3.) Economic estimates for two alternatives are follows: A в FC 200,000 300,000 Annual Op. Cost 32,000 24,000 Labor Cost 50,000 32,000 3% 4% 10 Insurance 3% Payroll Tax Life 4% 10 If the MARR = 15%, compare the two alternatives. For alternatives with the same lives, the study period will lives of the altematives. Using PWC method, determine the PWC of cost for each alternative.
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- 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 the IRR for Product V only using 1% and 17% to 2 d.p.The Sloan Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow(I) Cash Flow(II) 0 –$ 55,000 –$ 18,900 1 25,000 10,150 2 25,000 10,150 3 25,000 10,150 a-1 If the required return is 10 percent, what is the profitability index for both projects? (Do not round intermediate calculations. Round your answers to 3 decimal places, e.g., 32.161.) a-2 If the company applies the profitability index decision rule, which project should the firm accept? Project I Project Il b-1 What is the NPV for both projects? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b-2 If the company applies the NPV decision rule, which project should it take? Project I Project IILipsion 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%
- 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)?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 ?The Weiland Computer Corporation is trying to choose between the following mutually exclusive design projects, P1 and P2:Year 0123 Cash flows (P1) -$53,000 27,000 27,000 27,000 Cash flow (P2) -$16,000 9,100 9,100 9,100a. If the discount rate is 10 percent and the company applies the profitability index (PI) decision rule, which project should the firm accept?b. If the firm applies the Net Present Value (NPV) decision rule, which project should it take?c. Are your answers in (a) and (b) different? Explain why?
- Suppose you sell a fixed asset for $125,000 when its book value is $139,000. If your company's marginal tax rate is 30%, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)? Group of answer choices a. $120,080 b. $129,200 c. $9,800 d. $14,000The Weiland Computer Corporation is trying to choose between the following mutually exclusive design projects, P1 and P2: Year 0 1 2 3 Cash flows (P1) -$53,000 27,000 27,000 27,000 Cash flow (P2) -$16,000 9,100 9,100 9,100 If the discount rate is 10 percent and the company applies the profitability index (PI) decision rule, which project should the firm accept? If the firm applies the Net Present Value (NPV) decision rule, which project should it take? Are your answers in (a) and (b) different? Explain why?XYZ, Inc. is evaluating several capital budgeting projects which are summarized in the table below. The cost of capital for XYZ is 8%. Project A B C D NPV $1,000 $1,500 $1,200 ($400) IRR 25% 12% 15% 5% Payback Period (years) 4.0 3.0 2.0 1.5 If these projects are mutually exclusive, then XYZ should accept project(s) Question 5 options: A B C D
- Based on the information below which projects will we choose based on weighted average profitabiltity Index if we only have OMR500,000 to invest? Project NPV Investment PI A 130,000 200,000 B 241,250 225,000 C 294,250 275,000 D 262,000 250,000 Select one: a. WAPI AD b. WAPI AB c. WAPI BD d. WAPI BCWhat is the IRR for the following project if its initial after-tax cost is R5 000 000 and it is expected to provide after-tax operating cash inflows of R1 800 000 in year 1, R1 900 000 in year 2, R1 700 000 in year 3 and R1 300 000 in year 4? What is the correct answer? A. 15.57% B. 0.00% C. 13.57% D. None of the aboveSheffield Corp. reported the following for 2022: Income tax expense $68000 Contribution margin 220000 Controllable fixed costs 90000 Interest expense 60000 Total operating assets 650000 What is the controllable margin?