(a) Ford Motor Co. and Volvo launched a program to develop technologies to prevent accidents by sleepy drivers. The device cost RM 260 which tracks lane markings and sounds an alert during lane changes. These devices will be included in 100,000 new cars per year for 10 years beginning at year 3 from now. i) Sketch the cash flow diagram of the program ii) Calculate the present worth of the program at an interest rate of 10% per year

(a) Ford Motor Co. and Volvo launched a program to develop technologies to prevent accidents by sleepy drivers. The device cost RM 260 which tracks lane markings and sounds an alert during lane changes. These devices will be included in 100,000 new cars per year for 10 years beginning at year 3 from now. i) Sketch the cash flow diagram of the program ii) Calculate the present worth of the program at an interest rate of 10% per year

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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2. (a) You want to set-up a scholarship fund that will support $20000/year for an infinite period. The fund is expected to earn 8% return per year forever. What initial investment is needed to set-up the scholarship fund? Find the value of (P/A,1/2%, ∞). (b) Estimate the depreciation schedule of a machine with an initial cost of $100,000, useful life of 8 years and a salvage value of $30,000. Use the double declining balance method to develop the depreciation schedule.
The cash flow after taxes for two machineries A and B are given in the table below.Year wise Cash flow A B1 22000 70002 25000 50003 28000 45004 5000 280005 4500 250006 7000 22000The estimated useful life of the machines is 6 years and the discount rate is 11%. The cost of each machine is Rs60000 1. Discuss the steps of application of the concept of NPV to the given situation. Determine the NPV of Machine A . 2. Determine the NPV of the Machine B. Discuss, which machinery should be acquired and why?
Royal Arts Company has invested 18000 as the initial investment into a new project. the following are the expected cash flows from the project. the appropriate discount rate is 5% what is the NPV of the project?Year 1 11000Year 2 8000Year 3 2000
Maud'Dib Intergalactic has a new project available on Arrakis. The cost of the project is $36,000 and it will provide cash flows of $19,800, $25, 300, and $24, 200 over each of the next three years, respectively. Any cash earned in Arrakis is "blocked" and must be reinvested in the country for one year at an interest of 3.5 percent. The project has a required return of 8.5 percent. What is the project's NPV? Multiple Choice $19, 982.00 $22, 686.44 $31, 694.85 $28,575.27 $34, 576.20
5. Southwestern Moving and Storage wants to have enough money to purchase a new tractor-trailer in 3 years. If the unit will costs approximately $450,000 three years from now, how much should the company set aside each year if the account earns 4% per year? Show your cash flow diagram.
A neighborhood shopping center is expected to generate after-tax cash flow of $750,000 per year (at end of year) indefinitely. If an interested buyer has a cost of money of 13 %, how much will he be willing to pay for this shopping center? A $6.64 million B) $7.50 million $5.77 million D $2.21 million
7. The Snoopy Company produces steak knives for the finest dining parlors in the world. They plan to spend $11,000 to redesign the logo on the knife which will, they believe, generate incremental free cash flows as follows; FCF Year One $4,000: FCF Year Two $4,000: and FCF Year Three of $6,000. What is the Internal Rate of Return for this project? a) 10.50% b) 12.15% c) 14.15% d) 16.50%
. A is considering the purchase of two alternative machinery. Machine 1 has an expected life of 5 years, will cost Rs. 100 lacs, and will produce net cash flows of Rs.30 lacs per year. Machine 2 has a life of 10 years, will cost Rs.140 million, and will produce net cash flows of Rs.25 million per year. It plans to use the chosen machine for only 10 years. Inflation in operating costs, machinery costs, is expected to be zero, and the company’s cost of capital is 12%. Which machine is acceptable as the better project? What is the equivalent annual annuity cost for each machine and by this criterion, which machine is acceptable?
Please
1. A mechanical device will cost $30,000 when purchased. Maintenance will cost $2,000 each year. The device will generate revenues of $5,000 each year for five years. At the end of the fifth year, the salvage value of the device is $6,500. Draw and simplify the cash flow diagram. Calculate: (a) the present value and (b) the equivalent annual cost of the cash flows using a discount rate of 12%.
Hello and good evening, I hope someone can help me answer this question. Thank you in advance.
NEED HELP ASAP! Imagine you are going to have a project to sell a Massive Machinary you owned. You have invested THB 15,500,000 for the Machine. This machine is expected ot have a life of 7 years. The expected cash flow for the next seven years are as follow; Year 1 - THB 900,000 Year 2 - THB 950,000 Year 3 - THB 1,200,000 Year 4 - THB 2,500,000 Year 5 - THB 2,500,000 Year 6 - THB 3,640,000 Year 7 - THB 5,560,000 Discount Rate is at 7% per year. Please find the Present Value for each year and also the Net Present Value. Then, see if you should accept this project or not? Give me a solid support for your answer

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