Calculate annual worth.

Question

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Answer 1

Question

Chapter 18, Problem 1P

To determine

Calculate annual worth.

Expert Solution & Answer

Explanation of Solution

Investment (INV) is $850,000. Lowest range of revenue (LR) is $290,000 per year. Highest range of revenue (HR) is $$325,000 per year. Time period (n) is 5. Rate of return (i) is 2%.

Annual worth (AW) for the lowest range of earning can be calculated as follows.

AW=−INV(i(1+i)n(1+i)n−1)+LR=−850,000(0.2(1+0.2)5(1+0.2)5−1)+290,000=−850,000(0.33438)+290,000=5,777

Annual worth of the project with the lowest expected earnings per year is $5,777.

Annual worth (AW) for the highest range of earning can be calculated as follows.

AW=−INV(i(1+i)n(1+i)n−1)+HR=−850,000(0.2(1+0.2)5(1+0.2)5−1)+325,000=−850,000(0.33438)+325,000=40,777

Annual worth of the project with highest expected earnings per year is $40,777.

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Answer 2

Question

Chapter 18, Problem 1P

To determine

Calculate annual worth.

Expert Solution & Answer

Explanation of Solution

Investment (INV) is $850,000. Lowest range of revenue (LR) is $290,000 per year. Highest range of revenue (HR) is $$325,000 per year. Time period (n) is 5. Rate of return (i) is 2%.

Annual worth (AW) for the lowest range of earning can be calculated as follows.

AW=−INV(i(1+i)n(1+i)n−1)+LR=−850,000(0.2(1+0.2)5(1+0.2)5−1)+290,000=−850,000(0.33438)+290,000=5,777

Annual worth of the project with the lowest expected earnings per year is $5,777.

Annual worth (AW) for the highest range of earning can be calculated as follows.

AW=−INV(i(1+i)n(1+i)n−1)+HR=−850,000(0.2(1+0.2)5(1+0.2)5−1)+325,000=−850,000(0.33438)+325,000=40,777

Annual worth of the project with highest expected earnings per year is $40,777.

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Answer 3

Question

Chapter 18, Problem 1P

To determine

Calculate annual worth.

Expert Solution & Answer

Explanation of Solution

Investment (INV) is $850,000. Lowest range of revenue (LR) is $290,000 per year. Highest range of revenue (HR) is $$325,000 per year. Time period (n) is 5. Rate of return (i) is 2%.

Annual worth (AW) for the lowest range of earning can be calculated as follows.

AW=−INV(i(1+i)n(1+i)n−1)+LR=−850,000(0.2(1+0.2)5(1+0.2)5−1)+290,000=−850,000(0.33438)+290,000=5,777

Annual worth of the project with the lowest expected earnings per year is $5,777.

Annual worth (AW) for the highest range of earning can be calculated as follows.

AW=−INV(i(1+i)n(1+i)n−1)+HR=−850,000(0.2(1+0.2)5(1+0.2)5−1)+325,000=−850,000(0.33438)+325,000=40,777

Annual worth of the project with highest expected earnings per year is $40,777.

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Answer 4

Question

Chapter 18, Problem 1P

To determine

Calculate annual worth.

Expert Solution & Answer

Explanation of Solution

Investment (INV) is $850,000. Lowest range of revenue (LR) is $290,000 per year. Highest range of revenue (HR) is $$325,000 per year. Time period (n) is 5. Rate of return (i) is 2%.

Annual worth (AW) for the lowest range of earning can be calculated as follows.

AW=−INV(i(1+i)n(1+i)n−1)+LR=−850,000(0.2(1+0.2)5(1+0.2)5−1)+290,000=−850,000(0.33438)+290,000=5,777

Annual worth of the project with the lowest expected earnings per year is $5,777.

Annual worth (AW) for the highest range of earning can be calculated as follows.

AW=−INV(i(1+i)n(1+i)n−1)+HR=−850,000(0.2(1+0.2)5(1+0.2)5−1)+325,000=−850,000(0.33438)+325,000=40,777

Annual worth of the project with highest expected earnings per year is $40,777.

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Answer 5

Chapter 18, Problem 1P

To determine

Calculate annual worth.

Expert Solution & Answer

Explanation of Solution

Investment (INV) is $850,000. Lowest range of revenue (LR) is $290,000 per year. Highest range of revenue (HR) is $$325,000 per year. Time period (n) is 5. Rate of return (i) is 2%.

Annual worth (AW) for the lowest range of earning can be calculated as follows.

AW=−INV(i(1+i)n(1+i)n−1)+LR=−850,000(0.2(1+0.2)5(1+0.2)5−1)+290,000=−850,000(0.33438)+290,000=5,777

Annual worth of the project with the lowest expected earnings per year is $5,777.

Annual worth (AW) for the highest range of earning can be calculated as follows.

AW=−INV(i(1+i)n(1+i)n−1)+HR=−850,000(0.2(1+0.2)5(1+0.2)5−1)+325,000=−850,000(0.33438)+325,000=40,777

Annual worth of the project with highest expected earnings per year is $40,777.

Answer 6

Chapter 18, Problem 1P

To determine

Calculate annual worth.

Expert Solution & Answer

Explanation of Solution

Investment (INV) is $850,000. Lowest range of revenue (LR) is $290,000 per year. Highest range of revenue (HR) is $$325,000 per year. Time period (n) is 5. Rate of return (i) is 2%.

Annual worth (AW) for the lowest range of earning can be calculated as follows.

AW=−INV(i(1+i)n(1+i)n−1)+LR=−850,000(0.2(1+0.2)5(1+0.2)5−1)+290,000=−850,000(0.33438)+290,000=5,777

Annual worth of the project with the lowest expected earnings per year is $5,777.

Annual worth (AW) for the highest range of earning can be calculated as follows.

AW=−INV(i(1+i)n(1+i)n−1)+HR=−850,000(0.2(1+0.2)5(1+0.2)5−1)+325,000=−850,000(0.33438)+325,000=40,777

Annual worth of the project with highest expected earnings per year is $40,777.

Answer 7

Chapter 18, Problem 1P

To determine

Calculate annual worth.

Answer 8

Expert Solution & Answer

Explanation of Solution

Investment (INV) is $850,000. Lowest range of revenue (LR) is $290,000 per year. Highest range of revenue (HR) is $$325,000 per year. Time period (n) is 5. Rate of return (i) is 2%.

Annual worth (AW) for the lowest range of earning can be calculated as follows.

AW=−INV(i(1+i)n(1+i)n−1)+LR=−850,000(0.2(1+0.2)5(1+0.2)5−1)+290,000=−850,000(0.33438)+290,000=5,777

Annual worth of the project with the lowest expected earnings per year is $5,777.

Annual worth (AW) for the highest range of earning can be calculated as follows.

AW=−INV(i(1+i)n(1+i)n−1)+HR=−850,000(0.2(1+0.2)5(1+0.2)5−1)+325,000=−850,000(0.33438)+325,000=40,777

Annual worth of the project with highest expected earnings per year is $40,777.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 18 - Prob. 1P Ch. 18 - Prob. 2P Ch. 18 - Prob. 3P Ch. 18 - Prob. 4P Ch. 18 - Prob. 5P Ch. 18 - Prob. 6P Ch. 18 - Prob. 7P Ch. 18 - Prob. 8P Ch. 18 - Prob. 9P Ch. 18 - Prob. 10P

Calculate annual worth.

Calculate annual worth.

Explanation of Solution

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Chapter 18 Solutions