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- An electric cooperative is considering the use of a conicrete electric pole in the expansion of its power distribution lines A concrete pole costs 18.0o0 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 shoulcd be used? Assurne annual taxes amount to1 percerit of first cost and zero salvage value in both cases a) Use rate of return method b) if the maximum retum on investment is 20% what is the justifiable arnount that can be paid for concrete electric pole?When buying a luxury truck, three documents are signed, each one for $150,000.00, with expiration in one, two and three months. Instead, it is proposed to make two equal payments, the first in one month and the second in two months. Calculate the amount of each of the payments if the automaker collects a nominal 12.5% capitalized monthly.is considering a new 3- year - long project that would involve using specialized scanning software to scansubmitted screenshots in low resolution and convert them into high resolution text documents that there's currently astrong market for. Course Hero requires a 17 percent annual return on this uncertain project, high enough tocompensate for the underlying uncertainty of future cash inflows. A decision to accept the project would be followed byan immediate investment of $5.8 million into purchasing the software. At the end of the project Course Hero is hoping tobe able to find a different company in similar line of business that would be willing to pay $449, 400 for the software andits future ownership.other similar software, its value will be dropping over its economic life according to the 3- yearMACRS depreciation schedule. (See this MACRS Table) Course Hero pays taxes on its annual income and other taxablecash flows according to a 32 % tax rate. Course Hero estimates $5, 136, 000…
- This year is 2023. You have saved $20,000 in your savings account to buy a new home. In addition, you also plan to withdraw the maximum from your Registered Retirement Savings Account (RRSP) under the Home Buyer's Plan (HBP). What would be the minimum conventional mortgage you could assume? Select one: a. $220,000 b. $140,000 c. $175,000 d. $225,000You invested $100,000 in a project and received $40,000 at n = 1, $40,000 atn = 2, and $30,000 at n = 3 years. You need to terminate the project at the end of year 3. Your interest rate is 10%; what is the project balance at the time of termination?(a) Gain of $10,000(b) Loss of $8,039(c) Loss of $10,700(d) Just break evenAn industrial firm is considering purchasingseveral programmable controllers and automatingthe company’s manufacturing operations. It is estimated that the equipment will initially cost $120,000,and the labor to install it will cost $25,000. A servicecontract to maintain the equipment will cost $5,000per year. Trained service personnel will have to behired at an annual salary of $50,000. Also estimatedis an approximate $10,000 annual income-tax savings (cash inflow). How much will this investment inequipment and services have to increase the annualrevenues after taxes in order to break even? Theequipment is estimated to have an operating life of10 years with no salvage value because of obsolescence. The firm’s MARR is 12%
- Which equation below gives at10% interest the total EUAC of an asset with an initial cost of $30,000, an estimated salvage value of $12,000 after its 7 -year service lile a, O&M costs of $25,000 per year? EUAC=($30,000−12,000)(A/P,10%,7)+($12,000)(A/F,1006,7)+$25,000 EUAC=($30,000−12,000)(A/P,10%,7)+($12,000)(0.10)+$25,000(A/F,10%,7) EUAC=($30,000−12,000)(A/R,10%,7)+($12,000)(0.10)+$25,000 EUAC=($30,000−12,000)(A/P,10%,7)+$25,000) A certain warehouse is worth P1,650,000. The average value of the merchandise in the warehouse is P1,500,000. The annual insurance rate on the warehouse is 1% and the merchandise stored in the warehouse, 0.9%. A proposal for the installation of a fire sprinkler system is being consider. The system will cost P80,000 and will effect a savings of 70% in a both insurance premiums. Monthly maintenance is estimated to be P500 and annual taxes is P4,000 for the sprinkler system. The owners of the warehouse demand that the investment in such equipment be written-off within 10 years. Invested capital can be expected to earn a minimum return of about 17%. Would you advice the installation? (Uses ROR)Your company is considering the introduction ofa new product line. The initial investment required forthis project is $500,000, and annual maintenance costsare anticipated to be $45,000. Annual operating costswill be directly proportional to the level of productionat $8.50 per unit, and each unit of product can be soldfor $65. If the MARR is 15% and the project has a life of5 years, what is the minimum annual production levelfor which the project is economically viable? With Cash Flow Thank You
- Mustang Auto Parts, Inc. is considering one oftwo forklift trucks for its assembly plant.• Truck A costs $15,000 and requires $3,000 annually in operating expenses. It will have a $5,000salvage value at the end of its three-year servicelife.• Truck B costs $20,000, but requires only $2,000annually in operating expenses; its service life isfour years, at which time its expected salvage valuewill be $8,000.The firm’s MARR is 12%. Assuming that the trucksare needed for 12 years and that no significantchanges are expected in the future price and functional capacity of each truck, select the most economical truck on the basis of AE analysis.Compute for the Annual Worth of MEA1 and explain. Compute using the Annual Worth formula and WITHOUT using Excel sheets. Thank you. MARR = 12%ASAP please. Use up to 6 decimal places during solving for the answer. Write all numerical final answers round off up to TWO (2) decimal places. 4. I have purchased a machine worth P1,522,807.00. And it needs maintenance every 6 months starting from its purchased date for the first 10 years of its useful life. The maintenance cost is equivalent to the 2% of the total machine cost. How much money should be prepare today to finance the requirement if the interest rate is 0.10 compounded quarterly?