Plot a sensitivity graph for annual worth versus initial cost, annual revenue, and salvage value for the data below. Vary only one parameter at a time, each within the range of -20% to +20%. MARR is 3%/year. Project life is 4 years. Based on your graph, which parameter shows the MOST sensitivity? Initial Cost: $120,000 - Annual Revenue: $25.000 - Salvage Value: $35,000 Cannot be determined O Annual Revenue O Initial Cost O Salvage Value

Plot a sensitivity graph for annual worth versus initial cost, annual revenue, and salvage value for the data below. Vary only one parameter at a time, each within the range of -20% to +20%. MARR is 3%/year. Project life is 4 years. Based on your graph, which parameter shows the MOST sensitivity? Initial Cost: $120,000 - Annual Revenue: $25.000 - Salvage Value: $35,000 Cannot be determined O Annual Revenue O Initial Cost O Salvage Value

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Required information. [The following information applies to the questions displayed below.] Project Y requires a $331,500 investment for new machinery with a five-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. (PV of $1. FV of $1. PVA of $1. and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation). Depreciation Machinery Selling, general, and administrative expenses Income Years 1-5 4. Determine Project Y's net present value using 9% as the discount rate. Note: Do not round intermediate calculations. Round your present value factor to 4 decimals and final answers to the nearest whole dollar. Net present value Not Cash Flows Project Y $ 400,000 Present Value of Annuity at 9% 179,200 66,300 29,000 $ 125,500 Present Value of Net Cash Flows
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A project with a life of 10 has an initial fixed asset investment of $25,620, an initial NWC investment of $2,440, and an annual OCF of −$39,040. The fixed asset is fully depreciated over the life of the project and has no salvage value. If the required return is 10 percent, what is the project's equivalent annual cost, or EAC? Show equations using excel.
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