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- A project is being considered that has a first cost of $12,500, creates $5000 in annual cost savings, requires $3000 in annual operating costs, and has a salvage value of $2000 after a project life of 3 years. If interest is 10% per year, which formula calculates the project’s present worth? (a) PW = 12,500(P/F, 10%, 1) + (− 5000 + 3000) (P/A, 10%, 3) − 2000(F/P, 10%, 3) (b) PW = − 12,500 + (5000 − 3000) (P/A, 10%, 3 ) − 2000(P/F, 10%, 3) (c) PW = 12,500(F/P, 10%, 3) + (5000 − 3000) (F/A, 10%, 3) + 2000 (d) PW = − 12, 500 + 5000(P/A, 10%, 3) − 3000 (P/A, 10%, 3) + 2000(P/F, 10%, 3)IPS Corp. will upgrade its package-labeling machinery. It costs $850,000 to buy the machinery and have it installed. Operation and maintenance costs, which are $11,000 per year for the first 3 years, increase by $1000 per year for the machine’s 10-year life. The machinery has a salvage value of 12% of its initial cost. Interest is 25%. What is the future worth of cost of the machinery? dont use excel. dont write answer in a paper becouse of handwriting. thankscost and income particular robot A robot B robot c first cost 55000 58000 53000 operating and management cost 3000/year 4500/year 4000/year expected income 40000/year 44000/year 38000/year estimated salvage 4000 6000 4000 assume the technologicle life of 6 year .desire interest of 12% ,which robot seems to preferable using present worth criteria.
- Don Garlis is a landscaper. He is considering the purchase of a new commercial lawn mower, either the Atlas or the Zippy. Construct a choice table for the interest rates of 0-100%. Atlas Zippy Initial cost $6,700 $16,900 Annual maintenance cost $1,500 $1,200 Annual benefit $4,000 $4,500 Salvage value $1,000 $3,500 Useful live, in years 3 6An investor is considering two mutually exclusive projects. She can obtain a 6% before tax rate of return on external investements but she requires a minimum attractive rate of return or 7% for these projects. Use a 10 year analysis period to compute the incremental rate of return from investing in Project A rather than Project B. Project A Project B initial $58500 $48500 net uniform annual income 6648 0 salvage value 10 yrs hence 30000 138000 computed rate of return 8% 11%Evaluate to total present worth of all the cash-flow of machine ABC for an interest rate of 10% per year. Relevant costs are as follows investment cost = $18,000 useful life = 20 years Market value = $5000 Annual operating expenses =$250 Overhead cost end of the 7th year = $500 Overhead cost end of the 14th year = $800
- 5 a. What is the payback period (Be exact to 1 decimal place) of the cash flow below? (I am attaching an image for the figure)5 b. A project has the following costs and benefits. What is the payback period (Be exact to 1 decimal place)? Year Cost Benefits0 300001-3 15,000 each year 12,000 each year4 7000 30005-10 11,000 each year8- The life of a project is 10 years. An equipment is needed for this project. Two alternatives are available. Equipment A has an initial cost of $5000.00, an annual maintenance cost of $300.00, and a salvage value of $800.00 after 5 years. Equipment B has an initial cost of $7000.00, an annual maintenance cost of $400.00, lasts for 10 years and has no salvage value. If the interest rate is 6%: a) Equipment A should be purchased. b) Equipment B should be purchased. c) No equipment should be purchased. d) There is no difference in choosing between A or B.Methods of Economy Studies An investment of P 250,000 can be made in a project that will produce a uniform annual revenue of P 192,800 for 5 years and then have a salvage value of 10% of the first cost. Operation and maintenance will be P 72,000 per year. Taxes and insurance will be 4% of the first cost per year. The company expects capital to earn 20% before income taxes. Show whether or not the investment is justified economically using1. Present Worth (PW) method2. Future Worth (FW) method3. Annual Worth (AW) method4. Rate of Return (ROR) method5. Payback (Payout) method
- A five-year project has an initial fixed asset investment of $613,600, an initial net working capital investment of $22,200. The project will have an annual operating cash flow (OCF) of (-$76,540). The fixed asset is fully depreciated over the life of the project and has no salvage value. The net working capital will be recovered when the project ends. The required return is 11.7 percent. What is the project's equivalent annual cost, or EAC? O-$248,052.76 O-$182,309.18 O-$147,884.01 O $242,212.2210- A project needs $10000.00 expenditure at the end of 1st year and another $10000.00 at the end of 5th year. If the interest rate is 7%, what is the Equivalent Uniform Annual Cost (EUAC) of this project in 5 years? a) $4210.00 b) $1710.03 c) $4018.50 d) $2001.04ligthing first cost of investment is $120,000. annual mtnce expenses are expected to be $6600 for the first 22 years and $9000 for each year thereafter. N=infinety amt of time, interest,i=12% per year, what is the capatalized cost of this project? the annuity table for value N=22 as follows: F/P=12.1003 P/F=.0826 P/A=7.6446 I tried mutliple ways to show and I can't figure it out. the answer is $176,653. Any suggestions is greatly appreciated. Thanks
