A group of concerned citizens has established a trust fund that pays 6% interest compounded monthly to preserve a historical building by providing annual maintenance funds of $25,000 forever. Compute the capitalized-equivalent amount for these building maintenance expenses.
Q: CT Corp. is considering two mutually exclusive projects. Both require an initial investment of…
A: Net Present Value, or NPV, refers to the difference between present values of cash inflows and the…
Q: Consider a palletizer at a bottling plant that has a first cost of $150,000, operating and…
A: Given, i = 8% and n= 30 Annual equivalent cost = first cost(a/p,8%,30) - 17,500 + 25,000(a/f,8%,30)…
Q: A new municipal refuse-collection truck can be purchased for $84,000. Its expected useful life is…
A: (Q) A new municipal refuse-collection truck can be purchased for $84,000. Its expected useful life…
Q: Use Excel® to solve the following problem. An eight-year life project has an initial capital…
A: Given, An eight year life project Initial Capital expenditure= $450,000 Annual Income=$300,000 at…
Q: A new machine was installed by a company at a total cost of 145,000 and projected to have a useful…
A: Given capital cost = 145000 Salvage value = 14500 Annual rate of interest = 18 % time = 15 years
Q: A new boiler was installed by a textile plant at a cost of P 3M and projected to have a useful life…
A: To find the value of capitalized cost, first, we convert all values into an equivalent annual…
Q: Charlie has a project for which he had determined a present value of $56,740. He now has to…
A: IRR stands Internal Rate of Return is technique of capital budgeting which used in financial…
Q: You invest in a piece of equipment costing $40,000. The equipment will be used for two years, and it…
A: STEP1 Capital cost is found out by: Capital Cost=price-salvage valuei(1+i)n(1+i)n-1+salvage value…
Q: A municipal council purchased a water supply pump at a cost of RM 200,000 two years ago to be useful…
A: Salvage value is the estimated resale value of an asset at the end of its useful life Here, we…
Q: Consider an investment project with the following repeating cash flow patternevery four years…
A: The given information: First and second year deposit is 100 Third and fourth year deposit is 60…
Q: For the following cash flows, the project may have up to: Select one: a. two ROR b. three ROR c.…
A: A cash flow statement is the financial statement of the company that shows us what amount of cash is…
Q: A large profitable corporation is considering a capital investment of $50,000. The equipment has a…
A: Given that; Initial investment is $50000. Yearly revenue is $44000. Yearly expenses are $14000. Rate…
Q: The project's economic study predicts annual investments of R$300,000,000.00 during three years of…
A: The difference between the current value of cash inflows and withdrawals over a period of time is…
Q: An investment in a new piece of equipment costing P 50,000 is expected to yield the following over…
A: Given, Equipment costing P 50,000 Life- 5 years Revenues (cash), P 40,000; operating costs (cash), P…
Q: Assume no residual market value for the plant. (X1= $100 and X2=8%) a. What is the simple payback…
A: The payback period is a simple calculation of time for the initial investment to return. · It…
Q: A computerized wood lathe, costing P25,000, will be used to make ornamental parts for sale. Receipts…
A: Given initial cost = 25000 P Reciepts each year = 60000 P Costs = 55000 P Salvage value = 9000 Time…
Q: At 6%, find the capitalized cost of a bridge whose cost is P250M and life is 20 years, if the bridge…
A: In economics, present values refer to the current value of a future stream of cash flow. Net present…
Q: You are considering a project with the following financial data: Required initial investment at n =…
A: Annual revenue can be calculated as follows:
Q: Covington Corporation purchased a vibratory finishing machine for $20,000 in year 0. The useful life…
A: Salvage value is the assessed book value of a resource after depreciation is finished, in light of…
Q: 5.25 Consider an investment project, the cash flow pattern of which repeats itself every five years…
A: Compound interest (or change of integrity interest) is interest computed on a deposit or loan's…
Q: A piece of equipment has an initial cost of $150,000. The market value at the end of each of the…
A: Equivalent Annual Cost (EAC) is defined as the cost of operating, owning and maintaining an asset…
Q: A proposed project will require the immediate investment of $50,000 and is estimated to have…
A: Using Excel for explanation
Q: t 6%, find the capitalized cost of a bridge whose cost is P250M and life is 20 years, if the bridge…
A: Cost = 250M n = 20 years rebuilt cost = 100M
Q: What is the capitalized worth of a project that has an indefinitely long study period and dollar…
A: According to the Cash Flow Diagram, these cash flows repeat after every 5 years, for an indefinite…
Q: Vita Pharmaceutical Co. is considering four proposals for the expansion of its dietary supplements…
A: Given information 4 dietary supplement products For P1 Initial investment=P13M Annual receipts=1.5M…
Q: Use Excel® to solve the following problem. An eight-year life project has an initial capital…
A: Given, An eight year life project Initial Capital expenditure= $450,000 Annual Income=$300,000 at…
Q: You have a project with the net cash flow summarized below. The project is not suitable for direct…
A: The reinvestment rate is the return a financial backer hopes to make subsequent to reinvesting the…
Q: A project has a service of five years with the initial investment outlay of$180,000. If the…
A:
Q: If you invest $10,000 now into a project that will yield net revenues of $1,327 at the end of each…
A: IRR is calculated using excel as follows: Ms Excel -formula-Irr
Q: You are considering the following project: It pays you $2,500 at the end of the first year, costs…
A: Introduction: The hurdle rate, conjointly referred to as the minimum acceptable rate of come, is…
Q: Determine the capitalized cost of a research laboratory which requires Php 4,500,000 for original…
A: First Cost = 4500,000 Cost per year till year 6 = 110,000 Cost per year from 7 year onwards =…
Q: A California utility firm is considering building a 50-megawatt geothermalplant that generates…
A: Given information : Price of product = $85 million Income tax = $6 million % of…
Q: You are faced with making a decision on a large capital investment proposal. The capital investment…
A: Initial Investment = 640,000 Annual Revenue = 180,000 Expense after 1 year =42000 Expense decreasing…
Q: Giving the following information on machine A and machine B and assuming an 8.6% MARR, which…
A: Both the machines have an equal lifetime, so to determine which machine will be selected PW method…
Q: Capitalized cost: Select one: a. is the future sum needed to provide a perpetual series of cash…
A: capitalized cost is a special kind of present worth analysis that chooses between alternatives with…
Q: What is the capitalized cost of a structure that requires an initial investment of P1,500,000.00 and…
A: The application of economic ideas to the evaluation of engineering design and the selection of…
Q: A chemical plant worth P 110M has an estimated life of 6 years and a projected scrap value of P 10M.…
A: A decrease in the book value of fixed assets is known as depreciation. The loss of value of assets…
Q: Your company is considering purchasing a new CNC machining center. The net benefits in the first…
A: In economics, present value refers to the current value of a future stream of cash flow. Future…
Q: CASH FLOW DIAGRAM Calculate the capitalized cost of a project that has an initial cost of P8,000,000…
A: Solution given below,
Q: Question (1): Mark "True" for the correct phrases and "False" for the incorrect phrases * True False…
A: PLEASE BE NOTED THAT AS PER THE BARTLEBY GUIDELINES I HAVE SOLVED THE FIRST THREE SUB-PARTS. PLEASE…
Q: Required information Three alternatives are being evaluated based on 7 different attributes, all of…
A: Attributes are the varied factors that are a part of higher cognitive process when chief needs to…
Q: deposit of P 110,000 was made for 31 days. The net interest after deducting 20% withholding tax is…
A: A) Given P = 110,000 Tax was 20% Time = 31 days Required rate of interest annually. => Total…
Q: You are considering two mutually exclusive financial opportunities. Project A requires an initial…
A: PROJECT A Initial Outlay : 100,000 Returns /year : 15,000 Residual Value : 100,000 Project Life: 12…
Q: A city water and waste-water department has a four-year-old sludge pump that was initially purchased…
A: Given that; Initial amount of pump = $65,000 Selling price = $36,500 Purchase price of replacement…
Q: A newly constructed water treatment facility cost $2 million. It is estimated that the facility will…
A: The initial cost of treatment = $2 millions The revamping cost after 3 years = $1 millions Annual…
Q: A bridge that was constructed at a cost of P500,000 is expected to last 20 years, at the end of…
A: Constructed cost = 5,00,000 renewal cost = 1,00,000 Annual Maintenance = 45,000 interest rate = 6%…
Q: Covington Corporation purchased a vibratory finishing machine for $20,000 in year 0. The useful life…
A: The measure that depicts the current income stream of cash flows discounted at a specified rate of…
Q: Determine the capitalized cost of a machine that was purchased for P100, 000 and requires annual…
A: Capitalized cost in case of infinite period. Capitalized cost is the present worth of a constant…
A group of concerned citizens has established a trust fund that pays 6% interest compounded monthly to preserve a historical building by providing annual maintenance funds of $25,000 forever. Compute the capitalized-equivalent amount for these building maintenance expenses.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
- A group of concerned citizens has establisheda trust fund that pays 7.5% interest, compoundedmonthly, to preserve a historical building by providing annual maintenance funds of $140,000 forever.Compute the capitalized equivalent amount for thesebuilding maintenance expenses.Calculate the capitalized cost of an equipment maintained at a rate of 6% every year for P10,000, replaced every 3years for P25,000 at the same rate, and bought for P110,500. Please solve using economics formula.A project requires an initial investment of 45,000$, has a salvage value of 11,000$ after six years, incurs annual expenses of 9,000$, and provides an annual revenue of 16,000$. Using MARR of 10%, determine the AW of this project detailed answer please
- Consider the following two mutually exclusive service projects with projectlives of three years and two years, respectively. (The mutually exclusive service projects will have identical revenues for each year of service.) The interest rate is known to be 12%. Net Cash Flow End of Year Project A Project B 0 -$1,000 -$800 1 -400 -200 2 -400 -200+0 3 -400+200 If the required service period is six years and both projects can be repeated with the given costs and better service projects are unavailable in the future, which project is better and why? Choose from the following options:(a) Select Project B because it will save you $344 in present worth over the required service period.(b) Select Project A because it will cost $1,818…If a project costs $90,000 and is expected to return $24,500 annually, how long does it take to recover the initial investment? What would be the discounted payback period at i=14%? Assume that the cash flows occur continuously throughout the year. The payback period is___________years. (Round to one decimal place.)The annual benefits of $4,000 every year for three years may be obtained for an investment on a production equipment costing $20,000 with a salvage value of $5,000. If the interest rate is 6%, choose the right equation to determine the NPW. Group of answer choices NPW = -20,000 + 4,000(P/A, 6%, 3) + 5,000(P/F, 6%, 3) NPW = -20,000(P/F, 6%, 3) + 4,000(P/A, 6%, 3) + 5,000(P/F, 6%, 3) NPW = 20,000(F/P, 6%, 3) + 4,000(F/A, 6%, 3) + 5,000 NPW = 20,000(P/F, 6%, 3) + 4,000(F/A, 6%, 3) + 5,000
- You invest in a piece of equipment costing $40,000. The equipment will be used for two years, and it will be worth $15,000 at the end of two years. The machine will be used for 4,000 hours during the first year and 6,000 hours during the second year. The expected savings associated with the use of the piece of equipment will be $28,000 during the first year and $40,000 during the second year. Your interest rate is 10%.(a) What is the capital recovery cost?(b) What is the annual equivalent worth?(c) What is net savings generated per machine-hour?A new machine was installed by a company at a total cost of 145,000 and projected to have a useful life of 15 years. At the end of its useful life, it is estimated to have a salvage value of 14,500. Determine the capitalized cost if interest is 18% compounded annually.A machine that costs $12,000 is expected to operate for 10 years. The estimated salvage value at the end of 10 years is $0. The machine is expected to save the company $2,331 per year before taxes and depreciation. The company depreciates its assets on a straight-line basis and has a marginal tax rate of 40 percent. The firm’s cost of capital is 14 percent. What is the internal rate of return (IRR) for the machine? Based on the IRR criterion, should this machine be purchased?
- An electric cooperative is considering the use of a concrete electric pole in the expansion of its power distribution lines. A concrete pole costs P18,000 each and will last 20 years. The company is presently using creosoted wooden poles which cost P12,000 per pole and will last 10 years. If money is worth 12%, which pole should be used? Assume annual taxes amount to 1% of first cost and zero salvage value in both cases.Consider the following two mutually exclusive investment projects: Determine the range of MARR where Project 2 would be preferred over Project 1 with "do-nothing" alternative.(a) MARR ≤ 11.80%(b) MARR ≥ 11.80%(c) 11.80% ≤ MARR ≤ 18.88%(d) MARR ≤ 18.88%You are given the following financial data about a new system to be implemented at a company:(1) Investment cost at n = 0: $23,000(2) Investment cost at n = 1: $18,000(3) Useful life:10 years(4) Salvage value (at the end of 11 years): $7,000(5) Annual revenues: $19,000 per year(6) Annual expenses: $6,000 per year(7) MARR: 10%Note: The first revenues and expenses will occur at the end of year 2.(a) Determine the conventional-payback period.(b) Determine the discounted-payback period.