Task 4 (Comparison of Alternative Assessments) Galfar Industries is planning to modernize its production facility. The company has identified three different technologies which could help them meet this goal. The cash flows associated with these three technologies are summarized in Table 4. Initial Outlay (RO) | Annual Revenue Expected Project Life (RO) (in years) 9. Technology 1 Technology 2 Technology 3 19000 3230 23000 3220 14 42000 6720 11 Table 4 (c) At an annual interest rate of 9%, evaluate the alternative investments based on annual equivalent method of comparison and select the best technology based on the evaluation. (d) Calculate the rate of return of each of the three technologies and suggest which technology is to be implemented.
Task 4 (Comparison of Alternative Assessments) Galfar Industries is planning to modernize its production facility. The company has identified three different technologies which could help them meet this goal. The cash flows associated with these three technologies are summarized in Table 4. Initial Outlay (RO) | Annual Revenue Expected Project Life (RO) (in years) 9. Technology 1 Technology 2 Technology 3 19000 3230 23000 3220 14 42000 6720 11 Table 4 (c) At an annual interest rate of 9%, evaluate the alternative investments based on annual equivalent method of comparison and select the best technology based on the evaluation. (d) Calculate the rate of return of each of the three technologies and suggest which technology is to be implemented.
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
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T4(c,d)- Please solve this question with all steps required. Many thanks.
Transcribed Image Text:Task 4 (Comparison of Alternative Assessments)
Galfar Industries is planning to modernize its production facility. The company has identified three
different technologies which could help them meet this goal. The cash flows associated with these
three technologies are summarized in Table 4.
Expected Project
Life
(in years)
Initial Outlay (RO) Annual Revenue
(RO)
Technology 1
Technology 2
Technology 3
19000
3230
23000
3220
14
42000
6720
11
Table 4
(c) At an annual interest rate of 9%, evaluate the alternative investments based on annual
equivalent method of comparison and select the best technology based on the evaluation.
(d) Calculate the rate of return of each of the three technologies and suggest which technology
is to be implemented.
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