Street lighting fixtures and their sodium vapor bulbs for a two-block area of a large city need to be installed at a first cost(investment cost) of $140,000. Annual maintenance expenses are expected to be $6,600 for the first 5 years and$9,500 each year thereafter upto 30 years. With an interest rate of 6% per year, what is the present worth cost of thisproject?Choose the closest answer below.A. The present worth cost of the project is $298,567.B. The present worth cost of the project is $258,550.C. The present worth cost of the project is $289,243.D. The present worth cost of the project is $361,614.

Present worth The present value method refers to calculating the present value of future cash. The…

Answered: Street lighting fixtures and their…

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

See similar textbooks

Similar questions

As a financial analyst, you must evaluate a proposed project to produce printer cartridges. The purchase price of the equipment, including installation, is $65,000, and the equipment will be fully depreciated at t = 0. Annual sales would be 4,000 units at a price of $50 per cartridge, and the project's life would be 3 years. Current assets would increase by $5,000 and payables by $3,000. At the end of 3 years, the equipment could be sold for $10,000. Variable costs would be 70% of sales revenues, fixed costs would be $30,000 per year, the marginal tax rate is 25%, and the corporate WACE is 11%. The firm's project CVs generally range from 1.0 to 1.5. A 3% risk premium is added to the WACC if the initial CV exceeds 1.5, and the WACC is reduced by 0.5% if the CV is 0.75 or less. Then a revised NPV is calculated. What are the revised values for standard deviation, and coefficient of variation? • Standard deviation of NPV = $ • Coefficient of variation of NPV =
The James Company is considering an investment with a cost today of $1,500,000 and which will produce the following net inflows: Year 1 600,000 Year 2 300,000 Year 3 200,000 Year 4 400,000 Year 5 500,000 What is the Payback Period for the investment?
Carla Vista's Hair Salon is considering opening a new location in French Lick, California. The cost of building a new salon is $300,000. A new salon will normally generate annual revenues of $64,570, with annual expenses (including depreciation) of $40,000. At the end of 15 years, the salon will have a salvage value of $78,000. Calculate the annual rate of return on the project. Annual rate of return %
A construction firm is considering establishing an engineering computing center. The center will be equipped with three engineering workstations that cost $45,000 each, and each has a service life of five years. The expected salvage value of each workstation is $2,000. The annual operating and maintenance cost would be $25,000 for each workstation. At a MARR of 15%, determine the equivalent annual cost for operating the engineering center. Click the icon to view the interest factors for discrete compounding when MARR= 15% per year. C The equivalent annual cost is $thousand. (Round to the nearest whole number.) More Info Worth Single Payment Compound Present Amount Factor (F/P, i, N) 1.1500 Compound Amount Factor (F/A, i, N) Factor (P/F, i, N) 0.8896 1.0000 1.3225 0.7561 2.1500 1.5209 0.6575 3.4725 0.5718 4.9934 1.7490 2.0114 0.4972 6.7424 0.4323 8.7537 0.3759 11.0688 2.3131 2.6800 3.0590 3.5179 0.3269 13.7268 0.2843 16.7858 4.0456 0.2472 20.3037 SAWNIN 2 3 4 5 67899 10 Equal Payment…
Management of Crane Home Furnishings is considering acquiring a new machine that can create customized window treatments. The equipment will cost $209,550 and will generate cash flows of $83,750 over each of the next six years. If the cost of capital is 11 percent, what is the MIRR on this project?
big Steve's, makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $105,000 and will generate net cash inflows of $20,000 per year for 9 years. What is the project's NPV using a discount rate of 7 percent? Should the project be accepted? Why or why not? b. What is the project's NPV using a discount rate of 13 percent? Should the project be accepted? Why or why not? c. What is this project's internal rate of return? Should the project be accepted? Why or why not?
If a garden center is considering the purchase of a new tractor with an initial investment cost of $113,000, and the center expects a return of $32,000 in year one, $19,000 in years two and three, $17,000 in years four and five, and $9,000 in year six and beyond, what is the payback period? years
(Net present value calculation) Big Steve's, makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $105,000 and will generate net cash inflows of $21,000 per year for 8 years. a. What is the project's NPV using a discount rate of 8 percent? Should the project be accepted? Why or why not? b. What is the project's NPV using a discount rate of 16 percent? Should the project be accepted? Why or why not? c. What is this project's internal rate of return? Should the project be accepted? Why or why not? a. If the discount rate is 8 percent, then the project's NPV is $ (Round to the nearest dollar.)
Consider an investment project in which you invest $3,500 today in order to receive $525 at the end of each of the next 10 years. If the cost of capital is 12% per year, what is the IRR and should the project be accepted? 7.23%, accept project 7.23%, reject project 5.28%, accept project 5.28%, reject project 8.14%, reject project 8.14%, accept project a. b. C. d. e. O f.
Need a little help with this one
A beautiful bridge is being built over the river that runs through a major city in your state. The cost of the bridge is estimated at $600 million. Annual costs of the bridge will be $200,000, and the bridge is estimated to last a very long time. If accountants in city hall use 3% as the interest rate for analysis, what is the annualized cost of the bridge project? Choose the closest answer. O $20,000 million O $18 million O $18.2 million O $219,500 million O $600 million O $200,000
Assume that it costs $1,000 to start a project. If the project will give $400 profit in the first year, $500 in the second year and $300 in the third year. find the payback period. Now assume that the interest rate is 10%, find the net present value (NPV) and the profitability index (PI) for this project

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS