lease the equipment. b) In current dollars, how much better is that option? For full marks your answer(s) should be rounded to the nearest cent. Current dollars saved = $ 0.00
None
Consider the three small mutually exclusive investment alternatives in the table below. The feasible alternative chosen must provide service for a 10-year period. The MARR is 12% per year, and the market value of each is 0 at the end of useful life. State all assumptions (repeatablity/co-terminated at 5 year study period) you make in your analysis. Which alternative should be chosen? A B Capital Investment PhP 2,000 PhP 8,000 PhP 20,000 Use IRR (FW equation) analysis. Annual revenues less expenses 600 2,200 3,600 Useful life (years) 5 5 10 ANSWER: IRRA = 15.24% ; IRRB = 11.65% ; IRRC = Blank 3% ; Choose alternative Blank 4 %3D %3D Do not use comma and any unit of measure. Use two decimal places in the Final answer.
Project XYZ has a first cost of $75,000, operating and maintenance costs of $10,000 during each year of its 10 years life, and a $15,000 salvage value. What is its equivalent uniform annual cost (EUAC) if the interest rate is 10%/year? Most nearly number for answer. O No correct answer 21546 O 21262 21622 26223 22126
1. CB Electronix needs to expand its plant. It is considering an alternative plan that will last indefinitely. The MARR is 15%. Please determine the capitalized cost of the alternative. Alternative: Expand by 20 000 square feet First cost = $2 000 000 Annual Maintenance costs = $10 000 per year starting in year 3 Periodic maintenance costs = $15 000 every 15 years, starting in 20 years
a Moving to another question will save this response. Question 1 of Question 1 Save Awe A company purchased a AC system for $49,855 which requires $8,755 per year maintenance fees for the first 5 years, after which the maintenance fees will increase by 12% per year for the upcoming 7 years. Determine the equivalent total present worth value of purchased system during the 12 years operation ati = 15% per year.
( 1 contractor want to invest his money in on of project A or B if you know that the interest rate is 10%, choose the best alternative A or B using net present worth method? A 120 000 CU 15 000 CU/YEAR 10 000 CU/YEAR 12 000 CU 12 YEARS 3000 CU Initial investment Annual revenue Annual expense Salvage value Project life Cost of machines replaced every 3 حلقه میشو الباب diq Naama years B 135 000 CU 17 000 CU/YEAR 11 000 CU/YEAR 20 000 CU/YEAR 6 YEARS 3500 CU

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