Two mutually exclusive investment altematives for inmplementing an office automation plan in an engineering design firm are being considem firm's MARR is 10% per year, which alternative should be selected? Compare the altematives shown below on the basis of Incremental Analysis. Investment A Investment B Capital Investment, S Annual Expenses, S/ yr. 920.000 660,000 167,000 133,000 Salvage value, S 410,000 330,000 Life, years 10 10 Determine IRR on incremental analysis, using 79% and 13% rates. Ob 11.1% 10.9% Od..0%

Two mutually exclusive investment altematives for inmplementing an office automation plan in an engineering design firm are being considem firm's MARR is 10% per year, which alternative should be selected? Compare the altematives shown below on the basis of Incremental Analysis. Investment A Investment B Capital Investment, S Annual Expenses, S/ yr. 920.000 660,000 167,000 133,000 Salvage value, S 410,000 330,000 Life, years 10 10 Determine IRR on incremental analysis, using 79% and 13% rates. Ob 11.1% 10.9% Od..0%

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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In planning the establishment of MOCAF flour mill facilities there are several alternatives as follows: (x Rp million,-) Alternative I Alternative Il Alternative III Initial investment 4.000 6 200 Annual net receipts 800 1260 Final score 0 400 Economic age 10 years. 10 years If the MARR is 12% per year, look for the best alternative with the method: a. Net Present Value b. IRR 7 600 1 500 600 10 years
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NPV and maximum return A firm can purchase new equipment for $25,000 that generates an annual cash inflow of $8,000 for 5 years. a. Determine the net present value (NPV) of the asset, assuming that the firm has a cost of capital of 15%. Is the project acceptable? b. Determine the maximum required rate of return that the firm can have and still accept the asset. a. The net present value (NPV) of the new equipment is (Round to the nearest cent.)
Calculations to determine which – if any – additional investment opportunities should be undertaken. 1. If the projects are divisible 2. If the projects are not divisible .
Economics
NOT GRADED Excess Present Value Index and Average Rate of ReturnHighpoint Company is evaluating five different capital expenditure proposals. The company's hurdle rate for net present value analyses is 12%. A 10% salvage value is expected from each of the investments. Information on the five proposals is as follows: Proposal Required Investment PV at 12% of After-Tax Cash Flows Avg. Annual Net Income from Investment A $265,000 $305,030 $37,400 B 195,000 231,780 26,000 C 155,000 168,040 19,200 D 175,000 211,300 27,600 E 123,000 131,990 14,960 a. Compute the excess present value index for each of the five proposals.Round answers to three decimal places. Proposal Excess PV Index A Answer B Answer C Answer D Answer E Answer b. Compute the average rate of return for each of the five proposals.Round answers to one decimal place. For example, 0.4567 equals 45.7% Proposal Avg. Rate of Return A Answer B Answer C…
For the following table, assume a MARR of 9% per year and a useful life for each alternative of six years that equals the study period the ior from least capital investment to greatest capital investment is Do nothing A C. B.Complete the IRR analysis by selecting the preferred Do nothing vs A A vs C A vs B Capital investment -$15,000 -%$2,000 -$3,000 O aB Annual Revenues $4,000 $900 $460 Annual costs -S1,000 Ob. Do nothing -S160 $100 Morket value $6.000 -%$2,200 $3,350 Occ RR 12.7% 10.9% OdA
ENGINEERING ECONOMY A construction project has an initial investment of BD 80,000 and returns BD 25,000 per annum, for 5 years. At a 12% MARR, is this a profitable investment? Use present worth method.
Hello can you show how this was done, i cant figure out the isolation of P was done. the first is the task and the second has the solution also, but i cant figure out how it was done P = 6.06%
Please show calcualtons, (Excel or long hand): 13) Develop a cash flow worksheet based on the following information, initial investment = 500,000, 5-year property, variable costs = 54%, fixed costs 70,000 per year, sales yr 1 = 300,000 yr 2 = 500,000, yr 3 = 750,000, yr 4 = 550,000, yr 5 = 250,000 tax rate = 21%
Investment cost twenty thousand dollars, annual income (gain) 8000 dollars / year, duration 5 years; salvage value 3000 dollars, annual expenses (maintenance and operating expenses) 4000 dollars / year, the profit rate that the company can be accepted is 15%. Evaluate the investment according to the net future value method.

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