Which alternative in the table below should be selected when the MARR = 7% per year? The life of each alternative is 10 years.Increment ConsideredA(A - DN)A(B-A)A(C-B)A(D-C)A Investment costA (Annual Revenues lessCosts)$700$600$1,100$1,600$155$126$165$160IRR on A Investment Cost17.9%16.4%?.....The IRR on A(C-B) is %. (Round to one decimal place.)

Internal rate of return is the discount rate at which the present value of the future cash flow and…

Which alternative in the table below should be selected when the MARR = 7% per year? The life of each alternative is 10 years. A(A - DN) $700 A(C-B) $1,100 Increment Considered A(B-A) A(D-C) $1,600 A Investment cost A (Annual Revenues less Costs) IRR on A Investment Cost $600 $155 $126 $165 $160 17.9% 16.4% ... The IRR on A(C-B) is %. (Round to one decimal place.)

Which alternative in the table below should be selected when the MARR = 7% per year? The life of each alternative is 10 years. A(A - DN) $700 A(C-B) $1,100 Increment Considered A(B-A) A(D-C) $1,600 A Investment cost A (Annual Revenues less Costs) IRR on A Investment Cost $600 $155 $126 $165 $160 17.9% 16.4% ... The IRR on A(C-B) is %. (Round to one decimal place.)

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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Suppose you wish to have RM1.5 million at the end of 25 years from now. You are considering two options of investment. Alternative A B Opportunity cost 12% p.a 10% p.a Discounted annually semi-annually a) Which one is the better option?
Invest $600; Annual interest rate 1.8%; Compounded weekly; Want $1,000. Find years needed. Variable Value N = I% = PV = PMT= FV = P/Y = C/Y = What is the Missing Variable Unit? Write a Context Sentence
Consider the three small mutually exclusive investment alternatives in the table below. The feasible alternative chosen must provide service for a 10-year period. The MARR is 12% per year, and the market value of each is 0 at the end of useful life. State all assumptions (repeatablity/co-terminated at 5 year study period) you make in your analysis. Which alternative should be chosen? A B Capital Investment PhP 2,000 PhP 8,000 PhP 20,000 Use IRR (FW equation) analysis. Annual revenues less expenses 600 2,200 3,600 Useful life (years) 5 5 10 ANSWER: IRRA = 15.24% ; IRRB = 11.65% ; IRRC = Blank 3% ; Choose alternative Blank 4 %3D %3D Do not use comma and any unit of measure. Use two decimal places in the Final answer.
Decide which option to choose using a 12% BCR and cost-benefit analysis A B Initial cost 500 800 decent annual income 200 150 useful life (years) 8 8
Use method incremental benefit and cost analysis only.
1. Ati= 10% per year and a loan amount of $10,000. If N = 20, what are the payments and future value? Solve this problem using %3! a. Excel b. Formula
A firm must decide between two designs A and B. Their effective income rate is 50%. If the desired after-tax return on investment is 8% per year, which alternative should be chosen? *Use repeatability assumption and AW method. Detail analysis is required* (20%) 1 B Capital investment 40000 MV at end of useful life 4000 Annual expenses 2500 Depreciation method MACRS (GDS) With 5- year recovery period Useful life (in years) 8 A 30000 6000 3000 SL to zero book value over 5 years 6
At what interest rate the 5-year Benefit-Cost-Ratio (BCR) becomes unity for an equipment project with the immediate installation cost of -$2500 (in year 0) and a maintenance cost of -$1500 in year 3, and annual benefit of $1000 from the first year onward (n=1 to 5)? Select one: O A. 12.5% O B. 11.5% OC. 14.5% O D. 13.5% O E. 5%
5. Compare the following 2 alternatives with a method of your choice. The market rate is 6% and inflation is expected to run at 2.5% per year. Alt A B Construction cost $ Benefits $/yr 450,000 380,000 2,000,000 1,500,000 Salvage 200,000 150,000 Life (yrs) 12 9
10
Two mutually exclusive alternatives are being considered. The MARR is 15% per year. General inflation is 5.5%/year. Based on the data below, performan appropriate analysis to select the most economical alternative. State your assumptions.

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