3) Data for 2 alternatives are given below, determine the cost of alternative B so that the two alternatives will be equally desirable. Assume an interest rate of 15%. Use benefit cost ratio analysis Alternatives Cost P100kX Salvage Value 10k 16k Annual Benefit 28k 30k Life (years) 10 12
Q: Data for two alternatives are as follows: Alternatives A B Investment P35, 000 P50, 000 Annual…
A: NPV is the difference between the Present Value of Cash Inflows and Initial Investment. A project…
Q: Determine the FW of the following engineering project when the MARR is 14% per year. Is the project…
A:
Q: Data for two alternatives are as follows: A в INVESTMENT 35,000 50,000 ANNUAL BENEFITS 20,000 25,000…
A: IRR: In capital budgeting, the internal rate of return, or IRR, is a metric that is used to assess…
Q: Two alternatives have been identified. Alternative A has a first cost of $10,000 and benefits of…
A: Payback period: It can be defined as the time taken by an investment before it starts providing…
Q: Kenny, Inc. has identified the following two mutually exclusive projects. Project A -$25,000 20,000…
A: Capital budgeting indicates the evaluation of the profitability of possible investments and projects…
Q: 1. Consider the following alternatives: First cost 5000 10,000 Annual Maintenance 500 200…
A: Rate of return analysis is done to choose a project with a better return on the cost of the…
Q: The following data have been estimated for two feasible investments, A and B, for which revenues as…
A:
Q: Using Net Present Worth Analysis which alternative is best? Use an interest rate ot 8%. Alternative…
A: Interest rate = 8%
Q: Of the following mutually exclusive alternatives, select the best one by rate-of-return analysis…
A: For such a lengthy calculation, the use of excel can give fast and accurate results. With given MARR…
Q: Questions which require graphical solutions, please use Excel and submit Tables and Graphs with your…
A: PW is the current worth of cash flows that are expected to happen in the future.
Q: There are three alternatives with the following details: A B Investment cost ($) 50 150 110 Uniform…
A: Note: The question above has been solved using the discounted payback period technique since the…
Q: Determine the B/C ratio for the following project. First Cost P100, 000 Project life, years 5…
A: Benifits = present value of cash inflows Net annual cash inflows = 60000 - 22000 = 38000 PV of…
Q: Consider two mutually exclusive alternative. Construction a choice table using PW for interest rate…
A: PW means PV of net benefit arises in the future from the project. It can be simply computed by…
Q: Given the financial data in the table below for two mutually exclusive alternatives, determine the…
A: The internal rate of return method considers the time value of money, the initial cash…
Q: Determine the ROR, AW, and PP of the following engineering project when the MARR is 20% per year. Is…
A: Capital budgeting is a process of determining the profitability of different capital projects. With…
Q: Kamty Karzis evaluating a project (Project A that costs S325.000 and is expected to generate…
A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…
Q: A defender and a challenger are considered in a replacement analysis. The following decision tree…
A: The defender will be replaced at minimum cost and more benefit. Calculation of PVAF for 5 years at…
Q: You are faced with a decision on an investment proposal. Specifically, the estimated additional…
A: Capital Budgeting and capital budgeting techniques: The process of evaluating several prospective…
Q: Evaluate the two alternatives A and B and decide the economic justified alternative using: Present…
A: Investment appraisal is the branch of financial management which deals with evaluating potential…
Q: Compare the following alternatives based on the rate of return analysis assuming that the MAAR is…
A: Initial costs A = 60 B = 90 Annual operation and reparation A = 15 + 5 = 20 B = 8 +2 = 10 This…
Q: Evaluate the following alternatives through the VPN, VAUE and IRR of the best option. To evaluate…
A: Alternative investments comprises of private equity, futures trading, hedge funds, commodities and…
Q: Given the following three mutually exclusive alternatives, Alternative A •.. B C Initial Cost $50…
A: Let initial cost = C Annual benefits = A n = 5 years i = 10%
Q: In comparing alternatives, I and J by the present worth method, the equation that yields the present…
A: Given in this question is the information regarding the Alternatives I and J . capitalized worth…
Q: Two different alternatives are being compared. Using Net Present Worth Analysis which alternative is…
A: Ne Present Worth: It Is the difference between the present value of cash outflow and inflows over…
Q: BENEFIT-COST RATIO ANALYSIS Solve the following problems and show complete solutions. 1. Determine…
A: In order to be equally desirable the net present value of both the alternatives need to be equal.…
Q: You are considering an investment in a project that has an initial cost of $150,000; annual , cost…
A: Minimum need annual revenue will be calculated using excel goal seek function
Q: Assume that it costs $1,000 to start a project. If the project will give $400 profit in the first…
A: Payback period =initial invetsment / Cashflows
Q: Consider the three small mutually exclusive investment alternatives in the table below. The feasible…
A: As per bartlebyguidelines, "Since you have posted a question with multiple sub-parts, we will solve…
Q: Three mutually exclusive design alternatives are being considered. The estimated cash flows for each…
A: The capital budgeting is a technique that helps to analyze the profitability of the project.
Q: Determine the FW of the following engineering project when the MARR is 16% per year. Is the project…
A: The future worth analysis is a kind of quantitative analysis that helps in evaluating the capital…
Q: 1. Compare the following alternatives using the Net Present Worth (NPW) method. Rate 5% per year.…
A: Annual rate = 5%
Q: The construction of a bypass road needs a capital investment of $200,000 and $10,000 would be…
A: The Discounted Payback Period: The discounted payback period is an indicator that gives the number…
Q: Two mutually exclusive alternatives have the estimates shown below. Use annual worth analysis to…
A: Present Value: The present value is the current value of a series of fixed payments. The series of…
Q: 1. Determine which of the two (2) inveatment projecta your supervisor ahould choose, given a…
A: Given information : Year Project 1 Project 2 1 100000 75000 2 100000 75000 3 100000 75000…
Q: The construction of a bypass road needs a capital investment of $200,000 and $10,000 would be…
A: The following information is given in the question Particulars Amount Investment 2,00,000…
Q: Two mutually exclusive alternatives have the estimates shown below. Use annual worth analysis to…
A: Mutual exclusive alternative: The first stage in doing an economic analysis of two or more…
Q: The most possible values of an investment project are as follows: First cost, $ 300,000 Annual…
A: Payback period with time value ot discounted payback period is calculated by calculating cumulative…
Q: Alternatives A B Cost x P3,200 Salvage Value 900 600 Annual Benefit 1150 720 Life (years) 18
A: The benefit-cost ratio is an indicator that shows the relationship between the relative costs and…
Q: For the following two alternatives, if the MARR is 10% per year (a)which one has a shorter payback…
A: Net present value (NPV) is the value of all the cash flow of the investment (positive and negative)…
Q: A project requires an investment cost of P 600 000 with 5 – year useful life, no salvage value, and…
A: To find the net cash inflows, we will have to do the calculations step by step. We will use the…
Q: Compare the following investment alternatives using PW analysis and an annual interest rate of %12,…
A: Effective interest rate is the one which caters the compounding periods during a payment plan. It is…
Q: Consider the following alternatives: B Initial cost $300000 $400000 $700000 Life 5 years 7 yeаrs 13…
A: Project A Initial cost = $300000 Life=5 Project B Initial cost=$400000 Life=7 Project C Initial…
Q: . Q1. Consider four mutually exclusive alternatives, each having an 8-year useful life A B C D…
A: Solution Concept In case of mutually exclusive projects only one can be selected In the capital…
Q: Compare the alternatives shown below on the basis of their capitalized costs, using an interest rate…
A: Capital budgeting The technique business uses for determining which alternative/ project it should…
Q: Details for two project proposals are shown below: Initial Cost Project Life (years) MARR (% per…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: You are considering the following two mutually exclusive projects. The required return on each…
A:
Q: Proposal A Proposal B Benefits per year Benefits per year Probability $18,000 | Conservative=0.25…
A:
Q: Determine the B/C ratio for the following project. First Cost = P100, 000 Project life, years = 5…
A: B/C ratio means present value of benefits divided by the Present value of costs. B/C ratio = Present…
Step by step
Solved in 3 steps
- Consider the following two investment alternatives. Determine the range of investment costs for Alternative B (i.e., min. value < X < max. value) that will convince an investor to select Alternative B. MARR = 10% per year, and other relevant data are shown in the following table. State clearly any assumptions that are necessary to support your answer.• Sienna plc has deduced the net present value of a potential investment project at two discount rates. The relevant data are as follows: Discount rate 20% 30% NPV (£000) 60 (120) What is the approximate internal rate of return of the project? A 16.7% B 23.3% C 26.6% D 33.3%Which alternative should be selected using the incremental rate of return analysis, if MARR =11.0%? Do- nothing A B C D First Cost 0 $10,000 $4000 $10,000 $7000 Annual benefit 0 1,806 828 1,880 1,067 Life 10 Years ROR 12.5% 16.0% 13.5% 8.5% a. B, because its ROR is the highest b. Something other than C, because C costs the most initially c. C, because the C-B increment has a ROR of 11.78% and the A-B increment has a ROR of 10.5% d. C because C has the highest annual benefit
- Lipsion Ltd company is thinking about investing in one of two potential new productsfor sale. The projections are as follows: year revenue/ product s revenue/ product v0 (150,000) outlay (150000) outlay1 14000 150002 24000 253333 44000 520004 84000 63333 Calculate NPV of both products (to 1 d.p.) assuming a discount rate of 7%. Then decide which product should be selected and why ?2. Your firm is considering the following 3 mutually exclusive alternatives. Interest rate is10%. A B CInitial Cost $35,000.00 $21,000.00 $42,000.00Annual Benefit $4,200.00 $3,300.00 $5,000.00Salvage value 0 $1,000 $1500Project life Forever 20 year 50 a. Calculate the Benefit-Cost ratio of each projectb. Which of the 3 alternatives should be selected using B/C ratio analysis (show yourwork)?Consider the following two mutually exclusive projects: If the discount rate is 10%, what are the NPV of Project A and the IRR of Project B? Cash Flows ($) Project C0 C1 C2 C3 A -90 +60 +50 0 B -100 0 0 +140 Multiple Choice Then NPV for project A is $5.9 and the IRR for project B is 11.9% Then NPV for project A is $8 and the IRR for project B is 9% Then NPV for project A is $20 and the IRR for project B is 11.9% Then NPV for project A is $5.9 and the IRR for project B is 11.9%
- Consider the following two projects: (a) Calculate the profitability index for A1 and A2 at an interest rate of 6%.(b) Determine which project(s) you should accept (1) if you have enough money to undertake both and (2) if you could take only one due to a budget limit.Suppose an investment has an initial capital cost of $1100, an ongoing cost of $6.50 per year and an annual benefit of $80. If the project lasts for 20 years and the discount rate is 7%, the internal rate of return is: Provide your answer in percentage form (e.g. an IRR of 17.66% should be entered as 17.66) to 2 decimal places. Do not include any $ or % 's in your response.For the following table, assume a MARR of 15%per year and a useful life for each alternative of eightyears which equals the study period. The rank-orderof alternatives from least capital investment to greatestcapital investment is Z → Y → W → X. Completethe incremental analysis by selecting the preferredalternative. “Do nothing” is not an option. (6.4)FE PRACTICE PROBLEMS 307Z → Y Y → W W → X! Capital −$250 −$400 −$550investment! Annual cost 70 90 15savings! Market 100 50 200value! PW(15%) 97 20 ???(a) Alternative W (b) Alternative X(c) Alternative Y (d) Alternative ZThe following mutually exclusive investment alternatives have been presented to you.
- d. If the required return is 8 percent, what is the NPV for project B? e. At what discount rate would the company be indifferent between these two projects?The NPV of a project is $8,000. If the IRR is 12%, which of the following is the required rate of return for the project? Group of answer choices A.12.00% B.none of these are possible answers C.15.97% D.11.75%Suppose that there are two alternatives as project I with initial cost of 50.000 TL. and project II with initial cost of 75.000 TL. You have MARR of 10%. If the incremental rate of return delta i* ( II - I )=4% then which project should you select?
