PLEASE PROVIDE EXCEL SOLTIONConsider the following EOY cash flows for two mutually exclusive types of microscope for a geoscience lab (one must bechosen, assume that annual benefits of both types are similar). The MARR is 5% per year.Microscope A Microscope BCapital investmentAnnual expensesUseful lifeMarket value at end of useful life$60,000$85,000$1,400$1,50018 years$12,00012 years$0a. Determine which alternative should be selected if the repeatability assumption applies.b. Determine which alternative should be selected if the analysis period is 18 years, the repeatability assumption does notapply, and a microscope can be leased (i.e. borrowed) for $10,000 per year after the useful life of either microscope isover.

Annual worth is calculated over one life cycle of the asset and is usually used to compare the…

Answered: Consider the following EOY cash flows…

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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The following present value factors are provided for use in this problem. Periods 1 2 3 4 Present Value of $1 at 8% 0.9259 0.8573 0.7938 0.7350 Xavier Co. wants to purchase a machine for $37,800 with a four year life and a $1,200 salvage value. Xavier requires an 8% return on investment. The expected year-end net cash flows are $12,800 in each of the four years. What is the machine's net present value? Multiple Choice O O $4,595. $(5,477). $(4,595). Present Value of an Annuity of $1 at 8% 0.9259 1.7833 2.5771 3.3121 $43,277.
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Consider two air-conditioning systems with the cash flow estimates as given below. Use AW analysis to determine the sensitivity of the economic decision to MARR values of 4%, 6%, and 8% per year. Air-Conditioning System 1 System First cost, $ AOC, $ per year Salvage value, $ New compressor and motor cost at midlife, $ Life, years -10,000 -500 -100 -1,850 8 The annual worth of air-conditioning system 1 when the MARR is 4% is $ The annual worth of air-conditioning system 2 when the MARR is 4% is $ The annual worth of air-conditioning system 1 when the MARR is 6% is $ The annual worth of air-conditioning system 2 when the MARR is 6% is $ The annual worth of air-conditioning system 1 when the MARR is 8% is $ The annual worth of air-conditioning system 2 when the MARR is 8% is $ Air-Conditioning System 2 -14,000 -85 -300 -2,540 12
company investment on a machine costing of P40,000 and has a life of 5 years. Yearly cash inflows are as follows: Year 1-P18,000; Year 2-P12,000; Year 3-P10,000; Year 4-P9,000; and Year 5-P6,000. Calculate Net present value at 10% and PI. Will the company accept or reject the project? Complete the table below. 2. A Year Cash flows PV Factor @10% PV 2. 4 Total PV Less-investment Net Present Value PI=
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A company is investigating two production options of the manufactured switches that have the estimated cash flows shown. Which orne should be selected on the basis of a present worth analysis at 10% per year? In-house Contract First cost, P Annual cost, P per year Annual income, P per year 3,000,000 400,000 1,400,000 200,000 0: 200,000 3,100,000 Salvage value, P Life, years 5
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Central Mass Ambulance Service can purchase a new ambulance for $200,000 that will provide an annual net cash flow of $50,000 per year for five years. The salvage value of the ambulance will be $25,000. Assume the ambulance is sold at the end of year 5. Calculate the NPV of the ambulance if the required rate of return is 9%. (Round your answer to the nearest $1.) A) $(10,731) B) $10,731 C) $(5,517) D) $5,517
Consider the following cash flows on two mutually exclusive projects for the Bahama Recreation Corporation (BRC). Both projects require an annual return of 14 percent. Year Deepwater Fishing 0 -$955,000 1 375,000 2 514,000 3 425,000 New Submarine Ride 1,860,000 910,000 805,000 760,000 a-1. Compute the IRR for both projects. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Deepwater Fishing Submarine Ride % %
Harris Corporation has provided the following data concerning an investment project that it is considering: Initial investment Annual cash flow Salvage value at the end of the project Expected life of the project Discount rate $ 160,000 $ 54,000 $ 11,000 O $67,000 O $160,516 O $516 O $(5,776) 4 15 per year years % Use Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the project is closest to:
Consider the six indivisible investment alternatives shown below. The planning horizon is 8 years. The MARR is 15%. $60,000 is available for investment. a. Which investments should be made in order to maximize present worth? b. Solve part a when investments N and P are mutually exclusive and R is contingent on Q.
Q1: For the machines indicated below. Consider i= 10% per year First cost Annual cost Salvage value Life duration Machine A 20,000 $ 5,000 $ 7,500 $ 3 Machine B 25,000 4,000 6,000 4 A- Draw cash flow diagram for each machine for one cycle of each project B- Draw cash flow diagram for each project considering the LCM life cycle (Hint: different project duration, need to have the LCM life cycle) C- Compare the machines to select best alternative one based on Present worth analysis method D- Repeat part B considering Future worth analysis

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