Based on present worth analysis!!!!! 3) Consider the cash flows for the two alternatives assuming Interest rate 10%ABn$2500.005000.001$1000.001800.0021800.001800.0031000.002000.00400.002000.00Suppose that project A and B are mutually exclusive which project would you selectbased on:al Present worth Analysis

here we calculate the present value of the both project and compare and conclude the best project…

3) Consider the cash flows for the two alternatives assuming Interest rate 10% A в $2500.00 5000.00 1 $1000.00 1800.00 1800.00 1800.00 3 1000.00 2000.00 400.00 2000.00 Suppose that project A and B are mutually exclusive which project would you select based on : al Present worth Analysis

3) Consider the cash flows for the two alternatives assuming Interest rate 10% A в $2500.00 5000.00 1 $1000.00 1800.00 1800.00 1800.00 3 1000.00 2000.00 400.00 2000.00 Suppose that project A and B are mutually exclusive which project would you select based on : al Present worth Analysis

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: A stock now trades for 11 TL per share and distributes 0.16 TL in dividends annually. What is the…

A: A metric of financial performance known as return on equity (ROE) is obtained by dividing net income…

Q: A company is setting up a project to buld having Units in which the investment volume is estimated…

A: Introduction Initial investment = 20,000 ×100 dollar =2,000,0004 = 500,000 Cost = 50,000 annual net…

Q: Q2) The two projects as part of oil industrial their cash flows in tables belwo: project B: r=8%…

A: Hey, Thankyou for the question, Since you have posted multiple sub parts so as per our norms we will…

Q: [CLO-6) Given the following information: Compute the Present Worth of the estimated cash flows if…

A: Here we calculate the present worth by using the given data and choose the correct option , so the…

Q: A new flood control project is expected to involve expenditures for periodic heavy mai nance as…

A: Equivalent annual cost is the estimated cost incurred per year of a machine. It is calculated by…

Q: Data for four mutually exclusive alternatives are given in the table below. Assume a life of 7 years…

A: The correct answer is given in the second step.

Q: Milo planned of building house. The cost of construction is P500,000 while annual maintenance cost…

A: In economics, present value refers to the current value of a future stream of cash flow. Future…

Q: ou work for the 3T company, which expects to earn at least 18 percent on its investments. You have…

A: Since the Total net incomes of both the activities are more than their individual beginning ventures…

Q: A firm is considering the purchase of a new machine to increase the output of an existing production…

Q: 11-7. Jackson has decided to invest some money and he has two plans in mind. Determine the range of…

A: Present Worth is a widely used methodology to compare two investment alternatives by finding out the…

Q: Two investment projects are being evaluated based on their payback periods. The first altemative…

A: In economics, present value refers to the current value of a future stream of cash flow. Net present…

Q: Financial data related to a piece of equipment are provided in the table below. Initial cost $18,000…

A: Given: Initial inflow=$18000 Annual cost=$1500 Annual benefit=$5500 Salvage value=$2000 Number of…

Q: 13. Using benefit-cost ratio analysis, 5 year useful life, and a 15% MARR, determine which of the…

A: cost-benefit ratio analysis is computed for the determination of the economic acceptability of the…

Q: Consider the following two mutually exclusive projects: (a) At an interest rate of 25%, which…

A: a) PROJECT A: PW(25%) = -$1000+$912(P/F,25%,1) +$684(P/F,25%,2) +$456(P/F,25%,3) +$228(P/F,25%,4)…

Q: Quilts R Us (QRU) is considering an investment in a new patterning attachment with the cash flow…

A: The external rate of return is that rate of return which balances the present value (PV) of all cost…

Q: 10.4 (LG 10.4) The following data are available for two mutually exclusive projects: Project A…

Q: 3. Choose the correct answer. Only one answer may be marked/circled. 1. The equal service…

A: 1. Option A is correct because Specified study period Explanation In order to satisfy the equal…

Q: Future worth analysis of ME alternative is exactly like except calculate FW. Select one: O a. ROR…

A: 1. *FUTURE WORTH ANALYSIS OF ME ALTERNATIVE IS EXACTLY LIKE "PW ANALYSIS"EXCEPT CALCULATE FW…

Q: Calculate the benefit-cost ratio with a 10-year useful life, and a 25% MARR, and determine which of…

Q: 400 1,500 2,000 a) Suppose that projects A and B are mutually exclusive. Which project would you…

A: A) PROJECT A & B Year PVF Cash Flow (A) PV of CF (A) Cash Flow (B) PV of CF (B) 0 1.0000…

Q: "Kim has $20301 to invest for 7 years. She has the following options: [AJterm deposit at 3.8%…

A: Given: Amount invested=$20301 Option A: 3.8% compounded annually Option B: 3.78% compounded quartely…

Q: An appraisal is being carried out for two alternative projects with the cash flows shown below.…

A: Given: i= 10%

Q: A library shelving system has a first cost of $20,000 and a useful life of 10 years. The annual…

A: Given; First cost= $20000 Annual maintenance cost= $2500 Annual benefits= $9000 Interest rate= 10%…

Q: Data for four mutually exclusive alternatives are given in the table below. Assume a life of 7 years…

A: Benefit-to-cost (B/C) ratio is a method for evaluating how much the benefits of a specific venture…

Q: 4. A business is generating $100,000 annually over 10 years, with a salvage value of S1,000,000 in…

A: Step 1 Use the table below: Cost 10.00% Cash flows Year Discounted CF = Cash…

Q: Question #5: a. You have 2 investment choices. The Warlight machine costs $10,000 and has a salvage…

A: Given information 2 Machines: Warlight Machine and Bridgedale machine Cash flow table MARR=18%

Q: A snow cone machine at an ice cream shop costs $15,000. The machine is expected to generate profits…

A: The cost of the snow cone machine = $15000 The annual profit generated by machine (annuity, A) =…

Q: The estimates for a project appear in the following table: Dear optimistic most likely pessimist…

A: Optimistic estimation Fixed cost=250000, Annual profit=20000, N=30 Most likely estimation Fixed…

Q: You are considering an open-pit mining operation. The cash flow pattern issomewhat unusual since you…

A: Rate of Return i.e. ROI is the net loss or profit of any investment for a given period of time,…

Q: Given four proposals for funding a new project with a 100M limit on capital funding and the MARR is…

A: When net benefits become equal to net cost then such a condition is termed as Internal rate of…

Q: 7) A machine costing $25,000 to buy and $3,000 per year to operate will save mainly labor expenses…

A: Given: The cost of a machine is = $25,000 The operating cost per year is = $3,000 Machine years = 6…

Q: A firm is considering the purchase of a new machine to increase the output of an existing production…

A: A B Initial Investment 14,000 65,000 Annual Cost 14,000 9,000 MV 8,000 13,000

Q: A firm is considering the purchase of a new machine to increase the output of an existing production…

Q: MKBIC Systems is evaluating four projects A, B, C and D that have risks associated with the…

A: To find whether which project is the best alternative, we will add all the events of probability and…

Q: Compute the (i) net present value and (ii) internal rate of return of the following Q2. capital…

A: Let's first calculate NPV:- For A:- NPV = -50000(1+15%)0+10000(1+15%)1+30000(1+15%)2+25000(1+15%)3…

Q: Consider a palletizer at a bottling plant that has a first cost of $150,000, operating and…

A: Equivalent annual cost is the cost of buying, operating maintaining and disposing a machinery or any…

Q: Based on the net worth analysis, which of the following projects is acceptable? Assume i = 12%.…

A: In economics, present value refers to the current value of a future stream of cash flow. The net…

Q: A newly constructed bridge costs $15,000,000.The same bridge is estimated to need renovationevery 15…

A: The formula to calculate capitalized cost is given below: Where P is the principal sum, A is the…

Q: Siemens AG invests €80,000,000 to build a manufacturing plant to build wind turbines. The company…

A: The time it will take for a business to recover an investment is known as the payback period. The…

Q: A concrete pavement on a street would cost P 10,000 and would last for 5 years with negligible…

A: Given; Cost of concrete pavement= P10000Time; n= 5 yearsCost of removal of old surface=P1000Interest…

Q: Solve this problem in Excel. The following two alternatives are mutually exclusive. (a) Which one…

A: Ordinary Above average Initial Cost 38,000 35,000 Annual Benefits 9,400 9,000 Life 5 6…

Q: A company that makes clutch disks for race cars has the annual net cash flows shown for one…

A: First, cumulative CF should be calculated. Year Cash Flow, $1000 Cumulative CF, $1000…

Q: a. A project costs $10 up front and has net benefits of $15 with probability 0.8 at the end of the…

A: Net present value (NPV) can be calculated by using the following formula.

Q: Your company is determing whether or not it should invest in a new pallet wrapping station. The…

A: PV = -6,500 + 2,000(P/A, 13%, 3) + 400(P/F, 13%, 3) = -6,500 + 2,000(2.3612) + 400(0.6931)…

Q: Mega Dynamics is considering the following two projects which have a cost of capital of 11%. What…

A: We are going to find Present worth of Cash inflow and Cash Outflow to answer this question. We have…

Q: Hydroflask is considering two new cap options for their water bottles. Using the table below, which…

A: The following are the cashflows of two caps. We calculate the net present value (NPV) of both…

Q: apital Investment $5,000 $6,000 15 Useful life 20 $800 in year 10 and decreasing by a constant…

A: Answer in Step 2

Q: A1 What is the expected value of alternative A? $8 O. $5.08 0.5 Ob. $8.83 .27 EMV-7.5 A2 O. 54.98…

A: Decision tree analysis is undertaken to evaluate the difference choices that can be undertaken by a…

Question

Based on present worth analysis!!!!!

3) Consider the cash flows for the two alternatives assuming Interest rate 10%
A
B
n
$2500.00
5000.00
1
$1000.00
1800.00
2
1800.00
1800.00
3
1000.00
2000.00
400.00
2000.00
Suppose that project A and B are mutually exclusive which project would you select
based on:
al Present worth Analysis

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

I want you to provide me the Cash Flow diagram of the problem. Only cash flow diagram, the solution is already there. Thanks in advance! The annual estimated cash flow is $140,000. The salvage value will be 12% of the initial price after 5 years. The discount rate (r) is 18% Let us assume the initial price of the doughnut machine be X. PV of cash inflows=PV of cash outflows$140,000×PVAF4,18%+.12X×PVF5,18%=X$140,000×2.69006180465+.12X×0.43710921621=X$376,608.652651=X-0.05245310594$376,608.652651=0.94754689406XX=$397,456.479475 The maximum purchase price of the doughnut machine is $397,456.48.
You have been asked by the chief financial officer of your company to estimate what thecompany’s share price will be at the end of four years from today. Your company has recentlypaid a dividend of $1.00 which is expected to grow at 5% p.a. over the foreseeable future. Ifthe company’s required rate of return on equity is 10% your price estimate at the end of year 4will be closest to: A. $20.00.B. $21.00.C. $24.30.D. $25.50.
dont use excel i will 5 upvotes. Assuming a firm’s weighted average cost of capital is 12%, what is the discounted payback period of the following project? Year Net Cash Flow 0 -$375,000 1 $200,000 2 $200,000 3 $350,000 Group of answer choices a. 2.40 years b. 2.15 years c. 2.21 years d. 1.88 years
Quilts R Us (QRU) is considering an investment in a new patterning attachment with the cash flow profile shown in the table below. QRU’s MARR is 13.5%/yr. Solve, a. What is the external rate of return of this investment? b. What is the decision rule for judging the attractiveness of investments based on external rate of return? c. Should QRU invest?
Given the following cash flows for project X and project Y, Year Project X Project Y 0 -55000 -100000 1 20000 15000 2 13500 17000 3 11000 19000 4 10000 25000 5 9000 30000 6 7500 35000 Calculate the NPV, IRR, MIRR and traditional payback period for each project, assuming a required rate of return of 7 percent If the projects are independent, which project(s) should be selected? If they are mutually exclusive, which project should be selected?
Assuming monetary benefits of an information system at $85,000 per year, one-time costs of $75,000, recurring costs of $35,000 per year, a discount rate of 12 percent, and a 5-year time horizon, calculate the net present value (NPV) of the system’s costs and benefits. Also calculate the overall return on investment (ROI) of the project and then present a break-even analysis (BEA). At what point does break-even occur?
Consider a proposed project that has the following costs and benefits. Using linear interpolation, what is the project's simple or conventional payback period? Year Costs Benefits 0 $4,000 1 2,000 2 $1,500 3 1,500 4 1,500 5 2,300 6 2,300 A. 6.58 years B. 4.65 years C. 3.98 years D. 5.41 years
(Need answer ASAP) A man decided to Invest in an equipment worth PHP 12,000,000.00 capital with the following data: Expected revenue - PHP 5.8M/year Cost of Operation and Maintenance - PHP2.4/year Taxes and Insurance. - 2% of the first cost/year Expected earnings is 12% minimum Life of the equipment is 5 years with expected value of PHP1.2M after 5 years a. Determine the desirable investment using ROR method and AW method b. What are the ways and means to make it desirable investment c. In what case we should use the present worth and future worth method of economy study?
Net present value (NPV) of the project =Single payoff x PVIAF (10.20%, 9 years) - initial outlay = $6,947 x 0.42340 - $2,182 = $759.39 What's the equation for the bolded item?
You are considering an open-pit mining operation. The cash flow pattern issomewhat unusual since you must invest in some mining equipment, conductoperations for two years, and then restore the sites to their original condition.You estimate the net cash flows to be as follows: N Cash flow 0 -$1,600,0001 1,500,0002 1,500,0003 -700,000 What is the approximate rate of return of this investment?(a) 25%(b)38%(c) 42%(d)62%
A man is considering putting up his own enterprise, where an investment of 800,000Php will be required and will take 15 years to recoup . He estimates his annual sales at 800,000Php along with the following operating costs. Materials ............................. 160,000Php/ yearLabor ............................. 280,000Php/ yearOverhead ............................. (40,000 + 10% of sales) Php/ yearSelling Expense............................. 60,000Php/ yearThe man will give up his regular job paying 216,000 Php per year and devote all his time to the operation of his business, this will result in decreasing his labor cost by 40,000Php per year, material cost by 28,000Php per year and overhead cost by 32,000 Php per year. If the man expects to earn at least 20% of his capital, should he invest? solve in the present worth cost method
An investment project costs $100,000. ll is expected to have an annual net cash flow of $40,000 for 5 years. What is the project's payback period?(a) 2.5 years(b) 3.5 year(c) 4.5 years(d) 5 years