"A university wants to utilize a solar energy system to reduce its energy bill. The investment cost 500000%$ and the system will have a market value of 10000$ at the end of the estimated lifetime which 25 years. The saving amount in the energy bill will be 105000$ per year. If the university's MARR is 15% per year, what is the Present worth of this investment?" O 179035 267432 249753 232073 214394 196714 161355 143676 None of them

"A university wants to utilize a solar energy system to reduce its energy bill. The investment cost 500000%$ and the system will have a market value of 10000$ at the end of the estimated lifetime which 25 years. The saving amount in the energy bill will be 105000$ per year. If the university's MARR is 15% per year, what is the Present worth of this investment?" O 179035 267432 249753 232073 214394 196714 161355 143676 None of them

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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Pollution Busters Inc. is considering a purchase of 10 additional carbon Pollution Busters Inc. is considering a purchase of 10 additional sequesters for $100,000 apiece. The sequesters last for only 1 year before becoming saturated. Then the carbon is sold to the government.a. Suppose the government guarantees the price of carbon. At this price, the payoff after 1 year is $115,000 for sure. What is the opportunity cost of capital for this investment?a. U.S. Treasuries with 1 year to maturityb. U.S. Treasuries with 2 year to maturityc. U.S. Treasuries with 3 year to maturityb-1. Suppose instead that the sequestered carbon has to be sold on the London Carbon Exchange. Carbon prices have been extremely volatile, but Pollution Busters’ CFO learns that average rates of return from investments on that exchange have been about 20%. She thinks this is a reasonable forecast for the future. What is the opportunity cost of capital in this case ?Opportunity cost of Capital is ___ %b-2. Is the…
(Net present value calculation) Dowling Sportswear is considering building a new factory to produce aluminum baseball bats. This project would require an initial cash outlay of $6,000,000 and would generate annual net cash inflows of $1,100,000 per year for 9 years. Calculate the project's NPV using a discount rate of 5 percent. If the discount rate is 5 percent, then the project's NPV is $___________________(Round to the nearest dollar.)
Street lighting fixtures and their sodium vapor bulbs for a two-block area of a large city need to be installed at a first cost (investment cost) of $100,000. Annual maintenance expenses are expected to be $6,650 for the first 9 years and $9,500 each year thereafter upto 30 years. With an interest rate of 8% per year, what is the present worth cost of this project? Choose the closest answer below OA. The present worth cost of the project is $236,701. OB. The present worth cost of the project is $248,491. OC. The present worth cost of the project is $189,145 OD. The present worth cost of the project is $281,813 27
A Moving to another question will save this response. Question 20 Solar Energy is currently examining a project that will produce cash inflows of $21,405 a year for two years followed by $12.390 in year 3. The cost of the project is $38,716. What is the profitability index of the project if the discount rate is 11 percent? A Moving to another question will save this response. O Type here to search
A proposed project will require an initial investment of $1,000,000 and will generate net operating cash inflows of $250,000 per year for five years. What is the internal rate of return? I already answered this question using PV annuity tables but not sure of my answer. I hope you can help. Thanks!
a. What is the net present value (at the discount rate of 10%) of this project?b. Perot’s engineers have determined that spending $10 million more on development will allow them to add even more advanced features. Having a more advanced chip will allow them to price the chip $50 higher in both years ($870 for year 1 and $700 for year 2). What is the NPV of the project if this option is implemented?c. If sales are only 200,000 the first year and 100,000 the second year, what would the NPV of the project be? Assume the development costs and sales price are as originally estimated. Development cost - $1,250,000Estimated development time - 9 monthsPilot testing - $200,000Ramp-up cost - $400,000Marketing and support cost - $150,000/yrSales & Production volume - $60,000/yrUnit production cost - $100Unit price - $205Interest rate - 8%
1.
Master Lock is evaluating whether to replace an older laser engraving machine to inscribe logos with a new machine. – The initial investment to acquire the machine is $380,000. – The machine has an expected useful life of 5 years. – The new machine would generates annual cost savings of $100,0000 (cash flows) one each of the five years. – The discount rate (or required rate of return) is 8%. • What’s the NPV (assume no taxes or inflation)?
Suppose you plan on spending $100/ac on restoring a forest on bare land you plan to buy. The project is projected to yield a harvest worth $2500/ac in 30 years. After which you sell the land for $400/ac. If you want to earn at least 6% rate of return, what is your willingness to pay for the land? Assume no other costs and revenues and that all values are in real terms. Show your work solving the problems a.) $490.28 b.) $265.63 C.) $636.27 d.) $404.92 e.) none of the above
Assume everything is given in n=0, CONSTANT dollars unless otherwise stated: MTA Textile INC. is considering to invest on a computer-controlled fabric cutting machine. The machine’s purchasing price is $150,000. The part of the initial cost of this investment will be paid using a $50,000 loan. The loan will be repaid in yearly installment for four years at 12%. This project requires a working capital investment of $15,000 at year 0. This investment on working capital will be fully recovered after the project is terminated. The salvage value of this investment at the end of fourth years is expected to be $40,000. This machine will generate annual revenues of $55,000, but have annual operating costs of $3,000. The equipment has a 45% declining balance rate for CCA calculations. The marginal income tax rate for the firm is given as 35%. A general inflation rate is expected to be 5%. However, the firm also expects 8% annual increase in revenue and working capital and a 4% annual increase…
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