You have four independant projects to consider investing in to improve your companies facilities. Their details are given in the following table: Answers entered using text are case sensitive! Alternative A B C D Cash Flows at the end of each year 1 3 -$100,000 $25,000 -$120,000 5,000 -$90,000 50,000 -$90,000 0 0 2 $25,000 10,000 50,000 0 $25,000 20,000 10,000 0 4 $25,000 40,000 0 0 5 $25,000 80,000 0 1,000,000 Using a MARR of 8%, which, if any of the above projects will your company undertake (Perform all calculations using 5 significant figures and round your answer to one decimal place)?
You have four independant projects to consider investing in to improve your companies facilities. Their details are given in the following table: Answers entered using text are case sensitive! Alternative A B C D Cash Flows at the end of each year 1 3 -$100,000 $25,000 -$120,000 5,000 -$90,000 50,000 -$90,000 0 0 2 $25,000 10,000 50,000 0 $25,000 20,000 10,000 0 4 $25,000 40,000 0 0 5 $25,000 80,000 0 1,000,000 Using a MARR of 8%, which, if any of the above projects will your company undertake (Perform all calculations using 5 significant figures and round your answer 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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Question
Transcribed Image Text:Using a MARR of 8%, which, if any of the above projects will your company undertake (Perform all calculations using 5 significant figures and round your
answer to one decimal place)?
What is the IRR for Alternative A (round to one decimal point, e.g. 3.2%)?
Should your company invest in Alternative A (Enter 'Yes' or 'No'):
What is the IRR for Alternative B (round to one decimal point, e.g. 3.2%)?
Should your company invest in Alternative B (Enter 'Yes' or 'No'):
What is the IRR for Alternative C (round to one decimal point, e.g. 3.2%)?
Should your company invest in Alternative C (Enter 'Yes' or 'No'):
What is the IRR for Alternative D (round to one decimal point, e.g. 3.2%)?
Should your company invest in Alternative D (Enter 'Yes' or 'No'):
Number
Number
Number
Number
%
%
%
2
as
Transcribed Image Text:You have four independant projects to consider investing in to improve your companies facilities. Their details are given in the following table:
Answers entered using text are case sensitive!
Alternative
A
B
C
D
Cash Flows at the end of each year
1
2
-$100,000 $25,000 $25,000
-$120,000 5,000
10,000
-$90,000
50,000
50,000
-$90,000
0
0
0
3
$25,000
20,000
10,000
0
4
$25,000
40,000
0
0
5
$25,000
80,000
0
1,000,000
Using a MARR of 8%, which, if any of the above projects will your company undertake (Perform all calculations using 5 significant figures and round your
answer to one decimal place)?
Expert Solution
Step 1: Given:
Here,
MARR is 8%
| Year | Alternative 1 | Alternative 2 | Alternative 3 | Alternative 4 |
| 0 | $ (100,000.00) | $ (120,000.00) | $ (90,000.00) | $ (90,000.00) |
| 1 | $ 25,000.00 | $ 5,000.00 | $ 50,000.00 | $ - |
| 2 | $ 25,000.00 | $ 10,000.00 | $ 50,000.00 | $ - |
| 3 | $ 25,000.00 | $ 20,000.00 | $ 10,000.00 | $ - |
| 4 | $ 25,000.00 | $ 40,000.00 | $ - | $ - |
| 5 | $ 25,000.00 | $ 80,000.00 | $ - | $ 100,000.00 |
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