Sheridan Company is considering a long-term investment project called ZIP. ZIP will require an investment of $129,600. It will have auseful life of 4 years and no salvage value. Annual cash inflows would increase by $86,400, and annual cash outflows would increase by$43,200. The company's required rate of return is 12%. Click here to view the factor table.Calculate the internal rate of return on this project. (Round answers to O decimal places, e.g. 15%)Internal rate of return on this project is betweenDetermine whether this project should be accepted?The projectbe accepted.% and%

Calculating Internal Rate of Return (IRR)To find the IRR of a project, we need the discount rate…

Answered: Sheridan Company is considering a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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# 3 QUESTION 10 Suppose the MARR is 5%. Use the following table to answer the question-Which option should be selected as the base alternative? Initial Investment Annual Revenue Useful Life (Years) E D $ 4 R CMS A. Neither option is acceptable as a base alternative. OB. Both options are acceptable base alternatives. OC. FMS OD. I'm completely lost! E. CMS F Click Save and Submit to save and submit. Click Save All Answers to save all answers. 888 74 $31,000 $38,000 6,866 % FMS 5 T 9,201 G 6 MacBook FO H & 7 F7 U +00 8 J 9 K Save All Answers P 7.
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Give typing answer with explanation and conclusion A small company purchased now for $120,000 will lose $300 each year for the first four years. An additional $600 in the company in the fourth year will result in a profit of $9500 each year from the fifth through the twelfth year. At the end of 12 years, the company can be sold for $135,000. a) Draw the cash flow diagram b) Determine the IRR for this project. c) Calculate the FW if MARR is 5%. d) Calculate the ERR when ε = 7%.
(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
A labor saving device system save $2,000 per year for five (5) years. It can be installed at a cost of $8,000. The rate of return on this planned investment is most nearly: a.9.36% b.10% c.10.36% d.12.36%
XYZ Inc is looking at a project to manufacture widgets. Assume we have the following data: • The initial cost of the project is $1,080,000. • The project is expected to last 7 years, at which time the project will be abandon. • Assume each widget will cost $8.00 each to produce and the selling price will be $12.00. Production fixed costs are expected to be $248,400 annually. • The company has computed that the PVCCATS associated with this project will be $237,600. Also, the company uses a discount rate of 9% for capital projects and XYZ pays tax at a rate of 10%. XYZ is unsure as to how many widgets they will sell annually. The marketing department has provided that the expected number of units sold annually, N is E(N) = 128,000 units with a standard deviation of o= = 21,000 units. (a) Compute the expected NPV, E(NPV) of this project. 数字 (b) Compute the standard deviation of the NPV of this project. 数字 (c) Compute the NPV breakeven point of this project. 数字 units. (d) Based on the…
Q2: A warehouse can be built with an initial cost of $60000, which may last for 20 years with annual revenues of $5000 and a salvage value of $30000. Calculate the rate of return on this investment. (Try i 5% and 10%).

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