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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Compute the payback statistic for Project A if the appropriate cost of capital is 7 percent and the maximum allowable payback period is four years. (Round your answer to 2 decimal places.) Project A Time: 0 1 2 3 4 5 Cash flow: −$2,300 $870 $870 $780 $560 $360
A project that provides annual cash flows of $20,000 for 6 years costs $63,000 today. Determine the IRR for this project. Show answer using excel function.
Benefits in in the first year are estimated to be $30,000 and these benefits are estimated to increase by 13% per year. Construct cash flow table and determine the net present value/worth of the project, NPW.
What is the annual equivalent cost of purchasing a lift truck that has an initial cost of $85,000, an annual operating cost of $13,500, and an estimated salvage value of $23,000 after six years of use at an annual interest rate of 6%? X More Info Equal Payment Series Single Payment Compound Present Amount Worth Compound Amount Factor (F/A, I, N) Sinking Present Fund Worth Factor Factor Capital Recovery Factor (A/P, i, N) Factor Factor (F/P, i, N) (P/F, i, N) (A/F, i, N) (P/A, i, N) 1.0800 0.9434 1.0000 1.0000 0.9434 1.0800 1.1238 0.8900 2.0800 0.4854 1.8334 0.5454 1.1910 0.8396 3.1836 0.3141 2.6730 0.3741 1.2625 0.7921 4.3746 0.2288 3.4861 0.2886 1.3382 0.7473 5.6371 0.1774 4.2124 0.2374 1.4185 0.7050 6.9753 0.1434 4.9173 0.2034 0.6851 8.3938 0.1191 5.5824 0.1791 1.5038 1.5938 1.6895 0.6274 9.8975 0.1010 6.2098 0.1610 0.5919 11.4913 0.0870 6.8017 0.1470 1.7908 0.5584 13.1808 0.0759 7.3801 0.1359 SAWNIN 1 2 3 4 5 67899 10
Compare the projects below using future worth analysis at i=16% per year. Apply LCM method, Write formula, use compound interest table for extracting factors, show your calculation step by step, and find final result. Draw cash flow diagram for both projects Project 1 Project 2 First cost Annual operating cost Salvage value Life, years -9000 -8000 -800 -800 700 1000 5 10
what is the NPV of the new construction equipment? Initial cost = $100k, Salvage Value in 6 yrs = $25K, Increase Yearly Net Sales = $25k, Bank Rate = 10%
(IRR calculation) Determine the IRR on the following projects: a. An initial outlay of $13,000 resulting in a single free cash flow of $17,207 after 7 years b. An initial outlay of $13,000 resulting in a single free cash flow of $47,031 after 14 years c. An initial outlay of $13,000 resulting in a single free cash flow of $110,851 after 23 years d. An initial outlay of $13,000 resulting in a single free cash flow of $13,624 after 4 years a. What is the IRR of a project with an initial outlay of $13,000 resulting in a single free cash flow of $17,207 after 7 years? % (Round to two decimal places.)
A company that manufactures magnetic flow meters expects to undertake a project that will have the cash flows estimated. First cost, $ -810,000 Equipment replacement cost in year 2, $ -300,000 Annual operating cost, $/year Salvage value, $ Life, years -860,000 250.000 4 an interest rate of 10% per year, what is the equivalent annual cost of the project? Find the AW value using tabulated factors. e equivalent annual cost of the project is $-820000
(IRR calculation) Determine the IRR on the following projects: a. An initial outlay of $11,000 resulting in a single free cash flow of $16,992 after 9 years b. An initial outlay of $11,000 resulting in a single free cash flow of $53,871 after 14 years c. An initial outlay of $11,000 resulting in a single free cash flow of $110,943 after 24 years d. An initial outlay of $11,000 resulting in a single free cash flow of $13,692 after 5 years a. What is the IRR of a project with an initial outlay of $11,000 resulting in a single free cash flow of $16,992 after 9 years? % (Round to two decimal places.)
The engineers at a design firm have been tapped by an amusement park to design a water sportsride. The construction of the ride costs P800,000 and will last 6 years. The maintenance of the ridewill commence after a year of construction and will cost P17,000, increasing 11% per yearthereafter. The interest is 8% annually. Determine:(a) Total present worth of the construction and maintenance cost(b) Construct the equivalent cash flow diagram
A project will require an initial outlay of $2000 and will result in the following cash inflows in the years shown. If the cost of capital is 3%, what is the NPV of the project? a. $321 Ob. $388 O c. $318 O d. $460 Year 2 Cash Flow $770 $880 $810
Green Day Corp. has a project with the following cash flows: Year Cash FlowS 0 -$25,400 1 9,750 2 234 13,900 8,760 4 -2,800 What is the MIRR for this project using the reinvestment approach? The interest rate is 7 percent

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