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QI\ a contractor want to invest his money in one of projects A or B if you know that the interest rate is 10%, choose the best alemative A or B using net present worth method ? Initial Investment 120,000 CU 135,000 CU Annual revenue Annual expenses Salvage vahie Project life Cost of machines replaced every 3 years 15,000 CU'year 10,000 CU year 12,000 CU 12 years 3000 CU 17,000 CU year 11,000 CU year 20,000 CU 6 усars 3500 CU

QI\ a contractor want to invest his money in one of projects A or B if you know that the interest rate is 10%, choose the best alemative A or B using net present worth method ? Initial Investment 120,000 CU 135,000 CU Annual revenue Annual expenses Salvage vahie Project life Cost of machines replaced every 3 years 15,000 CU'year 10,000 CU year 12,000 CU 12 years 3000 CU 17,000 CU year 11,000 CU year 20,000 CU 6 усars 3500 CU

Essentials Of Investments
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
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QI\ a contractor want to invest his money in one of projects A or B if you know that the interest rate is 10%, choose the best altemative A or B using net present worth method ? A. B. Initial Investment 120,000 CU 135,000 CU Annual revenue Annual expenses Salvage vahie |Project life Cost of machines replaced every 3 years 15,000 CU\year 10,000 CU year 12,000 CU 12 years 17,000 CU year 11,000 CU year 20,000 CU 6 усars 3500 CU 3000 CU Q2 A company is planning to purchase a new equipment to increase the production and revemies. The cost of the equipment is 451105 CU and the equipment installation cost is 17% of its cost. Find the payback period for this equipment Year 1 Year 2 120,000 CU 130,000 CU 90,000 CU Year 3 Year 4 |100,000 CU Year 5 115,000 CU 90,000 CU Year 6 Q3 \ Machinery costs (60000 CU) and its useful life is (5 year). compute the schedule of depreciation and book value at the end of each year for the machinery by using the Sum of Year Digit method , if you know that the depreciation value for the frst year is (15000 CU). Q4) A company is planning to expand its production operations, it has two alternatives which has the cash flow as represent in the tabe below, suggest the best Project using the Equivalent Annual worth Method if you know that the interest rate is (14%). equipment's Installation Salvage Details expenses Life revenue value (CU) cost cost (CU) (CU) (CU/year) (CU/year) (year) Project 1 Project 2 All projects need a maintenance for some machines every three years which equals to 100 000 cu for both projects. There is a revenue in the 3rd year of project 2 equal to 250 000 CU There is a revenue in the 4th year of 2,200,000 400,000 400,000 100,000 300,000 1,900,000 300,000 620,000 150,000 500,000 3 project 1 equal to 170 000 CU.
Transcribed Image Text:QI\ a contractor want to invest his money in one of projects A or B if you know that the interest rate is 10%, choose the best altemative A or B using net present worth method ? A. B. Initial Investment 120,000 CU 135,000 CU Annual revenue Annual expenses Salvage vahie |Project life Cost of machines replaced every 3 years 15,000 CU\year 10,000 CU year 12,000 CU 12 years 17,000 CU year 11,000 CU year 20,000 CU 6 усars 3500 CU 3000 CU Q2 A company is planning to purchase a new equipment to increase the production and revemies. The cost of the equipment is 451105 CU and the equipment installation cost is 17% of its cost. Find the payback period for this equipment Year 1 Year 2 120,000 CU 130,000 CU 90,000 CU Year 3 Year 4 |100,000 CU Year 5 115,000 CU 90,000 CU Year 6 Q3 \ Machinery costs (60000 CU) and its useful life is (5 year). compute the schedule of depreciation and book value at the end of each year for the machinery by using the Sum of Year Digit method , if you know that the depreciation value for the frst year is (15000 CU). Q4) A company is planning to expand its production operations, it has two alternatives which has the cash flow as represent in the tabe below, suggest the best Project using the Equivalent Annual worth Method if you know that the interest rate is (14%). equipment's Installation Salvage Details expenses Life revenue value (CU) cost cost (CU) (CU) (CU/year) (CU/year) (year) Project 1 Project 2 All projects need a maintenance for some machines every three years which equals to 100 000 cu for both projects. There is a revenue in the 3rd year of project 2 equal to 250 000 CU There is a revenue in the 4th year of 2,200,000 400,000 400,000 100,000 300,000 1,900,000 300,000 620,000 150,000 500,000 3 project 1 equal to 170 000 CU.
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