IMPORTANT: PLEASE SAVE ALL YOUR HAND CALCULATIONS IN A FILE SO THAT YOU CAN SUBMIT THEM IF REQUIRED BY THE LECTURER. You are considering investing RM62000 in new equipment. You estimate that the net cash flows will be RM11000 during the first year, but will increase by RM2500 per year the next year and each year thereafter. The equipment is estimated to have a 8-year service life and a net salvage value of RM5200 at that time. Assume MARR of 7%. a Calculate the annual capital cost CR (ownership cost) for the equipment. b Determine the equivalent annual revenue. cIs this a wise investment? Y/N. 4 Submit Format: 7882 Format: 36630 Format: A
IMPORTANT: PLEASE SAVE ALL YOUR HAND CALCULATIONS IN A FILE SO THAT YOU CAN SUBMIT THEM IF REQUIRED BY THE LECTURER. You are considering investing RM62000 in new equipment. You estimate that the net cash flows will be RM11000 during the first year, but will increase by RM2500 per year the next year and each year thereafter. The equipment is estimated to have a 8-year service life and a net salvage value of RM5200 at that time. Assume MARR of 7%. a Calculate the annual capital cost CR (ownership cost) for the equipment. b Determine the equivalent annual revenue. cIs this a wise investment? Y/N. 4 Submit Format: 7882 Format: 36630 Format: A
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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Transcribed Image Text:IMPORTANT: PLEASE SAVE ALL YOUR HAND CALCULATIONS IN A FILE SO THAT YOU CAN SUBMIT THEM IF
REQUIRED BY THE LECTURER.
You are considering investing RM62000 in new equipment. You estimate that the net cash flows will be RM11000 during the first year, but will
increase by RM2500 per year the next year and each year thereafter. The equipment is estimated to have a 8-year service life and a net salvage
value of RM5200 at that time. Assume MARR of 7%.
a Calculate the annual capital cost CR (ownership cost) for the equipment.
b.Determine the equivalent annual revenue.
c.Is this a wise investment? Y/N.
Submit
Format: 7882
Format: 36630
Format: A
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