Pamela recently moved to Celebration, Florida, an unincorporated master-planned community in Osceola County that connects directly to the Walt Disney World parks. To support the planned community's environmentally friendly transit system and to save on transportation costs, she wants to buy a new Neighborhood Electric Vehicle (NEV). She is looking into three models of the NEVS and has been provided with the information below. Compare the alternatives shown and determine which model should be purchased if Pamela's personal MARR is 8% per year. Initial costs Dynasty Might-E Zenn $13,000 $13,550 $14,000 Annual expenses $4,781 $5,281 $6,081 Annual savings $6,781 $7,581 $7,581 Salvage value $1,300 $1,600 $2,000 Life (years) 10 10 10 10 IRR 9.64% 11.93% 3.36%

Pamela recently moved to Celebration, Florida, an unincorporated master-planned community in Osceola County that connects directly to the Walt Disney World parks. To support the planned community's environmentally friendly transit system and to save on transportation costs, she wants to buy a new Neighborhood Electric Vehicle (NEV). She is looking into three models of the NEVS and has been provided with the information below. Compare the alternatives shown and determine which model should be purchased if Pamela's personal MARR is 8% per year. Initial costs Dynasty Might-E Zenn $13,000 $13,550 $14,000 Annual expenses $4,781 $5,281 $6,081 Annual savings $6,781 $7,581 $7,581 Salvage value $1,300 $1,600 $2,000 Life (years) 10 10 10 10 IRR 9.64% 11.93% 3.36%

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

See similar textbooks

Similar questions

Anna has been in the business of breeding stock horses on her 25 - acre property for the past 20 years. Now retiring from the business, Anna has decided to sub-divide and sell off her land in small parcels. She has been advised by her neighbours who have done the same thing that she will achieve a much better price for the farm by doing this. Anna engaged a surveyor and applied to the local council for the relevant development applications. Deciding to retain a block of 50 acres on which her house was situated and so that she could still keep a few horses. She then sub-divided the remaining land into forty blocks of five acres. All up the sub - division work cost Anna $200,000 which included removal of trees, land levelling and road clearing. In March 2023, Anna was $2,200, 000 by a property developer for ten of the blocks. She accepted the offer and settlement took place in April 2023. The developer then went on to connect utilities and offer house and land packages for sale. Ten of…
Stephanie Carter has been gifted a sum of $50,000 by her grandparents on completing her graduation successfully. She is a fresh finance graduate and is excited to invest some money in the capital market, for which she intends to use the gifted sum of $50,000. However, instead of committing this money to the market immediately, she decides to wait for some time, work in the field and acquire some experience before proceeding with her intended investment. She thus contemplates an extremely conservative investment in a portfolio of stocks and bonds, at the start of year 5 from now. For now, she will leave the $50,000 in a fixed deposit with the bank which promises an interest rate of 6% per annum. She will require a return of at least 9% on her stock investments and 4% on bond investments. Stephanie would have to pay 25% taxes on any interest income. Dividends will be tax-free. Stephanie's research has allowed her to narrow down on the following investment candidates: Stocks: 1.…
In January 2006, Mary Jane Bowers was reviewing her plans for the April 1 opening of a garden center in Lynchburg, Virginia. She had selected Lynchburg as the town for a new home, after deciding to leave the large, northern city where she had both worked for the past 10 years. Bowers had a degree in horticulture and had worked for a large chemical company in its agricultural- herbicide division. Along with the decision to move, Bowers decided to change her work status as well. She wanted to devote her working days to something she enjoyed and was passionate about. Thus, she decided to go into business for herself, starting a retail garden store selling plants, trees, and shrubs. Bowers accumulated information on upscale retail garden stores from a number of sources, talked to suppliers, looked at potential locations, and established a banking relationship with the Campbell National Bank. She wanted to make sure that she had enough money to get the business off to a good start. Mary…
John owns a house in Fort Meyers, FL. He wants to build a pool in his back yard, as he believes he can use the pool year-round. Why might installing a pool increase the value of John's house? Based on the principle of change, market conditions will require a pool. Based on the principle of contribution, most future buyers will place a high value on the pool. Based on the principle of highest and best use, a pool is a requirement in Florida. Based on the principle of anticipation, a pool will appreciate in value.
Pharoah Corp. is thinking about opening a soccer camp in southern California. To start the camp, Pharoah would need to purchase land and build four soccer fields and a sleeping and dining facility to house 150 soccer players. Each year, the camp would be run for 8 sessions of 1 week each. The company would hire college soccer players as coaches. The camp attendees would be male and female soccer players ages 12-18. Property values in southern California have enjoyed a steady increase in value. It is expected that after using the facility for 20 years, Pharoah can sell the property for more than it was originally purchased for. The following amounts have been estimated. Cost of land Cost to build soccer fields, dorm, and dining facility Annual cash inflows assuming 150 players and 8 weeks Annual cash outflows Estimated useful life Salvage value Discount rate Click here to view the factor table. (a) Net present value $ $318,000 $636,000 $975,200 $890,400 Should the project be accepted?…
I need help with this housing affordability question... Five years have passed and Jamie Lee, 34, is considering taking the plunge--not only is she engaged to be married, but she is also deciding on whether to purchase a new home. Jamie Lee’s cupcake café is a success! It has been open for over a year now and has earned itself rave reviews in the local press and from its regular customers who just cannot get enough of her delicious varieties of cupcakes. One such customer, who stopped by on a whim in the café’s first week of business, is Ross. After a whirlwind courtship, Ross, a self-employed web designer, proposed, and Jamie Lee agreed to be his wife. The bungalow that Jamie Lee has been renting for the past five years is too small for the soon-to-be newlyweds, so Jamie Lee and Ross have purchased a brand new three-bedroom, 2 ½ bath home in a quiet neighborhood for $293,000. The provided information and the table below to calculate the affordable mortgage amount that would be…
Jared and Melissa are married. They have owned their primary residence for 10 years and have lived in it the entire time. They paid $350,000 for the house and land and it is now worth $ 900,000. Due to the property's prime location in Stephenville, the City of Stephenville has decided to "take" the property and turn it into a public park and venue. The City sends Jared and Melissa a letter offering to buy the property for $800,000. Jared and Melissa reject the offer and the case goes to trial where a judge determines the value to be $950,000 and orders the City to pay that amount for the property it claimed using eminent domain. After Jared and Melissa receive the $950,000, they decide not to buy a new house and instead they live in their camper and travel around the country. Do Jared and Melissa have to pay tax on the money they received? Be sure to fully explain your analysis.
Scarlett is considering the purchase of a new Wolf gas range by Sub-Zero Group, Inc. to increase the quality of the food served in her restaurant. It will also enhance the cooking experience for her and her chefs, as they won't have to fuss with the finicky electric burners they currently use. However, the new range is expensive. It will cost $9,920 to buy and properly install. On the upside, it should last for at least 7 years, at which time Scarlett may consider trading it in for another new range. While her operating costs will not decrease as a result of this purchase, Scarlett will be able to generate additional gross margin of at least $1,510 in the first year. After that, she expects the additional gross margin to grow by 10% each year for the next 4 years, at which point it will become stable for the remainder of the 7- year life. She believes the new range will be worth $1,010 at the end of this 7-year period. Her current range can be salvaged today for $250. Click here to…
AN Daniel and Darnell are considering offering a doggy daycare service. After some research, Daniel and Darnell found several pet daycare facilities in their area; but they were expensive! Further, the facili- ties were sterile and didn't provide for a "homey" or fun environment for their pets. Daniel and Damell felt they could easily solve this problem. Daniel's home would be the location for their business since it already had a fenced-in yard a nd is located two blocks from a dog park. Estimated costs for building an outdoor shelter, plus other licensing and business start-up costs, are as follows. Shelter (depreciated over 7 years) $500 per year Licensing & other annual costs $750 per year $15 per hour $15 per day per dog Hourly wage for hired labor; planned for only 200 hours per year Variable costs for food Estimated volume of dogs per day (Assume business is open 5 days a week) Which pricing strategy, target costing or cost-plus, would be more appropriate for this company,…
Tony’s favorite memories of his childhood were the times he spent with his dad at camp. Tony was daydreaming of those days a bit as he and Suzie jogged along a nature trail and came across a wonderful piece of property for sale. He turned to Suzie and said, “I’ve always wanted to start a camp where families could get away and spend some quality time together. If we just had the money, I know this would be the perfect place.” On November 1, 2022, Great Adventures purchased the land by issuing a $540,000, 6%, 10-year installment note to the seller. Payments of $5,995 are required at the end of each month over the life of the 10-year loan. Each monthly payment of $5,995 includes both interest expense and principal payments (i.e., reduction of the loan amount).Late that night Tony exclaimed, “We now have land for our new camp; this has to be the best news ever!” Suzie said, “There’s something else I need to tell you. I’m expecting!” They decided right then, if it was a boy, they would name…
Tony’s favorite memories of his childhood were the times he spent with his dad at camp. Tony was daydreaming of those days a bit as he and Suzie jogged along a nature trail and came across a wonderful piece of property for sale. He turned to Suzie and said, “I’ve always wanted to start a camp where families could get away and spend some quality time together. If we just had the money, I know this would be the perfect place.” On November 1, 2022, Great Adventures purchased the land by issuing a $740,000, 6%, 10-year installment note to the seller. Payments of $8,216 are required at the end of each month over the life of the 10-year loan. Each monthly payment of $8,216 includes both interest expense and principal payments (i.e., reduction of the loan amount).Late that night Tony exclaimed, “We now have land for our new camp; this has to be the best news ever!” Suzie said, “There’s something else I need to tell you. I’m expecting!” They decided right then, if it was a boy, they would name…
Sue is a server at a sports bar. She is thinking of having some plastic surgery to enhance some of her features because her friends at work told her that her tip income will go up 50%. Can Sue deduct plastic surgery costs if she does that to increase her income from tips? Explain.

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS