The Dyson Corporation has recently evaluated a proposal to invest in cost-reducing production technology. According to the evaluation, the project would require an initial investment of $17,166 and would provide equal annual cost savings for five years. Based on a 10 percent discount rate, the project generates a net present value of $1,788. The project is not expected to have any salvage value at the end of its five-year life. Refer to Dyson Corporation. What is the project's expected internal rate of return? Present value tables or a financial calculator are required. Select one: a. 13% b. 11% Ⓒc 10% O d. 14%

The Dyson Corporation has recently evaluated a proposal to invest in cost-reducing production technology. According to the evaluation, the project would require an initial investment of $17,166 and would provide equal annual cost savings for five years. Based on a 10 percent discount rate, the project generates a net present value of $1,788. The project is not expected to have any salvage value at the end of its five-year life. Refer to Dyson Corporation. What is the project's expected internal rate of return? Present value tables or a financial calculator are required. Select one: a. 13% b. 11% Ⓒc 10% O d. 14%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

. Consider the following two mutually exclusive investment projects: Project A Project B -$15,000 -$25,000 $5,000 $14,500 $8,000 $9,000 $5,000 $10,000 $6,000 In 10 1 12 3 Using the least common multiple analysis period, determine the present worth of project A. Assume that i=12% 3. Using the least common multiple analysis period, determine the present worth of project B. . For questions 12 and 13, which project would you select?
Consider a palletizer at a bottling plant that has a first cost of $150,000, operating and maintenance costs of $17,500 per year, and an estimated net salvage value of $25,000 at the end of thirty years. Assume an interest rate of 8%. What is the future equivalent cost of the investment if the planning horizon is thirty years? $3,517,000 $3,371,000 $3,623,000 $3,980,000
J&M Manufacturing plans on purchasing a new assembly machine for $30,000 to automate one of its current manufacturing operations. It will cost an additional $5,500 to have the new machine installed. With the new machine, J&M expects to save $11,000 in annual operating and maintenance costs. The machine will last five years with an expected salvage value of $6,000. a. How long will it take to recover the investment (plus installation cost)? The payback period is _______years. (Round up to the nearest whole number.) b. If J&M's interest rate is known to be 13%, determine the discounted payback period. The discounted payback period is _______years. (Round up to the nearest whole number.)
Give typing answer with explanation and conclusion
Calculating the IRR for Project Long Project Long is expected to provide five years of cash inflows and to require an initial investment of $100,000. The required rate of return or discount rate that is appropriate for valuing the cash flows of Project Long is 17 percent. What is Project Long's IRR, and is it a good investment opportunity?
Crazy Racoon is now considering another bond issue that would settle on June 30, 2020 and mature in 30 years. Because the company wants to limit interest payments it has decided, along with the investment bankers, to issue the bond with a low 3.00% coupon even though the market will demand a 6.00% yield to maturity on the bond. Assuming semiannual interest (2 coupons per year) Crazy Racoon has an old bond trading in the secondary market with a low 3.0% coupon. This bond had been issued during a period of very low interest rates at a par value of 100.00 (which means the full $1,000.00 face value of the bond). It pays interest semiannually. Assume the date is June 30, 2020 and the maturity date of the bond is June 30, 2030. If the bond is trading at 77.00 (= $770.00 per $1,000.00 bond) what is the Yield to Maturity (YTM) of the bond? Settlement date 06/30/20 Maturity date Annual coupon rate Bond price (flat) Redemption value as % of par value Number of coupons per year 06/30/30 YIELD TO…
Covington Corporation purchased a vibratory finishing machine for $20,000 in year 0. The useful life of the machine is 10 years, at the end of which the machine is estimated to have a salvage value of zero. The machine generates net annual revenues of $6,000. The annual operating and maintenance expenses are estimated to be $800. If Covington's MARR is 16%, how many years will it take before this machine becomes profitable? Assume that the cash flows occur continuously throughout the year. It will take years before this machine becomes profitable. (Round to one decimal place.)
You are the owner of a large data-services firm and are deciding on the purchase of a new hardwarecooling system that you expect will yield $233,300 in cost-savings per year for the next 15 years. Theinstallation of this cooling system will cost $3,000,000. Additionally, O&M expenditures for the collingsystem are expected to be $2,120 per year. use excel to solve 1. At face value, does this system seem profitable? By how much?2. Assume that your company uses a discount rate of 6%.a. What is the Net Present Value (NPV) of this project?b. How does the NPV of this project change as you assume a higher or lower discountrate? Why?