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Calculate the PW and IRR of this transaction. At the given MARR is this a good purchase? Please workout in excel spreadsheet.

Calculate the PW and IRR of this transaction. At the given MARR is this a good purchase? Please workout in excel spreadsheet.

Essentials Of Investments
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
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Problem 3. Calculate the PW and IRR of this transaction. At the given MARR is this a good purchase? Please workout in excel spreadsheet.
Annual Recurring benefits Annual Recurring costs Salvage value Project life = 40 years 20 25 55 8 18 25 10 8 22 Select Project = Int rate = 5% Reason: Prob. 3 A company is buying a machine that will save them in labor cost. It also has some yearly maintenance costs. See the details below. Calculate the PW and IRR of this transaction. At the given MARR, is this a good purchase? Initial Investment 15000 Annual Labor savings Annual maintenance costs 8000 2500 Salvage value N= 6 yrs 2000 PW = MARR = 15% IRR = Good/Bad Prob. 4 Consider the following two projects. Which project would you select on the basis of rate of return, assuming MARR = 15% A1 A2 0006- 900 -12000 1 6000 3500 3400 3 5500 2300 4. 3200 2800 1200 1600 Select Project = Reason: tv W 20
Transcribed Image Text:Annual Recurring benefits Annual Recurring costs Salvage value Project life = 40 years 20 25 55 8 18 25 10 8 22 Select Project = Int rate = 5% Reason: Prob. 3 A company is buying a machine that will save them in labor cost. It also has some yearly maintenance costs. See the details below. Calculate the PW and IRR of this transaction. At the given MARR, is this a good purchase? Initial Investment 15000 Annual Labor savings Annual maintenance costs 8000 2500 Salvage value N= 6 yrs 2000 PW = MARR = 15% IRR = Good/Bad Prob. 4 Consider the following two projects. Which project would you select on the basis of rate of return, assuming MARR = 15% A1 A2 0006- 900 -12000 1 6000 3500 3400 3 5500 2300 4. 3200 2800 1200 1600 Select Project = Reason: tv W 20
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