All of the proposals have a project life of 10 years. D and E are mutually exclusive. It is also known that B is contingent on D, while A and C are contingent on E. The maximum amount available for investment is P 4.5 M. a. Develop the matrix of investment alternatives. Indicate which alternatives are feasible. (Follow the format of the table given below).
All of the proposals have a project life of 10 years. D and E are mutually exclusive. It is also known that B is contingent on D, while A and C are contingent on E. The maximum amount available for investment is P 4.5 M. a. Develop the matrix of investment alternatives. Indicate which alternatives are feasible. (Follow the format of the table given below).
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 10E
Related questions
Question
![A
P 3.3 M
1,000,000
320,000
330,000
B
P 3.4 M
1,120,000
420,000
340,000
C
D
P 4.4 M
P 2.8 M
750,000
1,400,000
180,000
500,000
280,000 440,000
Investment
Annual revenue
Annual cost
Salvage value
All of the proposals have a project life of 10 years.
D and E are mutually exclusive. It is also known that B is contingent on D, while A
and C are contingent on E. The maximum amount available for investment is P 4.5
M.
Matrix of Investment Alternatives (Format)
Alternative A
B
C
E
P 5.2 M
1,600,000
550,000
520,000
a. Develop the matrix of investment alternatives. Indicate which alternatives are
feasible. (Follow the format of the table given below).
D
E Feasible?
b. Use the Future Worth method to find the best alternative. Assume that MARR is 14% per year.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fef74f9f9-20a6-4755-be9d-3ef9b312f7ea%2F318c9cc1-750b-4148-9e4a-6ead13678c7f%2Fspcr7wm_processed.png&w=3840&q=75)
Transcribed Image Text:A
P 3.3 M
1,000,000
320,000
330,000
B
P 3.4 M
1,120,000
420,000
340,000
C
D
P 4.4 M
P 2.8 M
750,000
1,400,000
180,000
500,000
280,000 440,000
Investment
Annual revenue
Annual cost
Salvage value
All of the proposals have a project life of 10 years.
D and E are mutually exclusive. It is also known that B is contingent on D, while A
and C are contingent on E. The maximum amount available for investment is P 4.5
M.
Matrix of Investment Alternatives (Format)
Alternative A
B
C
E
P 5.2 M
1,600,000
550,000
520,000
a. Develop the matrix of investment alternatives. Indicate which alternatives are
feasible. (Follow the format of the table given below).
D
E Feasible?
b. Use the Future Worth method to find the best alternative. Assume that MARR is 14% per year.
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