What is the present worth of aproject with an initial investment of$8,000 and a net annual income of$2,500 for 6 years? MARR = 13%.a. -$8,000b. $4,151c. $9,994d. $7,000e. $1,994Clear my choice

Present Value Present value is the present worth of any sum of a money to be received in the future…

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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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1. What is the profitability index of a project that costs $90,000 and returns $30,000 annually for 8 years if the opportunity cost of capital is 9.6%? a.0.64 b.0.80 c.1.76 d.1.05 e.1.26 2. King Corporation is planning a 15-year project with an initial investment of $2,013,000. The project will have $563,000 cash inflows per year in years 1-2; $166,000 cash inflows in years 3-10, and $57,000 cash inflows in years 11-15. Determine the project's internal rate of return (IRR). Using financial calculator a.6.87% b.5.72% c.4.58% d.10.30% e.8.24%
An investment of $80,000 is expected to generate a net annual income of $27,000 for 5 years. If the study period is 20 years, and assuming this alternative will be repeated over the study period, what is the present worth of this investment if MARR is 11%? O a. $5,354 O b. $21,418 O c. $135,010 O d. $42,639 O e. $19,789
21. Consider a project that costs $250 now and is expected to generate $98 in net revenues at the end of each of the next three years. If the MARR is 5%, the future worth of this project is __________. A. $18.24 B. $19.54 C. $22.33 D. $18.29 23. Machine X has an initial cost of $12,000 and annual maintenance of $700 per year. It has a useful life of four years and no salvage value at the end of that time. Machine Y costs $22,000 initially and has no maintenance costs during the first year. Maintenance is $200 at the end of the second year and increases by $200 per year thereafter. Machine Y has a useful life of eight years and an anticipated salvage value of $5,000 at the end of its useful life. If the MARR is 6%, what is the approximate Net Present Worth (NPW) of machine X? A. -$28,563 B. -$25,852 C. -$32,085 D. -$22,318
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.
9) A project has an initial cost of $65,000, expected net cash inflows of $11,000 per year for 9 years, and a cost of capital of 13%. What is the project's payback period? Round your answer to two decimal places. _____years
Mike Derr Company expects to earn 6% per year on an investment that will pay $616,000 seven years from now. (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.) Compute the present value of this investment. Future Value Table Factor Present Value
What is the simple payback period (in years) for an investment of $165,000 if the net annual income is $35,000?
An investment of S80,000 is expected to generate a net annual income of $27,000 for 5 years. If the study period is 20 years, and assuming this aiternative will be repeated over the study period, what is the present worth of this investment if MARR is 13P O a $14,905 O b. $17,019 OE $4,255 Od S109,668 O e. $29,880
For a project that has a net investment of $150,000 and net cash flows of $40,000 for 5 years; Is the internal rate of return between (9% and 10%) or (10% and 11%). Explain your answer.
(Ex) The initial investment cost for project A is 200 000 $ at probability 100%. the annual revenue is 50 000$ at probability 30% , 100 000 at probability 50% and 125 000 $ at 20% the life of project is 2 year at probability 20%, 3 year at 20% 4 year at 50% ,5 year at 10%, find expected present worth if i=9 % per year.
If $17,000 is invested at 10% per year, in approximately how many years will the investment double? OA. 8.4 years OB. 11 years OC. 14.6 years OD. 7.3 years K
Net cost of investment is 100,000. Profitability index is 1.3 while cost of capital is 10%. Useful life is 10 years. Use up to two decimal places for the PVF. What is the ARR? A• 42.35% B• 21.17% C• 22.34% D• 30%

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What is the present worth of a project with an initial investment of $8,000 and a net annual income of $2,500 for 6 years? MARR = 13%. %3D