A cash flow sequence has a receipt of $20.000 today, followed by a disbursement of $17,000 at the end of this year and again next year, and then a receipt of $13.100 three years from now. The MARR is 6 percent. a. What is the ERR for this set of cash flows? b. What is the approximate ERR for this set of cash flows? c. Would a project with these cash flows be a good investment? a. The ERR is%. (Round to two decimal places as needed.)
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- A piece of equipment now is use at a plant has a market value of 12,000. This market value is expected to decline by 40% per period (from the previous period) until it reaches zero at the end of period 4. The forecasted operating and repair cost of the equipment for the next period is 35,000 and this is expected to grow at a rate of 20 percent per period. Applying an interest rate of 12%, answer the questions below. a. What is the lowest period equivalent cost for keeping the equipment in operation for the economic service life? b. What is the economic service life?Consider the following analysis of two alternatives, X & Y: YR X Y 0 -200 -1000 1 50 250 2 50 250 3 50 250 4 50 250 5 100 300 The MARR is 10%. Calculate the incremental rate of return in percent to the nearest 0.1 percent.Consider the following analysis of two alternatives, X & Y: YR X Y 0 -200 -1000 1 30 250 2 30 250 3 30 250 4 30 250 5 100 400 The MARR is 10%. Calculate the incremental rate of return in percent to the nearest 0.1 percent. Please explain each step
- Give typing answer with explanation and conclusion A small company purchased now for $120,000 will lose $300 each year for the first four years. An additional $600 in the company in the fourth year will result in a profit of $9500 each year from the fifth through the twelfth year. At the end of 12 years, the company can be sold for $135,000. a) Draw the cash flow diagram b) Determine the IRR for this project. c) Calculate the FW if MARR is 5%. d) Calculate the ERR when ε = 7%.Most likely estimates for a project are as follows. MARR 12% per year Useful life 9 years Initial investment $4,000 Receipts - Expenses (R-E) $1,100/year Click the icon to view the relationship between the PW and the percent change in parameter. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. (a) Determine whether the statement "An initial investment of $4,600 keeps the investment economical." is true or false. True O False (b) To which variable is the PW most sensitive to? OA. Initial Investment O B. Receipts Expenses OC. Usefule lifeSolo Corporation is evaluating a project with the following cash flows: Year 0,1, 2, 3, 4, 5 Cash Flow $ -29,600; 11,800; 14,500 ; 16,400; 13,500 and -10,000. The company uses an interest rate of 10 percent on all of its projects. Calculate the MIRR of the project using all three methods. a. MIRR using the discounting approach. b. MIRR using the reinvestment approach. c. MIRR using the combination approach.
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