Shown in the table are the cash flows for 4 water treatment systems that are to be compared at a MARR of 8% per year. Determine the savings between the alternative to be selected and the next one. Life n, years Capital Investment, $ Salvage Value, 15,000 4 175,000 12 450,000 3 150,000 250,000 5,000 30,500 Revenue, $ 60,000 60,500 65,000 75,000

Shown in the table are the cash flows for 4 water treatment systems that are to be compared at a MARR of 8% per year. Determine the savings between the alternative to be selected and the next one. Life n, years Capital Investment, $ Salvage Value, 15,000 4 175,000 12 450,000 3 150,000 250,000 5,000 30,500 Revenue, $ 60,000 60,500 65,000 75,000

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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Draw a 5-year cash flow diagram representing the following cash flows to build springs: (Chapter 2) Initial investment in plant and equipment $50K Answer: Annual maintenance: $3K after year 1 and increasing $1K per year after that Answer: Annual production costs – $10K/year Answer: Annual revenue - $25K/year Answer:
A project has estimated annual net cash flows of $57, 600. It is estimated to cost $288,000. Determine the cash payback period. Round the answer to one decimal place. years
Given the following, calculate the project's cash flows, NPV, and IRR. Initial investment $325,000 Expected life is 5 years First Year Revenues: 145,000 First-Year Expenses: $65,000 • Growth for revenue and expenses: 4.5 percent per year Straight Line Depreciation over 5 years Salvage Value: $50,000 One-time net working capital investment of $10,000 is required at the start of the project and will be recovered at project end The tax rate is 34 percent The risk-free rate is 4 percent Beta is 1.1 • The expected market return is 8 percent Answer the following: ● ● ● ● ● ● ● ● ● What are the cash flows for each year? What is the NPV? What is the IRR?
ABC Company Limited looking to invest in one of the proposed projects. The cost of that project is $50,000 and cash inflows and outflows are projected for 5 years, as shown in the below table. Calculate the Profitability Index of the Project using the given interest rate and 8%. The interest rate is 5%. Years Cash Inflows Cash Outflows 0 (50,000.00) 1 20,000.00 5,000.00 2 14,000.00 2,000.00 3 12,000.00 2,000.00 4 12,000.00 2,000.00 5 15,000.00 1,000.00 Net Present Value
please answer all
ILLUSTRATE THE CASHFLOW DIAGRAM FOR PLAN R AND PLAN S A utility company is considering the following plans to provide a certain service required by resent demand and the respective growth of demand for the coming 18 years. Plan R requires an immediate investment of 500,000 in property that has an estimated life of 18 years and with 20% terminal salvage value. Annual disbursements for operation and maintenance will be 50,000. Annual property taxes will be 2% of the first cost. Plan S requires an immediate investment of 300,000 in property that has an estimated life of 18 years with 20% terminal salvage value. Annual disbursements for its operation and maintenance during the first 6 years will be 40,000. After 6 years, an additional investment of 400,000 will be required having an estimated life of 12 years with 40% terminal salvage value. After this additional property is installed, annual disbursements for operation and maintenance of the combined property will be 60,000. Annual…
A small company wants to invest in Project A or B. The cash flows for both are shown below. Determine the payback period for each project assuming a MARR of 5% and suggest which project should be selected based on discounted payback period analysis.
Consider two air-conditioning systems with the cash flow estimates as given below. Use AW analysis to determine the sensitivity of the economic decision to MARR values of 4%, 6%, and 8% per year. Air-Conditioning System 1 System First cost, $ AOC, $ per year Salvage value, $ New compressor and motor cost at midlife, $ Life, years -10,000 -500 -100 -1,850 8 The annual worth of air-conditioning system 1 when the MARR is 4% is $ The annual worth of air-conditioning system 2 when the MARR is 4% is $ The annual worth of air-conditioning system 1 when the MARR is 6% is $ The annual worth of air-conditioning system 2 when the MARR is 6% is $ The annual worth of air-conditioning system 1 when the MARR is 8% is $ The annual worth of air-conditioning system 2 when the MARR is 8% is $ Air-Conditioning System 2 -14,000 -85 -300 -2,540 12
Duo Corporation is evaluating a project with the following cash flows: Year Cash Flow 0 −$ 29,800 1 12,000 2 14,700 3 16,600 4 13,700 5 −10,200 The company uses an interest rate of 9 percent on all of its projects. Calculate the MIRR of the project using the reinvestment approach Calculate the MIRR of the project using the combination approach.
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company investment on a machine costing of P40,000 and has a life of 5 years. Yearly cash inflows are as follows: Year 1-P18,000; Year 2-P12,000; Year 3-P10,000; Year 4-P9,000; and Year 5-P6,000. Calculate Net present value at 10% and PI. Will the company accept or reject the project? Complete the table below. 2. A Year Cash flows PV Factor @10% PV 2. 4 Total PV Less-investment Net Present Value PI=
I will rate. Solve correctly and show all works.

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