Problem 1 Four alternative designs are being considered for a pet-exercising treadmill. The company's MARR is 18%. The cash flows associated with each are given in the following table. The Judas The Lancelot The Bella The Lilo Capital Investment $130,000 $160,000 $50,000 $120,000 $50,000 $20,000 $23,000 $4,000 $141,000 Annual Revenues $50,000 $15,000 $23,000 $4,000 $50,000 $13,000 $18,000 $5,000 Annual Expenses $14,000 $15,000 $15,000 Refurbishment Cost at EOY 5 Market Value after 10 years IRR ??? 21.8% 21.6% 17.7% Here are various interest tables you can use to look up factor values. 10% Interest Table Table 12% Interest Table 15% Interest Table 18% Interest 20% Interest Table 25% Interest Table

Problem 1 Four alternative designs are being considered for a pet-exercising treadmill. The company's MARR is 18%. The cash flows associated with each are given in the following table. The Judas The Lancelot The Bella The Lilo Capital Investment $130,000 $160,000 $50,000 $120,000 $50,000 $20,000 $23,000 $4,000 $141,000 Annual Revenues $50,000 $15,000 $23,000 $4,000 $50,000 $13,000 $18,000 $5,000 Annual Expenses $14,000 $15,000 $15,000 Refurbishment Cost at EOY 5 Market Value after 10 years IRR ??? 21.8% 21.6% 17.7% Here are various interest tables you can use to look up factor values. 10% Interest Table Table 12% Interest Table 15% Interest Table 18% Interest 20% Interest Table 25% Interest Table

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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Annual cash inflows that will arise from two competing investment projects are given below: Investment A $ 3,000 4,000 5,000 6,000 $ 18,000 Year 1 2 3 4 The discount rate is 10% Click here to view Exhibit 148 1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables Required: Compute the present value of the cash inflows for each investment Year 1234 S S Investment B $6,000 5,000 4,000 3,000 $18,000 Present Value of Cash Flows Investment A 300 300 $ Investment B
Use the trial and error method combined with linear interpolation to solve for the IRR of The Judas design (to one decimal place, XX.X%)
ic Yo NS io cer ist bun ngs nnée Current Attempt in Progress Blossom Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $905,000, and project B's cost is $1,247,300. Cash flows from both projects are given in the following table. Year 1 2 3 4 Project A $86,212 313,562 427,594 285,552 Project B $586,212 413,277 231,199 What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.) Discounted payback period of project A Discounted payback period of project B will he accepted with a discount rate of 8 percent? átv zoom
ofice eBook Problem Walk-Through A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 1 2 3 4 Project S -$1,000 $878.81 $250 $15 $5 Project L -$1,000 $0 $240 $400 $782.91 The company's WACC is 8.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places. %
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12q-19

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