A project capitalized for ₱37,000 invested in depreciable assets will earn a uniform, annual income of ₱23209 in 10 years. The cost for operation and maintenance total ₱9,000 a year, and annual taxes and insurance will cost 4% of the investment. The company expects its capital to earn 12% before income taxes. Determine the total annual cost of the project Using the Annual Worth method
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A project capitalized for ₱37,000 invested in
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- An investment of P270,000 can be made in a project that will produce a uniform annual revenue of P85,400 for 5 years and then have a salvage value of 10% of the investment. Costs for operation and maintenance will be Php81,000 per year. Taxes and insurance will be 4% of the first cost per year. The company expects capital to earn not less than 25% before income taxes. A. Prove that the investment is not justifiable using FW Method.(Show the cashflow diagram if needed) A project is estimated to cost P100,000, lasts 8 years, and have a P10,000 salvage value. The annual gross income is expected to average P24,000 and annual expenses, excluding depreciation, will total P6,000. If capital is earning 10% before income taxes, determine if this is a desirable investment using PWM and FWM.PT POQ Indonesia plans to produce a new product that requires an initial investment of IDR 150 million and operational and maintenance costs of IDR 35000 per hour.In addition, the company must pay other costs of Rp. 75 million per year.Based on the time standard obtained from the study of work procedures and measurement techniques, it can be estimated that it takes 150 hours to produce 1000 units of product.Furthermore, it is also estimated that the price per unit of product is Rp. 15000 and the investment is for 10 years with a salvage value of zero.With a MARR of 20%, calculate how many units must be produced for the firm to break even.
- . A project requires an initial investment of BD 75,000, has a salvage value of BD 15,000 after 4 years, incurs annual expenses of BD 5,000. Using MARR of 10%, determine the CR of this project over the four years. Show your full steps with your final table.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. ROR method2. payout methodThe company uses a 10% discount rate and the total-cost approach to capital budgeting analysis. The working capital required under the new system would be released for use elsewhere at the conclusion of the project. Both alternatives are expected to have a useful life of ten years.1. The net present value of the overhaul alternative (rounded to the nearest hundred pesos) is: P(750,300) P(987,400) P(725,800) P(975,800) 2. The net present value of the new system alternative (rounded to the nearest hundred pesos) is: P(552,900) P(758,400) P(862,900) P(987,400)
- Another answer. A fixed capital investment of 12,000,000 pesos is required for a production plant and an estimated working capital of 3,000,000 pesos. Annual depreciation is estimated to be 15% of the capital investment. Determine the rate of return on the total investment and the length of time to recover it if the annual profit is 2,800,000 pesos. Show Complete solution on a clear paper.A fixed capital investment of 12 Million pesos is required for a production plant and an estimated working capital of 3 Million pesos. Annual depreciation is estimated to be 15% of the capital investment. Determine the rate of return on the total investment and the length of time to recover it if the annual profit is 2.8 Million pesos. Show Complete Solution on a clear paper.A company purchases a new filtration system by borrowing the $30,000 purchase price. The loan is to be repaid with 4 equal annual payments at an annual compound rate of 12%. It is anticipated that the system will be used for 9 years and then be sold for $2,000. Annual operating and maintenance expenses are estimated to be $9,000/year. A savings of $15,000/year is realized over the present system. The firm uses a MARR of 15% for its economic analyses. Determine PW, AW and FW.
- Choose True or False for each of the following statements: 1. Sensitivity analysis is concerned with determining how much variation infinancial data, the decision maker can have to affect the economic decision. 2. Useful life is a period of time that yields the minimum equivalent uniformannual cost of owning and operating as asset. 3. Depreciation is a reduction in value of an asset, which reflects its actualusage during ownership. 4. In an optimistic estimation of MARR, we expect to see a lower MARR thanthat of pessimistic. 5. If one of extreme FW values, i.e., optimistic and pessimistic scenarios, ofan alternative is positive and another one is negative, a go-decision ismade without further analysis. 6. Recovery period refers to the depreciable life of an asset. 7. Spider plot is used to show the amount of changes on the value of morethan one factor at a time. 8. The book value at the end of useful life might not be equal to the salvagevalue when declining balance with switchover to…Henredon purchases a high-precision programmable router for shaping furniture components for $190,000. It is expected to last 12 years and have a salvage value of $5,000. It will produce $45,000 in net revenue each year during its life. Corporate income taxes are 40 percent, and the after-tax MARR is 10 percent. Determine the ATCF for each year and the after-tax PW, AW, IRR, and ERR, if the router is kept for 12 years.It is required to have a fixed investment of Php 10,000,000.00 to a proposed Ice plant, and an estimated working capital of Php 2,000,000.00. The annual depreciation is estimated to be 10% of fixed investment. Determine the rate of return on the total investment and the payout period if the annual profit is Php 2,500,000.00 [ pls include graph and diagram if necessary. Thank you. ]