P Q Using the Benefit-Cost Ratio Method, Find what is the best alternative from the projects listed below if u know that (-10%) for both project. Details Initial investment (CU) Annual revenue (CU/year) Annual expense (CU/year) Project life (year) Investment due to replacement of some machines every 3 years. Salvage value (CU) Purchasing a new machine in the seventh year. Alternative 1 300 000 50 000 15 500 5 13 500 Non Non Alternative 2 200 000 75 000 29 000 10 Non 22 000 13 000
P Q Using the Benefit-Cost Ratio Method, Find what is the best alternative from the projects listed below if u know that (-10%) for both project. Details Initial investment (CU) Annual revenue (CU/year) Annual expense (CU/year) Project life (year) Investment due to replacement of some machines every 3 years. Salvage value (CU) Purchasing a new machine in the seventh year. Alternative 1 300 000 50 000 15 500 5 13 500 Non Non Alternative 2 200 000 75 000 29 000 10 Non 22 000 13 000
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:Q
which project will be the best using (EAW).
S
Using the Benefit-Cost Ratio Method, Find what is the best alternative from the projects listed below if
u know that (-10%) for both project.
Details
Initial investment (CU)
Annual revenue (CU/year)
Annual expense (CU/year)
Project life (year)
Investment due to replacement of
some machines every 3 years.
Salvage value (CU)
Purchasing a new machine in the
seventh year.
0
-113 000
Alternative 1
300 000
50 000
15
500
1
30 000
5
13 500
Q5:A person is planning a new business, the initial investment and cash flow pattern for a new business are
shown below:
Non
Non
2
Year
Cash flow
(CU)
The expected life of the project is five year.Find the rate of return for a new business.
30 000
3
30 000
Alternative 2
200 000
75 000
29 000
10
Non
4
30 000
22 000
13 000
5
30 000
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