John Cartwright gathered data on the relative costs of a solar water heater system. The data are based onstatistics which they have broken down into 4 categories. Low sunlight days will heat 2.0 gpm of water tothe desired temperature of 120F for 4 hours/day. Medium sunlight will heat 2.5 gpm of water to the desiredtemperature for 4 hours/day. Strong sunlight will heat 3.0 gpm of water to the desired temperature for 4hours. Very strong sunlight will heat 3.3 gpm of water to the desired temperature.- If they can offset heating of water with an electric heater, they will save $2.0 per gallon.If the probablyof sun of each of the 365 day year is: Low sunlight - 30%, Medium sunlight - 40%. Strong Sunlight- 20%,Very Strong - 10% for Ohio. What is the [Select]of this project over a 5 year life ifthe project costs $2,200,000 and the MARR is 6% and would you [Select]it?- If they can offset heating of water with an electric heater, they will save $2.0 per gallon. If the probablyof sun of each of the 365 day year is: Low sunlight - 30%, Medium sunlight - 40%. Strong Sunlight- 20%,Very Strong - 10% for Ohio. What is the [Select]V of this project over a 5 year life ifSelect ]the project costs $2,200,000 and the M D. 332,844B. -211,421A. -332,844B. -211,421|ct]it?of sun of each of the 365 day year is: Low sunlight - 30%, Medium sunlight - 40%. Strong Sunlight- 20%,Very Strong - 10% for Ohio. What is the [Select ]of this project over a 5 year life ifthe project costs $2,200,000 and the MARR is 6% and would you [ Select ]it?[ Select]B. NoA. Yes

The question is based on the concept of capital budgeting for investment appraisal. The net present…

Answered: John Cartwright gathered data on the…

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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Please Show Work and formulas used in Excel 3. A local college is installing steam pipes on their campus and must decide what insulation to use. If no insulation is used, it has been estimated that the heat loss per foot will be $2.10. If 1-inch thick insulation is used, 70% of the heat loss will be eliminated. If 2-inch thick insulation is used, 84% of the heat loss will be eliminated. The 1-inch thick insulation costs $0.30 per foot to install, and the 2-inch thick insulation costs $0.80 per foot to install. The campus has 230,000 ft of steam pipe on campus, and a MARR=10%. Assume the insulation has a life of 10 years. (a) Calculate the present worth (PW) of all alternatives. (b) Calculate the future worth (FW) of all alternatives. (c) Calculate the annual worth (AW) of all alternatives. (d) Rank the alternatives by any of the above metrics. Explain your choice using one of the ranking methods (PW/FW/AW), as if you were talking to your boss, a non-engineering economist. (e) What…
A company needs a CNC machine. One of four alternative CNC machines will be selected. Machines have no salvage value. Minimum attractive rate of return is %10. The costs of the machines are given in the table below. And please make profitability by using equivalent value methods such as present value, annual equivalent cost and future value, and return rate methods such as internal rate of return and external rate of return. Finally, would you compare all the data? The problem has no input values, only the values in the photo I sent you.
A horticulturist has just set up vegetable cultivation in a greenhouse where he grows peppers and tomatoes using sustainable energy sources, electricity for lighting and thermal energy for heating. He grows x units of peppers and y units of tomatoes. The entire amount that the farmer grows is sent to the market. The cost function of the crop is described as follows equation: ?(?, ?) = 12?2 + 24?2 The lighting's capacity means that it cannot grow more than 5,000 units in total per month. a. What should be the division between the production of peppers and tomatoes to minimize cost per month with the aim of always fully utilizing the capacity of the greenhouse? What is this minimum cost per month? b. Explain the significance of calculating the Lagrange multiplier i.e. interpret and at the same time discuss how it can be used to calculate if more productive lighting is obtained in the greenhouse and the cultivation will be 5,750 units per month.
SOLVE THE FOLLOWING PROBLEMS: 1. A civil engineer has 2 alternative designs for a house. Both designs involve the acquisition of a work force that will be provided by the owner and other capital equipment to be used for this construction only. a. Design 1 calls for a workforce consisting of 5 men each costing P500/day. This design will be finished in 4 months. b. Design 2 calls for a workforce consisting of 10 men each costing P350/day and is expected to be finished in 3 months. In addition, there will be a project engineer who will supervise the work and will be paid P1200/day. His supervision will be required during the entire construction period. Disregarding material cost, how much is the total salary expenses for Design 1 and for Design 2. Assume that there are 24 working days in a month.
A multimodal logit mode choice model is calibrated for 10, 000 persons. The resulting utility function is given below: U = a – 0.015C – 0.03T Where: C – out – of - pocket cost, pesos T - Travel time, min a = -0.25 for cars, -0.33 for aircon bus, and 0.40 for jeepney %3D For a particular OD pair, three modes are available, with charactersitics as follows: Travel time, Ave. occupancy Out-of-pocket cost, pesos 50 Mode person/veh 2 min 30 Car 10 45 40 Aircon Bus 5 50 14 Jeepney Determine the following: Percentage share of each mode. No. of vehicles of each mode. 2.
The production department is proposing the purchase of an automatic insertion machine. It has identified three machines and has asked the accountant to analyze them to determine which one has the best average rate of return. Line Item Description Machine A Machine B Machine C Estimated average income $47,060.44 $72,961.50 $73,785.60 Average investment 336,146.00 243,205.00 491,904.00 a. Machine C b. Machine A c. Machines B and C have the same preferred average rate of return. d. Machine B
I know there is a Bartleby on this, but the commas are all out of place and I'm still confused. Could you give a more in-depth solution and explain on how to calcultae FCF, specifically with excel functions? We are entering the widget business. It costs $500,000, payable in year 1, to develop a prototype. This cost can be depreciated on a straight-line basis during years 1-5. Each widget sells for $40 and incurs a variable cost of $20. During year 1 the market size is 100,000, and the market size is growing at 10% per year. Profits are taxed at 40%, but there are no taxes on negative profits. a) Given our other assumptions, what market share (in %) is needed to ensure the total free cash flow (FCF) of $0 over the five year period? Note: FCF during a year equals after-tax profits plus depreciation minus fixed costs (if any).b) Describe how an increase in percent market growth rate changes total FCF over years 1-5.c) Describe how simultaneous changes in percent market share and changes…
Consider a drill press containing three drill bits. The current policy (called individual replacement) is to replace a drill bit when it fails. The firm is considering changing to a block replacement policy in which all three drillbits are replaced whenever a single drill bit fails. Each time the drill press is shut down, the cost is $100. A drill bit costs $50, and the variable cost of replacing a drill bit is $10. Assume that the time to replace a drill bit isnegligible. Also, assume that the time until failure for a drill bit follows an exponential distribution with a mean of 100 hours. This can be modeled in @RISK with the formula 5RISKEXPON (100). (Note: If you have the academic version of @RISK, this problem will require more RISKEXPON functions than the 100 allowed, but there is an easy workaround. An exponentially distributed random variable can be generated with Excel functions only using the formula =-Mean*LN(RAND()). Then @RISK can still be used to run the simulation.)…
If the contribution margin per unit is Php 15 and it takes 3.0 machine hours to produce the unit, the contribution margin per unit of limited resource is: O Php 5.00 O Php 20.00 O Php 4.00 O Php 11.00 O None of the above. Activate Wing
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Three types of bits can be used in an automated drilling operation. A bright high-speed steel (HSS) bit is the least expensive to buy, but it has a shorter life than either gold oxide or titanium nitride bits. The HSS bits will cost $3500 to buy and will last for 3 months under the conditions of use. The operating cost for these bits will be $2000 per month. The gold oxide bits will cost $6500 to buy and will last for 6 months with an operating cost of $1500 per month. The titanium nitride bits will cost $7000 to buy and will last 6 months with an operating cost of $1200 per month. At an interest rate of 12% per year compounded monthly, which type of drill bit should be selected? Use a future worth analysis.
Select all that are true with respect to comparing machines with unequal lives - i.e., choosing the best machine for the project. Group of answer choices If you simply estimate NPV without accounting for the different lives, NPV may lead to an incorrect decision You cannot use NPV to make this decision If you estimate NPV CORRECTLY, it will lead you to the correct decision One way to handle this type of decision, is to use what is called "equivalent annual cost" (EAC), which is essentially the all-in annual economic cost of the machine Estimate equivalent annual cost (EAC) by taking the NPV of the machine and dividing by its useful life

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