Determine the capitalized cost of a research laboratory which requires P5,000, e00 for original construction; P100,000 at the end of every year for the first 5 years and then P120, e00 each year thereafter f or operating expenses, and P500, 000 every 6 years for replacement of equipment with interest at 12% per annum? OA. 6,441,350 OB. 6,067,015 OC6,632,445 OD.6,573,650 O E. None of the above

Determine the capitalized cost of a research laboratory which requires P5,000, e00 for original construction; P100,000 at the end of every year for the first 5 years and then P120, e00 each year thereafter f or operating expenses, and P500, 000 every 6 years for replacement of equipment with interest at 12% per annum? OA. 6,441,350 OB. 6,067,015 OC6,632,445 OD.6,573,650 O E. None of the above

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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Should WLW lease or construct their own production facilityOption 1: ConstructCosts to incur:Buying land, construct building and getting ready for use$ 360,000Taxes, insurance, and repairs (per year)$ 34,000Intended years of use20Projected market value in 20 years$ 1,600,000Maximum down payment WLW can make$ 500,000Remainder in four payments of;$ 160,000Revenue opportunityBuilding annex will be leased to a tenant and will generate a lease revenue (per year) for 10 years$60,000Option 2: LeaseIntended years of use20First lease payment due now$ 90,000Rest of the lease payments (years 2-20)$ 90,000Operating costs to be paid by WLWRepairs (annual)$ 9,000Maintenance (annual)$ 26,000Initial one-time deposit, will be returned in year 20$ 40,000Required rate of return15%Methodology:The consulting team is proposing to perform a NPV analysis and determine the benefit to leasing or construction.Based on the analysis, they will recommend the preferred option (construction or leasing).
The equivalent annual worth of alternative A is closest to:a. $-25,130b. $-37,100c. $-41,500d. $-42,900
answer an discuss pls
SHCJ Research Laboratory requires P3,500,000 for original construction, P500,000at the end of every year for the first 6 years and then P600,000 each year thereafterfor operating and maintenance expenses, and P2,000,000 every 10 years forreplacement of equipment with interest at 12% per annum. Determine thecapitalized cost of the said research laboratory.
Compare three alternatives on the basis of their capitalized costs at i = 13% per year and select the best alternative. Alternative E F G First Cost $-85,000 $-325,000 $-825,000 AOC, per Year $-65,000 $-20,000 $-6,000 Salvage Value $25,000 $75,000 $500,000 Life, Years 2 4 ∞ The capitalized cost of alternative E is $ , alternative F is $ , and alternative G is $ . The best alternative is E G F .
A bridge that was constructed at a cost of P 75,000 is expected to last 30 years, at the end of which time its renewal cost will be P 40,000. Annual repairs and maintenance are P 3,000. What is the capitalized cost of the bridge at an interest of 6%? 133,433.00 50,000.00 125,000.00 140,625.00 75,948.67 58,433.00
Tiberius Manufacturing is considering two alternative investment proposals with the following data: Proposal X Investment $10,800,000 Useful life. Estimated annual net cash inflows for 5 years 5 years $2,160,000 Residual value $60,000 Depreciation method Straight-line Required rate of return 14% Calculate the accounting rate of return for Proposal Y. (Round any intermediate calculations and your final answer to two decimal places.) OA. 13.90% OB. 11.56% OC. 17.83% OD. 7.58% Proposal Y $440,000 5 years $99,000 $35,000 Straight-line 13%
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A research laboratory which requires P5M for original construction; P100T at the end of every year for the first 6 years and then P120T each year thereafter for operating expenses, and P500T every 5 years for replacement of equipment with interest at 12% per annum. What is the cost of perpetual operation? a. P917,740 b. P977,140 c. P719,740 d. P717,940
project which equires initial 3. A con party. вах а outlay of £600.000 and working capital of K180 000. The project net cash inflows are k 200.000 at it is projected current price levels. At the end of 5 years, it is that the project will have a terminal valice of K50 000 and that the elimination of working capital will provide inflow equal to its initial book value. the per year an compamps post tax cost of capital in 14%. in normind Hermo (money teme) and the inflation rate is projected to be 5%. per annum. the equipment will be subjected to tax depreciation allowances of 25% per anmum on reducing balance basis which can be claimed can be claimed against taxable profits from the current year, which is shortly to end The rate of corporate tax is 35% payable in arrears year Required: Determine whether or not the NPV of the project will justify the investment.
18. Determine the capitalized cost of a bridge whose cost is P200 Million and its life is 50 years, if the bridge must be partially rebuilt at a cost of P100 Million at the end of each 50 years, and an annual maintenance cost is P500,000 and it will be needed to be repair every 10 years for P2 Million. i = 6%
The net investment of decision is P276,200 which includes P247,500 capitalizable cost of machine and P50,000 of additional net working capital. The machine has a useful life of 5 years and a salvage value of P27,500. The annual operating cash inflow and outflow from this decision are P140,000 and P60,000 respectively. Assume a tax rate of 40% and a cost of capital of 10%. Requirement: 1. After-tax net annual cashflow 2. Return of capital at the end of the investment 3. Net present value of the investment decision? 4. Profitability index of the investment decision

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