A project with the following costs are under consideration to determine its profitability. Using the IRR comparison, and an annual MARR of 10% compounded semiannually, determine if the project should beexecuted.First costSemiannual operating costSemiannual incomeSalvage valueLife in yearsa. IRR = 18.7% semiannualO b. IRR = 15.3% semiannualOc. IRR = 16.9% semiannualOd. IRR = 17% semiannual: $45,000: $10,000: $20,000: $20,,000: 4 years

Project Cash Flows:Year 0: Initial Cost = -$45,000Year 0.5 to Year 7.5 (8 semiannual…

Answered: A project with the following costs are…

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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1. Data for two alternatives are given in the table below. Determine the X cost of alternative B so that the two alternatives will be equally desirable. Assume an interest of 11%. Use BCR analysis. ALTERNATIVE A Cost 9500 Salvage value 1000 1600 Annual benefit 2800 3700 Life (years) 12
determine the most economic alternative using AW analysis at 12% per year. Give an explanation and draw the results.
ZLX is evaluating an investment and has generated the following: Initial investment at time t=0 is $2,000,000 Life of project is 8 years Initial investment depreciated to $0 via straight-line over entire life NWC investment required = $0.00 Expected market salvage value of investment assets = $0.00 Starting 1-year from today, and remaining constant over project life: Incremental sales as a result of investment = $1,600,000 / year Incremental expenses as a result of investment = $1,100,000 / year firm' tax rate = 28% What is the IRR of this investment? Enter rate in decimal form, rounded to fourth digit, as in "0.1234"
Using (incremental) benefit-cost ratio analysis OR (incremental) internal rate of return, determine which of the following three mutually exclusive alternatives should be selected. Each alternative has a 6-year useful life. Assume the MARR is 6%. First Cost Uniform Annual Benefit Salvage Value $560 $140 $40 A $340 $100 0 B $125 $40 0 C
Two machines with the following cost estimates are under consideration for a dishwasher assembly process. Using an interest rate of 10% per year, determine which alternative should be selected on the basis of an annual worth analysis.
Bipin
Required information A company that manufactures magnetic flow meters expects to undertake a project that will have the cash flows estimated. First cost, $. Equipment replacement cost in year 2, $ Annual operating cost, $/year Salvage value, $ Life, years -870,000 -300,000 -920,000 250,000 4 At an interest rate of 10% per year, what is the equivalent annual cost of the project? Find the AW value using tabulated factors. The equivalent annual cost of the project is $-1
From the following information calculate the netpresent value of the two projects and suggestwhich of the two projects should be acceptedassuming a discount rate of 10% Project A Project BInitial investment Rs. 20,000 Rs. 30,000Estimated life 5 years 5 yearsScrap value Rs. 1,000 Rs. 2,000 The profit before depreciation and after taxes areas follows:Year Project ARs.Project BRs.1 5,000 20,0002 10,000 10,0003 10,000 5,0004 3,000 3,0005 2,000 3,000
The following data pertain to an investment proposal (Ignore income taxes.): Cost of the investment $ 36,000 Annual cost savings $ 11,000 Estimated salvage value $ 4,000 Life of the project 5 years Discount rate 13% Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the proposed investment is closest to: (Round your intermediate calculations and final answer to the nearest whole dollar amount.)
Two mutually exclusive alternatives have the estimates shown below. Use annual worth analysis to determine which should be selected at an interest rate of 10% per year. Q $-44,000 R $-84,000 First Cost AOC per Year Salvage Value $-10,000 $-5,000 in year 1, increasing by $1,000 per year thereafter $4,000 $5,000 Life 2 years 4 years Alternative (Click to select) should be selected.
Required information. [The following information applies to the questions displayed below.] Project Y requires a $331,500 investment for new machinery with a five-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. (PV of $1. FV of $1. PVA of $1. and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation). Depreciation Machinery Selling, general, and administrative expenses Income Years 1-5 4. Determine Project Y's net present value using 9% as the discount rate. Note: Do not round intermediate calculations. Round your present value factor to 4 decimals and final answers to the nearest whole dollar. Net present value Not Cash Flows Project Y $ 400,000 Present Value of Annuity at 9% 179,200 66,300 29,000 $ 125,500 Present Value of Net Cash Flows
Required Information [The following information applies to the questions displayed below.] Project Y requires a $327,000 investment for new machinery with a four-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. (PV of $1, FV of $1, PVA of $1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Project Y $ 360,000 161,280 81,750 26,000 $ 90,970 2. Determine Project Y's payback period. Project Y Payback Period Numerator: 1 Denominator: 1 Payback Period = 0

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