A new flood control project is expected to involve expenditures for periodic heavy mainte-nance as tabulated below. Note that the first expenditure occurs at EOY 2, with subsequentexpenditures at four-year intervals, increasing by 20 percent for each expenditure. Find theequivalent annual cost with i=15 percent per year and n 0o.EOYExpenditure$250,000300,000360,000etc.etc.2608

Equivalent annual cost is the estimated cost incurred per year of a machine. It is calculated by…

A new flood control project is expected to involve expenditures for periodic heavy maint mance as tabulated below. Note that the first expenditure occurs at EOY 2, with subseque expenditures at four-year intervals, increasing by 20 percent for each expenditure. Find th equivalent annual cost with i 15 percent per year and noo. EOY Expenditure $250,000 300,000 360,000 etc. etc. 2608

A new flood control project is expected to involve expenditures for periodic heavy maint mance as tabulated below. Note that the first expenditure occurs at EOY 2, with subseque expenditures at four-year intervals, increasing by 20 percent for each expenditure. Find th equivalent annual cost with i 15 percent per year and noo. EOY Expenditure $250,000 300,000 360,000 etc. etc. 2608

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

A project has the following cash inflows $34,444; $39,877; $25,000; and $52,800 for years 1 through 4, respectively. The initial cash outflow is $104,000. Which of the following four statements is correct concerning the project internal rate of return (IRR)? The IRR is greater than or equal to 10%, but less than 14%. The IRR is greater than or equal to 14%, but less than 18%. The IRR is greater than or equal to 18% The IRR is less than 10%.
It is known that a project for the construction of public facilities with estimated costs and benefits of the project is as follows: • 6 year project life. • The applicable discount rate is 10% in the first year and the discount for the first year the second is an increase of 5%. • Expenses incurred only in year 1 and 2, with each Rp. 515,000,000 and Rp. 415 000 000. • Benefits received from year 3 to year 6 respectively Rp. 205,000,000, Rp. 305 000 000, Rp. 405 000 000 and IDR 505,000,000 Please count and explain the Project investment criteria a. Payback Period of Investment criteria b. NPV (net present value) criteria c. IRR (Internal Rate of Return) criteria
Solve all the questions in the image below
An investment made with an expenditure of $160,000 at the start of the project. The income from the project at the end of each year for 5 years is $80000, $90000, $85,000, $75,000 and $70,000. He made an investment of $20000 again at the end of 2nd year. The maintenance will cost 1500$ for the first year and it increments by 500$ for the second year and third year onwards it increments by 1000$. The salvage value is 70,000$. Draw a CFD for the project and give the analysis of the project based on the CFD.
Cost estimates for a porposed public facility are being evaluated. Initial construction cost is anticipated to be $120,000 and annual maintenance expenses are expected to be $6500 for the first 20 years and $2000 for every year thereafter. The facility is to be used and maintained for an indefinite period of time. Using an interest rate of 10% per year, the capitalized cost of this facility is most nearly? a. $180,000 b. $190,000 c. $200,000 d. $270,000
Pharoah Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $901,000, and project B's cost is $1,268,100. Cash flows from both projects are given in the following table. Year Project A $86,212 1 2 3 4 313,562 427,594 285,552 Project B $586,212 413,277 231,199 What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.) Discounted payback period of project A Pharoah should choose Discounted payback period of project B Which will be accepted with a discount rate of 8 percent?
Funds committed to a project of Triumph Ltd. are Rs.25 lakh. The inflows relating to the project for the six years areRs.7,50,000; Rs.8,00,000; Rs.6,50,000; Rs.6,00,000; Rs.5,50,000 and Rs.4,50,000 respectively; compute the IRR of theproject and unrecovered investment balance at the end of year 4.
Information on four investment proposals is given below: 6 years A B Investment required Present value of cash inflows Net present value $ (300,000) 424,800 $ 124,800 $ (140,000) 191,700 $ 51,700 Investment Proposal C $ (100,000) 151,100 $ 51,100 Life of the project 5 years 7 years Required: 1. Compute the profitability index for each investment proposal. Note: Round your answers to 2 decimal places. 2. Rank the proposals in terms of preference. Investment Profitability Proposal Index Rank Preference ABCD D $ (1,500,000) 2,001,700 $ 501,700 6 years
The Dry Dock is considering a project with an initial cost of $105,271 and cash inflows for Years 1 to 3 of $37,200, $54,600, and $46,900, respectively. What is the IRR?
G.3. A proposed geothermal energy project has an initial cost of $1,000K. In addition it will re- quire an infinite series of periodic maintenance expenditures at five-year intervals following the first maintenance expenditure at EOY 2. Find the equivalent annual cost with n oo and i = 88 percent per year. EOY Expenditure Initial cost $1,000K Periodic maintenance 140K Same 200K Same 260K 17 Same 320K etc. to oo etc, to oo (Ans. NAW = $137,510K/yr) %3D O2725

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