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- An advertising campaign will cost $ 200 000 for planning and $ 40 000 in each of the next six years. It is expected to increase revenues permanently by $ 40 000 per year. Additional revenues will be gained in the pattern of an arithmetic gradient with $ 20 000 in the first year, declining by $ 5000 per year to zero in the fifth year. What is the IRR of this investment? If the company’s MARR is 12 percent, is this a good investment? answer should be=12.4%With an interest rate of 15%, CREATE A CASHFLOW DIAGRAM and CALCULATE THE CAPITALIZE COST of a project with a Php 3,000,000.00 original cost and an extra Php 100,000.00 cost per 10 years. For the first four years, the yearly running cost will be Php 100,000.00, then Php 160,000.00. A substantial rework cost of Php 300,000.00 is also projected every 13 years. (Note: Answer in this sequence. GIVEN > REQUIRED > CASHFLOW DIAGRAM > SOLUTION > CONCLUSION OF FINAL ANSWER. CASHFLOW DIAGRAM IS REQUIRED)PLEASE SHOW YOUR EXCEL FORMULASQUESTION: Consider two mutually exclusive investment alternatives given in the table below. Which project would be selected based on the rate of return decision (IRR) criterion? (Assume that MARR is 10%.). Hint: RIC Determine the MIRR on the incremental investment. Which project would be chosen at MARR = 10%? Provide your answer in a table with column headers N (year), A1 cash flow, A2 cash flow, A2-A1 cash flow. n Project A1 Cash Flow Project A2 Cash Flow 0 -$12,000 -$15,000 1 $7,500 $8,000 2 $7,500 $14,000 3 $7,500 $5,000 IRR 39.45% 38.27%
- (perpetuities) A man planned of building a house. The cost of construction is Php 550,000, while annual maintenance cost is estimated at Php 10,000 . If the interest rate is 7.23%, what is the capitalized cost of the house? Round your answer to 2 decimal placesConsider a palletizer at a bottling plant that has a first cost of $150,000, operating and maintenance costs of $17,500 per year, and an estimated net salvage value of $25,000 at the end of 30 years. Assume an interest rate of 8%. What is the annual equivalent cost of the investment if the planning horizon is 30 years? a. $29,760 b. $30,600 c. $31,980 d. $35,130.i) Find the present value of an asset which will pay you a single cash flow of RM13,000 at time ? = 10. ii) Rank the following in terms of ascending order. (i.e. lowest to highest): ?,?^??, ?,?^?,?^?,?^? b) Hanie Najwa needs to borrow RM5,000 for one year. • Option A: She is offered a loan at an effective annual rate of 5% • Option B: She is offered a loan of RM10,000 at a lower effective annual rate of interest denoted by ?. If she borrows of RM10,000, she can invest the excess RM5,000 for one year at 3%. How low must the rate on the RM10,000 loan (Option B) be in order for Hanie Najwa to prefer it to the RM5,000 loan (Option A)?
- An electric cooperative is considering the use of a concrete pole in the expansion of its power distribution lines. A concrete pole costs 18,000 each and will last 20 years. The company is presently using creosoted wooden poles which cost 12,000 per pole and will last 10 years. If money is worth 12 percent, which pole should be used? Assume annual taxes amount to 1 percent of first cost and zero salvage value in both cases. choices A.Creosoted wooden pole B.Concrete poleSuppose that you purchase a tractor for $170,000 and sell it in 10 years for $50,000. What is the annualized cost (capital recovery) if your required return on capital is 12%?A project has an initial cost of $26,000, a discount rate of 11.7 percent, a life of 5 years, and an NPV of $11,216. Given this, you know that the project is expected to earn a return: A equal to 11.7 percent of $26,000 plus an additional $11,216. B of $11,216 in total. C equal to 11.7 percent of $37,216 (= $26,000 + 11,216). D of 11.7 percent of $11,216. E of $26,000 minus $11,216.
- majestic aircraft carrier is a manufacturer of single engine high performance turboprop aircraft. MAC is considering purchasing composite wing fixtures for the assembly of its signature aircraft. The cost of the assembly system is $3 million with life expectancy of 10 years, annual operating cost of $200000 with zero salvage value. MAC anticipates a stream of $1000000 in revenue per year for 10 years from this project. Assuming MAC uses a MARR of 10 percent, and e=14% is this investment economically justified ? calculate the ERR.( show rates for reinvestment and loan in calculations)Consider the investment project with net cash flows shown. Calculate RIC at an MARR of 18%. Enter as a percentage without the percent sign. For instance, if your answer is 10.23%, enter as 10.23. n Net Cash Flow 0 -$8000 1 $10000 2 $30000 3 -$40000Irrigation canals are proposed to be built in an arid region. The initial cost is estimated to be P2.5M with annual maintenance & operation cost of P48k. For maximum efficiency, the canal will be dredged every 5 years at a cost of P50k. Annual income from farmers & cooperatives who benefit from the project is expected to be P320k. Assuming an annual interest rate of 9% and a 30-year planning horizon, what is the computed ratio? a). 0.86 b).1.068 c).1.608 d). 0.68