Determine the FW of the following engineering project when the MARR is 16% per year. Is the project acceptable? Proposal A $9,500 5 years Investment cost Expected life Market (salvage) value Annual receipts Annual expenses A negative market value means that there is a net cost to dispose of an asset -$1.200 $8.000 $4 500 Click the icon to view the interest and annuity table for discrete compounding when the MARR is 16% per vear The FW of the following engineering project is S (Round to the nearest dollar)

Determine the FW of the following engineering project when the MARR is 16% per year. Is the project acceptable? Proposal A $9,500 5 years Investment cost Expected life Market (salvage) value Annual receipts Annual expenses A negative market value means that there is a net cost to dispose of an asset -$1.200 $8.000 $4 500 Click the icon to view the interest and annuity table for discrete compounding when the MARR is 16% per vear The FW of the following engineering project is S (Round to the nearest dollar)

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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Net Present Value—Unequal Lives Project A requires an original investment of $97,800. The project will yield cash flows of $21,000 per year for 9 years. Project B has a computed net present value of $10,100 over a 6-year life. Project A could be sold at the end of 6 years for a price of $46,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3…
Compute the payback statistic for Project A if the appropriate cost of capital is 7 percent and the maximum allowable payback period is four years. (Round your answer to 2 decimal places.) Project A Time: 0 1 2 3 4 5 Cash flow: −$1,400 $510 $600 $600 $380 $180 Payback years: _______.__
Net Present Value—Unequal Lives Project 1 requires an original investment of $47,900. The project will yield cash flows of $11,000 per year for five years. Project 2 has a calculated net present value of $11,800 over a three-year life. Project 1 could be sold at the end of three years for a price of $46,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690…
Net present value-unequal lives Project 1 requires an original investment of $83,000. The project will yield cash flows of $15,000 per year for 7 years. Project 2 has a computed net present value of $19,600 over a 5-year life. Project 1 could be sold at the end of 5 years for a price of $56,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Present Value of $1 at Compound Interest 10% 15% 20% 0.909 0.893 0.870 0.833 0.826 0.797 0.756 0.694 0.751 0.712 0.658 0.579 0.683 0.636 0.572 0.482 0.621 0.567 0.497 0.402 0.564 0.507 0.432 0.335 0.513 0.452 0.376 0.279 0.467 0.404 0.327 0.233 0.424 0.361 0.284 0.194 0.386 0.322 0.247 0.162 Year 6% 1 0.943 0.890 2 3 4 5 6 7 8 9 10 Year 1 2 3 4 5 6 7 8 9 10 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 12% Present Value of an Annuity of $1 at Compound Interest 10% 3.170 6% 12% 0.943 0.909 0.893 1.833 1.736 1.690 2.673 2.487 2.402 3.465 3.037 4.212 3.791 3.605…
Consider the three small mutually exclusive investment alternatives in the table below. The feasible alternative chosen must provide service for a 10-year period. The MARR is 12% per year, and the market value of each is 0 at the end of useful life. State all assumptions (repeatablity/co-terminated at 5 year study period) you make in your analysis. Which alternative should be chosen? A B Capital Investment PhP 2,000 PhP 8,000 PhP 20,000 Use IRR (FW equation) analysis. Annual revenues less expenses 600 2,200 3,600 Useful life (years) 5 5 10 ANSWER: IRRA = 15.24% ; IRRB = 11.65% ; IRRC = Blank 3% ; Choose alternative Blank 4 %3D %3D Do not use comma and any unit of measure. Use two decimal places in the Final answer.
An investment project costs $12,600 and has annual cash flows of $3,100 for six years Required: (a) What is the discounted payback period if the discount rate is zero percent? (Click to select) (b) What is the discounted payback period if the discount rate is 3 percent? (Click to select) (c) What is the discounted payback period if the discount rate is 20 percent? (Click to select) eBook & Resources eBook: 9.3. The Discounted Payback
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Two mutually exclusive alternatives have the estimates shown below. Use annual worth analysis to determine which should be selected at an interest rate of 10% per year. Q $-44,000 R $-84,000 First Cost AOC per Year Salvage Value $-10,000 $-5,000 in year 1, increasing by $1,000 per year thereafter $4,000 $5,000 Life 2 years 4 years Alternative (Click to select) should be selected.
Net present value—unequal lives Project 1 requires an original investment of $375,000. The project will yield cash flows of $90,000 per year for 8 years. Project 2 has a computed net present value of $50,000 over a 6-year life. Project 1 could be sold at the end of 6 years for a price of $40,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3…
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 8 percent and the maximum allowable discounted payback period is three years. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project C Time: 1 3 4 Cash flow: -$1,900 $840 $750 $790 $480 $280 Discounted payback period years Should the project be accepted or rejected?
Compute the discounted payback statistic for Project C if the appropriate cost of capital is 6 percent and the maximum allowable discounted payback period is three years. Note: Do not round intermediate calculations and round your final answer to 2 decimal places. Project C 0 1 2 3 Time: Cash flow: -$3,000 $1,280 $ 1,080 $ 1,120 Discounted payback period years Should the project be accepted or rejected? 4 $ 700 5 $ 500
Net Present Value—Unequal Lives Project 1 requires an original investment of $63,800. The project will yield cash flows of $13,000 per year for five years. Project 2 has a calculated net present value of $15,600 over a three-year life. Project 1 could be sold at the end of three years for a price of $56,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690…

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