A project requires you to invest $10,000 now, will generate annual revenues of $1500 for 10 years and will have a salvage value of $800 at the end of year 10. If your MARR is %10 per year, is this project acceptable? Select one: a. Yes, and its PW=$525.3 X b. No, and its PW =-$1474.7. c. Yes, and its PW=$1525.3 d. No, and its PW =-$474.7

A project requires you to invest $10,000 now, will generate annual revenues of $1500 for 10 years and will have a salvage value of $800 at the end of year 10. If your MARR is %10 per year, is this project acceptable? Select one: a. Yes, and its PW=$525.3 X b. No, and its PW =-$1474.7. c. Yes, and its PW=$1525.3 d. No, and its PW =-$474.7

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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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

A project requires you to invest $10,000 now, will
generate annual revenues of $1500 for 10 years
and will have a salvage value of $800 at the end of
year 10. If your MARR is %10 per year, is this
project acceptable?
Select one:
a. Yes, and its PW=$525.3 X
b. No, and its PW =-$1474.7.
c. Yes, and its PW=$1525.3
d. No, and its PW =-$474.7

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te.7
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The cash flow of an energy management opportunity is estimated as follows: Initial cost:$12,000 Energy saving:$2,700/year for 12 years Maintenance cost:$1,200/year for 12 years Salvage value:$2,500@the end of 12 years If the interest rate is 10%, 1) What is the simple payback period (SPP) (in years)? (a)5.2 (b)4.2 (c)4.6 (d)8.02) With an annual discount rate is 10%, what is the discounted payback period (in years)? (a)9.5 b) 15.1 (c)8.1 (d) 16.9 (e) 6.53)With an annual discount rate is 10%, what is the benefit-cost ratio (BCR)? (Hint: Benefit = Annual saving-Maintenance; Cost= Initial investment - Salvage)(a) 1.04(b) 0.80(c) 1.25(d) 1.12(e) 1.43
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