There is an alternative for a construction machine. This alternative requires an investment of 128*10* TL. The economic life of the project is N years. The discount rate is % i. It is estimated that annual maintenance costs will be 35*10° TL in the first half of its economic life and 45*10“ TL in the other half. The expected benefit of this alternative becomes 20*10ª TL with a linear increase at the end of the first 10 years and continues as 25*10* until the end of its economic life. The scrap value after the useful life is 115*10ʻ TL. Find out whether it is profitable by finding the benefit / cost ratio with future value analysis for this machine.
There is an alternative for a construction machine. This alternative requires an investment of 128*10* TL. The economic life of the project is N years. The discount rate is % i. It is estimated that annual maintenance costs will be 35*10° TL in the first half of its economic life and 45*10“ TL in the other half. The expected benefit of this alternative becomes 20*10ª TL with a linear increase at the end of the first 10 years and continues as 25*10* until the end of its economic life. The scrap value after the useful life is 115*10ʻ TL. Find out whether it is profitable by finding the benefit / cost ratio with future value analysis for this machine.
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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N=50 i (%)=5
![There is an alternative for a construction machine. This alternative requires an investment of 128*10* TL. The
economic life of the project is N years. The discount rate is % i. It is estimated that annual maintenance costs will
be 35*10° TL in the first half of its economic life and 45*10ª TL in the other half. The expected benefit of this
alternative becomes 20*10ª TL with a linear increase at the end of the first 10 years and continues as 25*10“ until
the end of its economic life. The scrap value after the useful life is 115*10“ TL. Find out whether it is profitable by
finding the benefit / cost ratio with future value analysis for this machine.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc10c80f9-1931-4922-8bcb-4e59c42fe3ad%2F3dab70d8-16c0-4e65-a8e6-aa11f8d57057%2F0iz9iz_processed.png&w=3840&q=75)
Transcribed Image Text:There is an alternative for a construction machine. This alternative requires an investment of 128*10* TL. The
economic life of the project is N years. The discount rate is % i. It is estimated that annual maintenance costs will
be 35*10° TL in the first half of its economic life and 45*10ª TL in the other half. The expected benefit of this
alternative becomes 20*10ª TL with a linear increase at the end of the first 10 years and continues as 25*10“ until
the end of its economic life. The scrap value after the useful life is 115*10“ TL. Find out whether it is profitable by
finding the benefit / cost ratio with future value analysis for this machine.
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