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- Six mutually exclusive projects A, B, C, D, E, and F, are being considered by ABC Inc. They all have 20 years of project life and have been ordered by first costs so that project A has the lowest first cost, project F the largest. Specifically, detailed cash flows for Projects A is given below. Project A: Initial Cost of $630,000. annual benefit of $70,000 for 20 years The table below apply to all projects (A through F). The data can be interpreted as follows: the IRR on the incremental investment from project C to D is 11.8%. Which project should be chosen using MARR of 12%? IRR on IRR on Increments of Investment Project overall Compared With Project Investment A В C D E A ? B 11.80% 12.1% 12.50% 13.0% 12.2% 12.30% 12.2% 12.1% 11.8% 7% 9% E 11.00% 14% 11.5% 9.8% 11.20% 10% 11.2% 9.7% 8.50% O Project B O Project C O Project D O Project E O Project F15. You want to open a new business but for the first 3 years you wont make any income as it takes time for the paperwork and approvals to process. After your business is up and running, you will make $75,000 per year forever. What is the capitalized cost of the income at 8% per year? What does the capitalized cost represent in layman terms?Q4. The cash flow details of a public project is as follows Initial cost /investment BD 250000 Annual benefits/revenues = BD 120000 Worth of annual cost BD 12,000 Salvage value = BD 150000 Interest rate per year = 8% and useful lie = 30 Years Use the three project evaluation methods( PW, FW, AW) and put your decision after every solution. Prepare the cash flow diagram.
- Show me the cash flow diagram of the attached problem below.Thank you!For this problem, consider the five mutually exclusive investment alternatives, A through E, with incremental analysis. Do nothing is not an alternative. |A C Capital $55,000 $90,000 $45,000 $30,000 $70,000 investment Annual $30,000 $40,000 $25,000 $15,000 $35,000 expenses Annual $50,000 $52,000 $38,000 $29,000 $45,000 revenues Market value at $10,000 $15,000 $10,000 $11,000 $15,000 ΕΟΥ 10 IRR ??? 7.4% 26.7% 46.0% 9.2% Useful Life in 10 |10 10 10 10 years When applying incremental analysis, the base alternative is identified, and then the first incremental comparison should be which of the following? Assume the MARR=10%. Choose the correct answer below. The first letter is the base alternative and the second letter is the next alternative in the analysis. A. D - C В. Е - D C. E - A D. D - B E. D - AWhat is the excel equation to calculate the values in the selected row exactly as they are?
- A firm has a capital budget of $30,000 and is considering three possible independent projects. Project A has a present outlay of $12,000 and yields $4,231 per annum for 5 years. Project B has a present outlay of $10,000 and yields $4,184 per annum for 5 years. Project C has a present outlay of $17,000 and yields $5,802 per annum for 10 years. Funds which are not allocated to one of the projects can be placed in a bank deposit. Identify seven combinations of project investments and a bank deposits which exhaust the budget. Which of the above combinations should the firm choose when the bank deposit rate is (i) 15% or (ii) 20%? Explain your answer and show your work. Suppose there is no option to deposit in the bank, but the projects are "divisible" (e.g. you may have 25% of project A). Which combination should the firm choose? Explain your answer and show your work. Use 15% as the deposit rate (discount rate).Do not use excel please. Show equations used.As a Shareholder of a Construction firm, it has been decide by the board to purchase a new 18 wheeler truck that is worth $60000. The vehicle will have $18000 annual expenses which will immediately begin a year after purchasing it. Referring to the cash flow diagram below, what will be the net Future Worth of buying the truck ?