Q10. The equation that will yield the external rate of return (ERR) of the following project i= $25,000 $6,000 Investment Cost Annual Receipts Annual Expenses Market Value $7,000 Expected Life 5 years 8% A. 25,000 (F/P, i%, 5) = 7,000 +6,000 (P/F, 8%, 5) B. 25,000 (F/P, i%, 5) = 7,000 6,000 (P/A, 8%, 5) C. 25,000 (F/P, i%, 5) = 7,000 + 6,000 (F/A, 8%, 5) D. 25,000 (P/F, i%, 5) = 7,000 - 6,000 (F/A, 8%, 5) E. None

Q10. The equation that will yield the external rate of return (ERR) of the following project i= $25,000 $6,000 Investment Cost Annual Receipts Annual Expenses Market Value $7,000 Expected Life 5 years 8% A. 25,000 (F/P, i%, 5) = 7,000 +6,000 (P/F, 8%, 5) B. 25,000 (F/P, i%, 5) = 7,000 6,000 (P/A, 8%, 5) C. 25,000 (F/P, i%, 5) = 7,000 + 6,000 (F/A, 8%, 5) D. 25,000 (P/F, i%, 5) = 7,000 - 6,000 (F/A, 8%, 5) E. None

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

1. A capital budgeting project is acceptable if the rate of return required for such a project is greater than the project's internal rate of return. True False
(c) If A and B are mutually exclusive projects, which project would you select based on the rate of return on incremental investment at MARR = 10%? The rate of return on the incremental investment is %. (Round to one decimal place.) Which project would you select based on the rate of return on incremental investment at MARR = 10%? Choose the correct answer below. Project A O Project B 1: More Info FOT23 n 0 1 Net Cash Flow Project A - $145,000 35,000 35,000 140,000 Project B - $130,000 25,000 25,000 150,000
Need some assistance with this
Is it important to conduct a thorough investment analysis before accepting to undertake and agricultural project? YES or NO. Provide motivation for your answer.
3 Question 16 It makes no difference in the final answer if a rate of return equation is expressed in terms of P, A, or F. True or False Question 24 In the case of independent projects, only those projects for which the net present value is greater than or equal to 0 are retained. Options for question 24: True or False
Solve this problem using the incremental Benefit - Cost ration with, expected life of 10 years and rate of return of 10% Alternative A Initial cost Annual maintenance cost Estimated annual benefit $50,000 $4,000 $10,000 Alternative B Initial cost $30,000 Annual maintenance cost $3,000 Estimated annual benefit $9,000 a. Select A with B/C =1.14 b. Select B with B/C 1.14 OC. Select B with B/C = 0.14 O d. Reject A with B/C = 1.14
ENGINEERING ECONOMY RATE WILL BE GIVEN. WRITE THE COMPLETE SOLUTIONS/EXPLANATION LEGIBLY OR TYPEWRITTEN. GIVE STRAIGHT TO THE POINT EXPLANATION. Your company presently uses a crew of its own employees for all major maintenance. On average, 44 major repairs are performed each year at 20 lost production hours per repair. Keeping the crew costs $1,300,000 per year plus any lost production cost. Lost production costs are estimated at $2,500 per hour. Your company is considering replacing its in-house maintenance work with an outside company (Ajax) working under an annual maintenance contract. This proposal will pay Ajax $2,180,000 per year but your company will still have to pay for all lost production time. Ajax claims that the time per repair will decrease because of the contractors’ substantial maintenance experience. Assuming the number of major repairs and the cost of lost production time remain the same, how much time per repair is the maximum allowable for Ajax to be the…
SUBJECT: ENGINEERING ECONOMICS (a) Identify the Given and the Unknown or what is being asked in the problem (b)Provide the formula to be used (c)Show the complete solution. The final answer is already provided. What is the value of a perpetuity of P100 per year if the discount rate is 5%, 7%, 11%? Answer: P value if 5% = P2,000.00, P value if 7% = P1,428.57, P value if 11% = P909.09
You are considering an investment project with the financial information provided below. Suppose the company is most concerned about the impact of its price estimate on the project's rate of return. How would you address this concern? The break-even value of unit price is ?
Which of the following statements is incorrect?(a) Holding on to cash is the most risk-free investment option.(b) To maximize your return on total assets (ignoring financial risk), you mustput all your money into the same type of investment category.(c) Diversification among well-chosen investments can reduce market volatility.(d) Broader diversification among well-chosen assets always leads to a higherreturn without increasing additional risk.
The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash Accounts receivable Inventory Buildings and equipment, net Accounts payable Common shares Retained earnings a. The gross margin is 25% of sales. b. Actual and budgeted sales data are as follows: March (actual) April May June $50,000 $60,000 $72,000 $ 8,000 20,000 36,000 120,000 21,750 150,000 12,250 July $90,000 $48,000 c. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are the result of March credit sales. d. Each month's ending inventory should equal 80% of the following month's budgeted cost of goods sold. e. One-half of a month's inventory purchases is paid for in the month of purchase; the other one-half is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory. f. Monthly expenses are as follows:…
Q4. The cash flow details of a public project is as follows = BD 250000 Initial cost /investment Annual benefits/revenues = BD 120000 Worth of annual cost Salvage value Interest rate per year 8% and useful lie 30 Years Use the three project evaluation methods( PW, FW, AW) = BD 12,000 = BD 150000