Data for two alternatives are as follows: Alternatives A B Investment P35, 000 P50, 000 Annual benefits P20, 000 P25, 000 Annual O and M P6, 450 P13, 830 Estimated life, years Net salvage value Р3, 500 Using an interest rate of 20%, which alternative should be chosen? Ans: Alternative A is referred over Alternative B

Q: irst Cost alvage Value Annual Operating Cost Annual Maintenance Cost Estimated Life nterest rate…

A: Equivalent annual cost is which is equivalent to all cost that are going to have impact on equipment…

Q: Question Five: for an investment project which is shown its payment details in Figure (2), it is…

A: i 20%   Year Cash Flow Out Flow Cash Flow in Flow 0  $20,000.00   1  $  5,000.00  $  8,000.00…

Q: Q9. Find the NPV, payback period and profit index for both projects, if the discountrate is 11%:…

A: Capital budgeting indicates the evaluation of the profitability of possible investments and projects…

Q: VMC Inc is considering 2 projects SunA and MoonB which are independent, what would be the correct…

A: Payback period is one of the technique used for capital budgeting. Payback period is time period in…

Q: Future cash flows ex Project A $ 850,000 440,000 $ 410,000 1.93 Project B $830,000 420,000 $ 410,000…

A: Projects should be prioritized according to their Profitability index , in case of independent…

Q: The following data have been estimated for two feasible investments, A and B, for which revenues as…

A:

Q: Salalah company management is considering two competing investment Projects A and B.

A: Since, NPV of Alternative 2 is higher therefore, it should be selected.

Q: Using Net Present Worth Analysis which alternative is best? Use an interest rate ot 8%. Alternative…

A: Interest rate = 8%

Q: If the alternatives are mutually exclusive and the MARR is 15% per year, the alternative to select…

A: The minimum possible required return at which a company is willing to invest its funds is term as…

Q: Consider the following two exclusive projects, A and B: Project A B B A None of the above Project A…

A: Net present value is capital budgeting technique used for making investment decisions.  It is…

Q: You have been given the expected return data shown in the first table on three assets—F, G, and…

A: Expected returns of any security or portfolio are the returns that are most probable in future…

Q: The Rate of Return (ROR) for five different Mutually Exclusive project alternatives are provided in…

A: Rate of Return(ROR) shows percentage of return or profit generated on an investment made in any…

Q: OIf the MARR is 12%, which alternative should be selected?

A: Since you have posted a question with multiple sub-parts and the first part is very complex to…

Q: Year Initial Investment 1 2 3 4 5 Project A 8000 2750 2750 2750 2750 2750 Project B 8000 3000…

A: The payback period is the time period require to cover the investment Payback Period = Investment/…

Q: Consider alternatives A and B as shown below. The interest rate is 9%. For parts a) and b), let X =…

A: concept. payback period is the time required to recover initial investment. In case of uniform…

Q: The five alternatives shown here are being evaluated by the rate of return method: If the…

A: Companies have different alternatives to invest their money in, but they should always compare the…

Q: Consider two mutually exclusive alternative. Construction a choice table using PW for interest rate…

A: PW means PV of net benefit arises in the future from the project. It can be simply computed by…

Q: Evaluate the following investment project according to the Discounted Payback, Internal Rate of…

A: There are various techniques that are used by the management in order to determine whether to accept…

Q: Find the modified BI C gatio for the following project. Use PW formulation- Also test the…

A: Modified B/C ratio stands for modified benefit cost ratio. It is calculated by subtracting the…

Q: Options are: Accept or Reject

A: a) Which project should be selected if there is no capital restraints:Project H,F,A,C,E should be…

Q: The estimated negative cash flows for three design alternatives are shown below. The MARR is 13% per…

A: The Incremental Internal Rate of Return (IRR), also known as the Incremental IRR, is a financial…

Q: Consider three mutually exclusive alternatives: Year Investment X Investment Y Do Nothing -$200…

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Q: 170

A: the decision must be taken to pick which project must be picked,  Look alternate A, Initial cost…

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Q: Evaluate the two alternatives A and B and decide the economic justified alternative using: Present…

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Q: For the options shown below, the values of n that you should use to make a correct comparison by the…

A: Interest Rate = 10%   Option A: Capital Cost = -65,000 Annual Cost = -20,000 Salvage Value = 24,000…

Q: rate of return method. Incremental Rate of Return, % Initial Alternative Investment, $ versus DN, %…

A: Incremental rate of return also known as internal rate of return method. IRR is a discounting…

Q: Which of the two alternatives based on future worth method of comparison should be selected?…

A: Future worth method computes the future value of the project or alternative available. Future worth…

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A: The IRR (internal rate of return ) and the MARR (minimum acceptable rate of return) means the rates…

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Q: Consider the following two exclusive projects, A and B:      Project  0  1  2  3  4…

A: Net Present Value - It is the difference between the present value of cash outflow and present value…

Q: Q15) Salalah company management is considering three competing investment Projects A, B and C. Year…

A: PI = Present value of future cashflows / Initial Investment

Q: Answer:

A: The profitability index (PI), also known as the profit investment ratio (PIR) or value investment…

Q: Project A               Project  B Net present value (a)      $ 2,000                   $ 3,500…

A: Solution: Particulars Project A  Project B Investment required $5,000 $10,000 Net Present…

Q: Which alternative is the most economical among the three alternatives shown their details in Table…

A: Future Worth refers to the value of current assets at a specified growth rate in the future for a…

Q: The five alternatives shown below are being evaluated by the rate of return method. Incremental ROR…

A: Since the projects are considered to be mutually exclusive the alternative project which is higher…

Q: Question 1 Data for two alternatives are as follows: A B INVESTMENT 35,000 50,000 ANNUAL BENEFITS…

A: IRR: In capital budgeting, the internal rate of return, or IRR, is a metric that is used to assess…

Q: The table below shows a comparison between three mutually exclusive alternatives. If the capital…

A: The capital budgeting is a technique that helps to analyze the profitability of the project that…

Q: Question 1: Salalalh Methanol company management is considering three competing investment Projects…

A: Profitability Index = PV of future cashflows/ Initial Investment

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.