A company that makes food-friendly silicone (for use in cooking and baking pan coatings) is considering four independent projects shown, all of which can be considered to be viable for only 10 years. The company’s MARR is 15% per year. Project A B C D First cost, $ −1,400 −2,000 −5,000 −7,000 Annual net income, $/year 240 400 1000 1,200 Salvage value, $ 5 6 8 7 Determine which projects to implement. Financial values are in $1000 units. The present worth of project A is $ , so project A is (Click to select) accepted rejected . The present worth of project B is $ , so project B is (Click to select) rejected accepted . The present worth of project C is $ , so project C is (Click to select) rejected accepted . The present worth of project D is $ , so project D is (Click to select) accepted rejected
A company that makes food-friendly silicone (for use in cooking and baking pan coatings) is considering four independent projects shown, all of which can be considered to be viable for only 10 years. The company’s MARR is 15% per year. Project A B C D First cost, $ −1,400 −2,000 −5,000 −7,000 Annual net income, $/year 240 400 1000 1,200 Salvage value, $ 5 6 8 7 Determine which projects to implement. Financial values are in $1000 units. The present worth of project A is $ , so project A is (Click to select) accepted rejected . The present worth of project B is $ , so project B is (Click to select) rejected accepted . The present worth of project C is $ , so project C is (Click to select) rejected accepted . The present worth of project D is $ , so project D is (Click to select) accepted rejected
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 14P
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- A company that makes food-friendly silicone (for use in cooking and baking pan coatings) is considering four independent projects shown, all of which can be considered to be viable for only 10 years. The company’s MARR is 15% per year.
|
Project |
A |
B |
C |
D |
|
First cost, $ |
−1,400 |
−2,000 |
−5,000 |
−7,000 |
|
Annual net income, $/year |
240 |
400 |
1000 |
1,200 |
|
Salvage value, $ |
5 |
6 |
8 |
7 |
Determine which projects to implement. Financial values are in $1000 units.
The present worth of project A is $ , so project A is (Click to select) accepted rejected .
The present worth of project B is $ , so project B is (Click to select) rejected accepted .
The present worth of project C is $ , so project C is (Click to select) rejected accepted .
The present worth of project D is $ , so project D
is (Click to select) accepted rejected
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