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Using SOLVER for sensitivity analysis, d. determine the optimum portfolio (state the investments selected and the portfolio PW) using (1) the current limit on investment capital, (2) plus 20% of the year 0 budget, and (3) minus 20% of the year 0 budget. e. determine the optimum portfolio (state the investments selected and the portfolio PW) using (1) the current MARR, (2) a MARR of 12%, and (3) a MARR of 8%. EOY CF(1) CF(2) CF(3) CF(4) -$50 -$125 -$200 -$250 1 -$100 -$75 $50 $75 EOY CF(1) CF(2) CF(3) CF(4) $50 $70 $50 $75 3 $50 $70 $50 $75 4 $50 $70 $50 $75 5 $50 $70 $75 $75 $50 $70 $75 $85 7 $50 $70 $75 $85 8 $50 $70 $75 $85 $50 $70 $75 $85 10 $75 $100 $75 $100 6. 9.

Using SOLVER for sensitivity analysis, d. determine the optimum portfolio (state the investments selected and the portfolio PW) using (1) the current limit on investment capital, (2) plus 20% of the year 0 budget, and (3) minus 20% of the year 0 budget. e. determine the optimum portfolio (state the investments selected and the portfolio PW) using (1) the current MARR, (2) a MARR of 12%, and (3) a MARR of 8%. EOY CF(1) CF(2) CF(3) CF(4) -$50 -$125 -$200 -$250 1 -$100 -$75 $50 $75 EOY CF(1) CF(2) CF(3) CF(4) $50 $70 $50 $75 3 $50 $70 $50 $75 4 $50 $70 $50 $75 5 $50 $70 $75 $75 $50 $70 $75 $85 7 $50 $70 $75 $85 8 $50 $70 $75 $85 $50 $70 $75 $85 10 $75 $100 $75 $100 6. 9.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Rex Electric has decided to move into low-rise (2–8 floors) commercial building electrical wiring. After great success in upscale residential and small commercial wiring, they have identified four independent and indivisible investments, any or all of which will help make the move to the next level. Rex Electric’s MARR is 10%, and $500,000 is available for investment immediately, with $175,000 available for follow-up investment the next year. The cash flows are shown below, in thousands of dollars.  a. Which alternatives should be selected by Rex Electric? b. What is the present worth for the selected investment portfolio? c. What is the IRR for the optimum portfolio?

Using SOLVER for sensitivity analysis, d. determine the optimum portfolio (state the investments selected and the portfolio PW) using (1) the current limit on investment capital, (2) plus 20% of the year 0 budget, and (3) minus 20% of the year 0 budget. e. determine the optimum portfolio (state the investments selected and the portfolio PW) using (1) the current MARR, (2) a MARR of 12%, and (3) a MARR of 8%.
Transcribed Image Text:Using SOLVER for sensitivity analysis, d. determine the optimum portfolio (state the investments selected and the portfolio PW) using (1) the current limit on investment capital, (2) plus 20% of the year 0 budget, and (3) minus 20% of the year 0 budget. e. determine the optimum portfolio (state the investments selected and the portfolio PW) using (1) the current MARR, (2) a MARR of 12%, and (3) a MARR of 8%.
EOY CF(1) CF(2) CF(3) CF(4) -$50 -$125 -$200 -$250 1 -$100 -$75 $50 $75 EOY CF(1) CF(2) CF(3) CF(4) $50 $70 $50 $75 3 $50 $70 $50 $75 4 $50 $70 $50 $75 5 $50 $70 $75 $75 $50 $70 $75 $85 7 $50 $70 $75 $85 8 $50 $70 $75 $85 $50 $70 $75 $85 10 $75 $100 $75 $100 6. 9.
Transcribed Image Text:EOY CF(1) CF(2) CF(3) CF(4) -$50 -$125 -$200 -$250 1 -$100 -$75 $50 $75 EOY CF(1) CF(2) CF(3) CF(4) $50 $70 $50 $75 3 $50 $70 $50 $75 4 $50 $70 $50 $75 5 $50 $70 $75 $75 $50 $70 $75 $85 7 $50 $70 $75 $85 8 $50 $70 $75 $85 $50 $70 $75 $85 10 $75 $100 $75 $100 6. 9.
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