Investment cost28000 $Annual cost15000 $Annual revenue23000 $Salvage value6000 $N10O a.Yes this investment profitable because i' is almost equal to 21% which is > MARROb. Yes this investment profitable because i' is almost equal to 33% which is > MARROc. No this investment is not profitable because i' is almost equal to 13% which is < MARROd. Yes this investment profitable because i' is almost equal to 31% which is > MARRDe.f.gNo this investment is not profitable because i' is almost equal to 17% which is < MARRNo this investment is not profitable because i' is almost equal to 5% which is < MARRYes this investment profitable because i' is almost equal to 26% which is > MARR For the following investment if MARR is equal to 20%, according to Internal Rate of Return (IRR) method is thisinvestment profitable.

Step 1:Let us calculate the IRR as shown below from the cash flow: Step 2:So, Here IRR = 26.36%…

Answered: Investment cost 28000 $ Annual cost…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

An investor has invested $250,000 in a new rental property. Her estimated annual costs are $6000 and annual revenues are $20,000. What rate of return per year will the investor make over a 30-year period ignoring the salvage value? If the property can be sold for $200,000 what is the rate of return?
Please include handwritten solution and cash flow diagram, thanks
Don't Use Excel function. Need Handwritten /Typed based solution using formula. Please Solve as fast as.
Janice V. bought a 6% $1000 20-year bond for $825. She received a semiannual dividend for 8 years, then sold it immediately after the sixteenth dividend for $850. What rate of return did she make per semiannual period, and per year (nominal)? The rate of return that she made per semiannual period is The rate of return that she made per year is %.
please answer all parts! list answers with question numbers. do not skip blanks !
awarded pred Hint Old Southwest Canning Co. has determined that any one of four sterilizing machines can be used in its chili-canning operation. The costs of the machines are estimated; all machines have a 5-year useful life. If the MARR is 25% per year, determine which machine should be selected on the basis of the rate of return (ROR) analysis. Machine 2 3 Select machine First Cost, $ -28,100 -51,000 -32,000 -33,000 Annual Operating Cost (AOC), $ -20,000 -12,000 -19,000 18,000
RKI Instruments manufactures a ventilation controller designed for monitoring and controlling carbon monoxide in parking garages, boiler rooms, tunnels, etc. The net cash flow associated with one plant for the first 3 years of operation is shown. (a) What do the two rules about sign changes indicate concerning i* values? (b) Find all rate of return values between 0 and 100%. Year Net Cash Flow, $ 0 −30,000 1 20,000 2 15,000 3 −2000
Five years ago, Logocom made a $5 million investment in a new high-temperature material. The product was not well accepted after the first year on the market. However, when it was reintroduced 4 years later, It did sell well during the year. Major research funding to broaden the applications has cost $15 million in year 5. Determine the rate of return for these net cash flows (in $1.000 units). Year NCF, $1000 -5,000 4,500 4 21,500 -15,000 The rate of return is % per year.
Barron Chemical uses a thermoplastic polymer to enhance the appearance of certain RV panels. The initial cost of one process was $126,000 with annual costs of $48,000. Revenues are $80,000 in year 1, increasing by $100O per year. A salvage value of $20,000 was realized when the process was discontinued after 8 years. What rate of return did the company make on the process? The rate of return made by the company is %.
A man buys a corporate bond from a bond brokerage house for $875. The bond has a face value of $1000 and a 4% coupon rate paid semiannually. If the bond will be paid off at the end of 12 years, what rate of return will the man receive?
An existing bottling plant requires investing $50,000 per year starting next year for 10 years. The plant is expected to generate a revenue of $30,000 per year starting next year and increasing by S5000 per year thereafter The plant will be sold for $2500 after 10 years. The correct Standard Notation and expected Rate of Return is:
Mr. Smith has saved RM1 800 each year for 20 years in Unit trust account. A year after the saving period ended, Mr. Smith withdrew RM7 500 each year for a period of 5 years. In the sixth and seventh years, he only withdrew RM5 000 per year. In the eighth year, he decided to withdraw the remaining money in his account. The interest rate was 6% per year throughout the whole period. Q1 (a) Draw the cash flow diagram SK 5K 7.5K 7.5K 7 SK 7.5K 7.5K 4 6 26 27 20 21 22 23 24 25 28 1.8K 1.8K iSK (b) Determine the remaining amount of money that he can withdraw at the end of the eighth year 1800 E, 6%, 20) (,6%,8) = 7500 (.6%, 5) (F. 6%.,3) + 5x (.6%, 2) + 5K (E, 6%, 1) + X

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS