The government intends to build a sports center at a total cost of P250,000,000. The project will be financed by a foreign loan with an interest rate of 3% per year. The total annual cost for operating the facility would total P15,000,000. Annual revenues and benefits are estimated to be P45,000,000. If the structure is expected to last 40 years with no salvage value, calculate the following based on the equivalent uniform annual cost (EUAC) method: a. how much is the annual benefit of the project (in Php)? b. how much is the annual cost of the project (in Php)? c. what is the benefit cost ratio of the project?

The government intends to build a sports center at a total cost of P250,000,000. The project will be financed by a foreign loan with an interest rate of 3% per year. The total annual cost for operating the facility would total P15,000,000. Annual revenues and benefits are estimated to be P45,000,000. If the structure is expected to last 40 years with no salvage value, calculate the following based on the equivalent uniform annual cost (EUAC) method: a. how much is the annual benefit of the project (in Php)? b. how much is the annual cost of the project (in Php)? c. what is the benefit cost ratio of the project?

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Description: The government intends to build a sports center at a total cost of P250,000,000. The project will be financed by a foreign loan with an interest rate of3% per year. The total annual cost for operating the facility would total P15,000,000. Annual rev

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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Stenson, Inc., imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. Cash Flow(A) -$ 54,000 21,500 28,400 23,500 9,500 Cash Flow(B) -$ 99,000 23,500 28,500 30,500 241.000 Year What is the payback period for each project? Project A years Project B years Which, if either, project(s) should the company accept? -234
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The Bank of China is considering an application from the Government of the Republic of Zambia for a large dam project. Some costs and benefits of the project (in Kwacha values) are as follows: Construction costs: K500 million per year for three years Operating costs: K50 million per year Hydropower to be generated: 3 billion kilowatt hours per year Price of electricity: K0.05 per kilowatt hour Irrigation water available from dam: 5 billion liters per year Price of irrigation water: K0.02 per liter Agricultural product lost from flooded lands: K45 million per year Forest products lost from flooded lands: K20 million per year Assume that the project incurs no ecological and other costs besides the ones stated above. Do a formal cost-benefit analysis encompassing all of the quantifiable factors listed above. Assume that the lifespan of the dam is 10 years and that construction begins in Year 0. All other impacts start once the dam is completed and continue for 10 years. Use 5%…
Kara, Incorporated, imposes a payback cutoff of three years for its international investment projects. Assume the company has the following two projects available. Year Cash Flow (A) -$ 59,000 Cash Flow (B) 01234 24,000 31,400 26,000 12,000 -$ 104,000 26,000 31,000 28,000 236,000 a. What is the payback period for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b. Which, if either, of the projects should the company accept? a. Project A years Project B years b. Project acceptance Accept Project A and reject Project B
A project requires an initial investment of $322,990 and its expected life is 7 years. Net operating income from the project is expected to be $28,100 each year, including depreciation of $42,270. The salvage value of the assets is expected to be $27,100 at the end of the life of the project. Ignoring income taxes, the payback period is: (Round your answer to 2 decimal places.) Payback period years
For this investment, an initial amount of $25,000 should be paid this year (t=0). As of next year (t=1), five equal payments of $20,000 should also be paid (i.e., from t=1 to t=5). Thus, the sum of the required investment expenditure over those periods is $125,000. How much is the sum of the present value of the required investment expenditure over those periods, assuming that the annual interest rate is 5%?
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turkish govermnet is now planning to initiate a national budget savings program to construct "canal istanbul". Auction will be announced just after 5 yeras from now. Consortiums, each made up of 3 foreinngs and 2 national construction companies willbe allowed to participate in the auction process. As the construction begins, canal is expected to be complete in 4 years. Currently the anual construction cost for everthing is 15 billion tl, but these cost are expected to increase by 5 percent anually. after the auction process is complete the winning constrium will require that this amaount be paid at the start of the year. Public bank X will be responsible for all transactions and payments. Turkish teasury now has 7.50 billion tl in this bank account that pays 6 percent annually. Govermnet must save annual deposite in this bank from its regular annual taxes. the govermnet must make 6 equal annual deposite into this account, the 1st deposite today and the 6th on the day when construction…

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