IBL project requires an investment of $15,900 and has anexpected life of 5 years. Ignore tax. Annual cash flows atthe end of each year are as follows:Amount in $4,0006,2004,0002,0006,100Year12345Economic growthInflation Rate2.5%4%Risk Premium1.8%REQUIRED1. Compute the payback period2. Find the discounted Payback Period3. What is the Net Present Value and the Profitabilityindex.4. Find the IRR of this project. Is it profitable?

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Answered: IBL project requires an investment of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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pls ans as soon as possible The average rate of inflation since 1970 until 2018 is 3.87%. In 1970, a gallon of gas could be bought for $0.25. Today a gallon of gas can be bought for $2.21. Has the cost of gas risen faster or slower than the rate of inflation?
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Global steel prices have a year-over-year inflationary rate increase of 12.4%. Tube Fab purchased $700,000 of a particular carbon steel during the year just ended right now, and they intend to purchase the same quantity at the end of each of the next 5 years. Tube Fab earns a real rate of 16% on their money. a) Determine the then-current amounts they will pay for steel at the end of each of the next 5 years. b) Determine the constant value amounts they will pay for steel at the end of each of the next 5 years. c. Determine Tube Fab's PW of expenditures over the next 5 years using then-current dollars. d. Determine Tube Fab's PW of expenditures over the next 5 years using constant value dollars. Include screen shots of any excel formulas used.
Ex-Ante Real Interest Rate 8.0% 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% DLF $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 $140 Quantity of Loanable Funds ($Million) The graph above shows a hypothetical loanable funds market. Currently the market is in equilibrium. Lenders and borrowers expect the inflation rate for the next year to be 2 percent and the nominal interest rate is SLF the nominal interest rate changes to interest rate equals percent. Suppose that the government announces that it will reduce the inflation rate to 1 percent. According to Fisher, this event creates an excess supply of loanable funds equal to million dollars in the very short run. However, soon percent. 6.00 percent and the real
Fink Co. is interested in purchasing a new business vehicle. The vehicle costs $50,000 and will generate constant-dollar delivery revenue of $20,000 (year O dollars) for each of the next 6 years. At the end of the 6 years, the vehicle will have a salvage value of $5,000. The tax rate is 21%, and annual inflation is 3%. Assuming that the vehicle is depreciated using MACRS (5-year property class) and that Fink Co. uses an after-tax real interest MARR of 8%, compute the PW, and determine whether Fink Co. should purchase the new business vehicle. Click here to access the TVM Factor Table calculator. Click here to access the MACRS-GDS Property Classes. Click here to access the MACRS-GDS percentages page. Click here to access the MACRS-GDS percentages for 27.5-year residential rental property. LA
ENGINEERING ECONOMICS; PLEASE Provide all steps INCLUDING EXCEL STEPS You want to invest $4000 in a mutual fund that offers a 4% guaranteed rate of return. Current interest rate is 5%, and inflation is expected to be 1% per year. How much will you accumulate in your account in 7 years in terms of today's dollars?
Required information The two machines shown are being considered for a chip manufacturing operation. Assume the MARR is a real return of 10% per year and that the inflation rate is 5.5% per year. Machine First Cost. $ M&O, $ per year Salvage Value, $ Life, years A -146,000 -70,000 40.000 5 B -800,000 -5,000 200,000 00 Which machine should be selected on the basis of an annual worth analysis if the estimates are in future dollars? What is the annual worth of the selected alternative? Select machine A ✓ The annual worth of the alternative is $
ed Question 10 Inflation Rate (n) 15.0% 14.0% 13.0% 12.0% 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 1,000 2,000 3,000 000't 4,000 000 5 5,000 0003 6,000 7,000 8,000 000'60 10,000 LRAS Real GDP (Y) This policy causes the inflation rate to drop to AD 12,000 3 11,000 13,000 14,000 15,000 SRAS 16,000 Consider the graph above. It is also in the files folder under the name Short Run and the Long Run. The graph pertains to a hypothetical country. The central bank in this country (also called the Fed) follows an inflation targeting policy. The current target inflation rate in 8 percent. The natural rate of unemployment is 5 percent and Okun's alpha is 8. 17,000 18,000 9,000 20,000 Finally, the president of the country appoints a new chairperson for the central band and the chair decides to bring the runaway inflation under control (as the U.S. FED did in 1980). The new chair realizes that 8 percent inflation target is way too high. So, s/he decides to reduce the long-term…
3 eBook Hint Print References Problem 14.030: Compare alternatives by calculating their capitalized cost Compare the alternatives below on the basis of their capitalized costs with adjustments made for inflation. Use / -9% per year and f= 3.5% per year. Alternative First cost, $ AOC. $ per year Salvage value, $ Life, years X -15,500,000 -25,000 105,000 00 The capitalized cost for alternative X is $[ The capitalized cost for alternative Y is $[ Select alternative X Y -12,500,000 -10,000 82,000 10
A capital asset has first cost of $10,000 and it depreciates at 10% rate annually. Operating costs over next four years are given below Year Operating costs, $/year 1. 1,200 2 2,200 3 3,800 2,200 Operating costs are expressed in actual dollars. Calculate EAC (Operating) if real interest rate is 10% and annual inflation is 2%. (Note: Don't use the $ sign in your answer and round it to 2 decimal places)
Question 7 15.0% 14.0% 13.0% 12.0% 11.0% .10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Inflation Rate (n) down to 0 decreases to 5.04 1,000 2,000 10.04 3,000 4,000 5,000 Consider the graph above. It is also in the files folder under the name Short Run and the Long Run. The graph pertains to a hypothetical country. The central bank in this country (also called the Fed) follows an inflation targeting policy. The current target inflation rate in 8 percent (I know, it is too high. We will deal with this problem later after appointing a new chairperson for the Fed). The natural rate of unemployment is 5 percent and Okun's alpha is 8. 7000.00 LRAS Suppose that consumer confidence in the economy declines and as a result AD decreases by 3,000 units. This reduction in demand causes the inflation rate to slow 7.00 percent in the short run. In the short run, the real GDP percent. AD Real GDP (Y) SRAS 6,000 7,000 8,000 9,000 10,000 3 11,000 12,000 13,000 14,000 15,000 16.000 17,000…
Consumer Price Index(a) The CPI was 214.5 for 2009 and 236.7 for 2014.Assuming that annual inflation remained constant forthis time period, determine the average annual inflationrate.(b) Using the inflation rate from part (a), in what year willthe CPI reach 300?

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