The cost data for two projects are given below.(a) Draw the cashflow diagram of Project 1.(b) Determine the better alternative using the annual cash flow analysis.Project 1 Project 2$200,000 $180,00024,000Initial costNet Annual Benefit 30,000Salvage valueLife in years45,00020,0001310MARR6%

Net present value The variance of the cash inflows (PV) and cash outflows (PV) over time.

The cost data for two projects are given below. (a) Draw the cashflow diagram of Project 1. (b) Determine the better alternative using the annual cash flow analysis. Initial cost Net Annual Benefit 30,000 Salvage value Life in years MARR Project 1 Project 2 $200,000 $180,000 24,000 20,000 45,000 10 13 6%

The cost data for two projects are given below. (a) Draw the cashflow diagram of Project 1. (b) Determine the better alternative using the annual cash flow analysis. Initial cost Net Annual Benefit 30,000 Salvage value Life in years MARR Project 1 Project 2 $200,000 $180,000 24,000 20,000 45,000 10 13 6%

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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Two anti-pollution project proposals are being considered by Energon Industries. The expected cash w we flows are as follows: End of Year Project 1 Project 2 - P3.5M - P4.5M 1 - 0.25M -0.125M - 0.375M -0.25M - 0.5M - 0.375M 4 - 0.625M -0.5M 5 - 1.55M -0.625M Using the incremental investment approach and a 12% MARR, determine the better alternative (Ans. i2-1 = 9.17%; select Project 1) 3.
3:Consider the following financial data for a project. 2- Find the (ROR) for the project.. We jus المصرر AP 1 = 10) b- If the the expense will increase by 10%, find the annual revenue that will make (POR-10%) Initial investment 18 000 CU Annual revenue 5000 CU Annual expense 3000 CU Salvage value 4500 CU Project life 12 YEARS
Harris Corporation has provided the following data concerning an investment project that it is considering: Initial investment Annual cash flow Salvage value at the end of the project Expected life of the project Discount rate $ 160,000 $ 54,000 $ 11,000 O $67,000 O $160,516 O $516 O $(5,776) 4 15 per year years % Use Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the project is closest to:
Compute the project cost. Gross income 1,000,000 Life of project Operating cost Rate of project 500,000 5 years 20% Benefit ratio 1.08 O a. P1,384,543.00 O b. P1,348,543.00 O c. P1,384,534.00 O d. P1,384,453.00
Q1: For the machines indicated below. Consider i= 10% per year First cost Annual cost Salvage value Life duration Machine A 20,000 $ 5,000 $ 7,500 $ 3 Machine B 25,000 4,000 6,000 4 A- Draw cash flow diagram for each machine for one cycle of each project B- Draw cash flow diagram for each project considering the LCM life cycle (Hint: different project duration, need to have the LCM life cycle) C- Compare the machines to select best alternative one based on Present worth analysis method D- Repeat part B considering Future worth analysis
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Coffer Company is analyzing two potential investments. Project X Cost of machine Net cash flow: Year 1 Year 2 $ 85,470 Project Y $ 65,000 33,000 33,000 3,000 30,000 Year 3 Year 4 33,000 0 • 30,000 25,000 If the company is using the payback period méthod, and it requires a payback period of three years or less, which project(s) should be selected? Multiple Choice Project Y. Project X. Both X and Y are acceptable projects. Neither X nor Y is an acceptable project.
You are considering the following project. What is the NPV of the project? WACC of the project: 0.10 Revenue growth rate: 0.05 Tax rate: 0.40 Revenue for year 1: 13,000 Fixed costs for year 1: 3,000 variable costs (% of revenue): 0.30 project life: 3 years Economic life of equipment: 3 years Cost of equipment: 20,000 Salvage value of equipment: 4,000 Initial investment in net working capital: 2,000
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Compute the NPV based on the following data Life of project 10.00 year Required Investment 500,000.00 Required Rate of Return 8% Required Working Capital to be released at the end of the project 35,000.00 Salvage value of equipment at end of year 10 12,000.00 Required overhaul in year 5 60,000.00 Annual increase in net income for this project 85,000.00 Year Cash flow 0 1 2 3 4 5 6 7 8 9 10 Net Present Value IRR Should we accept this project:?

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