Q2C) Use Incremental benefit cost analysis method to compare between the following three projects. Use i=9%/yr.: Project Project A Project C Project D Item Annual Benefits to $10,000 $6,000 $8,000 pablic Annual Disbenefits $2000 $3,000 $1,500 to public Capital Investment $20,000 $15,000 $14,000 Annual Operational $1,000 $1,800 $2.000 Cost Useful Life 10 years 12 years 15 years

Q2C) Use Incremental benefit cost analysis method to compare between the following three projects. Use i=9%/yr.: Project Project A Project C Project D Item Annual Benefits to $10,000 $6,000 $8,000 pablic Annual Disbenefits $2000 $3,000 $1,500 to public Capital Investment $20,000 $15,000 $14,000 Annual Operational $1,000 $1,800 $2.000 Cost Useful Life 10 years 12 years 15 years

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 10P: Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year...

See similar textbooks

Similar questions

Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year for 5 years. Project L costs $25,000 and is expected to produce cash flows of $7,400 per year for 5 years. Calculate the two projects’ NPVs, IRRs, MIRRs, and PIs, assuming a cost of capital of 12%. Which project would be selected, assuming they are mutually exclusive, using each ranking method? Which should actually be selected?
Determine the best alternatives for a government project with the following data: PROJECT A B C ANNUAL BENEFIT P250,000.00 P320,000.00 P350,000.00 ANNUAL COSTS P100,000.00 P135,000.00 p180,000.00 B/C RATIO 2.5 2.37 1.94 What is the best Project and its incremental ratio? a. A = 1.2 b. A = 2 c. B = 2.0 d. B = 1.18
Determine the B/C ratio for the following project.First Cost = P100, 000Project life, years = 5Salvage value = P10, 000Annual benefits = P60, 000Annual O and M = P22, 000Interest rate= 15%
The following information relates to two projects of which you have to select one to invest in.Both projects have an initial cost of $400,000 and only one can be undertaken.Project X YExpected profits $ $Year 1 160,000 60,000Year 2 160,000 100,000Year 3 80,000 180,000Year 4 40,000 240,000Estimated resale value atthe end of year 4 80,000 80,000i) Profit is calculated after deducting straight line depreciationii) The cost of capital is 16%Required:a) For both projects, calculate the following:i) The payback period to one decimal place ii) The accounting rate of return using average investments iii) The net present value iv) Advise the board which project in your opinion should be undertaken, givingreasons for your decision.
time value of money practice example: Please show calcualtions/steps (excell or other format): a) Calculate PB, DPB, NPV, IRR and PI for the following project: - discount rate of 12% - initial investment = 750,000 - ncf yr 1 = 150,000 - ncf yr 2 = 300,000 - ncf yr 3 = 400,000 - ncf yr 4 = 250,000 - ncf yr 5 = 100,000
Cooney Co. is evaluating the following mutually exclusive projects. The manager has determined that the appropriate discount rate is 6.2% for all the recommended projects. Rank order the projects based on the profitability index. Year Project A Project B Project C 0 (35,000) (65,000) (86,000) 1 - 40,000 44,000 2 - 22,000 44,000 3 55,000 22,000 35,000
Calculate PB, DPB, NPV, IRR and PI for the following project with a discount rate of 12% - initial investment = 750,000, ncf yr 1 = 150,000, ncf yr 2 = 300,000, ncf yr 3 = 400,000, ncf yr 4 = 250,000, ncf yr 5 = 100,000
Perform financial analysis for a project using the format discussed in the course. Assume the projected costs and benefits for this project are spread over four years as follows: Estimated costs are $130,000 in Year 1 and $15,000 each year in Years 2, 3, 4, and 5. Estimated benefits are $0 in Year 1 and $90,000 each year in Years 2, 3, 4, and 5. Use an 8% discount rate. Use the NPV template provided (modify to suit your answer) and clearly display the NPV, ROI, and year in which payback occurs. Write a paragraph explaining whether you would recommend investing in this project based on your financial analysis. Explain your answer referring to the NPV, ROI, and payback for this project.
Please show calcualtions: a) Calculate the NPV and IRR for the following project with a discount rate of 10% - ncf yr 0 = -250,000, ncf yr 1 = 200,000, ncf yr 2 = 350,000, ncf yr 3 = 300,000, ncf yr 4 = 300,000, ncf yr 5 = -50,000
You must decide firm which of the proposed projects should be accepted for the upcoming year since only $6 million is available. Which projects should be accepted? Project Cost (millions) NPV (millions) A 3.25 0.80 B 1.75 0.52 C 4.5 0.69 D 3.75 0.95 E 1.25 0.25 F 0.50 0.25
If the opportunity cost of capital of 4%, Following information relate to the cash flow of below three projects proposals. Project Year: 0 1 2 3 X -$40,000 +20,000 +18,000 +25,000 Y -$65,000 +15,000 +30,000 +35,000 Z -70000 25,000 25,000 30,000 ِِA.If the discount rate 4%, which project will be acceptable under the discount payback period? B. With help of scientific calculator or excel program, calculate the IRR for project X and Y?
You are evaluating three mutually exclusive public-works projects with the respective costs and benefits included in the table below. The useful life of each of the projects is 30 years and MARR is 12% annually. Should any of the projects be selected? (Hint: use incremental B-C Analysis) A B C Capital Investment $10,500,000 $12,000,000 $14,000,000 Annual Operating and Maintenance Costs $850,000 $925,000 $930,000 Market Value $1,350,000 $1,950,000 $2,100,000 Annual Benefit $2,250,000 $2,565,000 $2,700,000