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
Q: Cash Payback Period, Net Present Value Method, and Analysis Elite Apparel Inc. is considering two…
A: * SOLUTION :- *(1a) Cash payback period The plant expansion = 2 years The retail store expansion…
Q: Consider the three small mutually exclusive investment alternatives in the table below. The feasible…
A: GIVEN MARR = 12% The three alternatives lets take a 10 years period for analysis. Lets consider…
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: Net present value (NPV) of the project =Single payoff x PVIAF (10.20%, 9 years) - initial outlay =…
A: The bolded item represents the present value interest factor(PVIAF) of an annuity is a factor that…
Q: The optimistic, most likely, and pessimistic estimates for a certain investment project are as shown…
A: Annual Worth = NPV/PVAF NPV = - Initial Investment + Annual Cash flow*(PVAF) + Market Value*(PVF)
Q: Consider the two investments with the following sequences of cash flows. At Marr of 15%. What is the…
A: Financial analysts use the internal rate of return (IRR) to determine the profitability of potential…
Q: A tunnel to transport water initially cost $1,000,000 and has expected maintenance costs that will…
A: Given Initial cost =$1,000,000 no. of years =6 years MARR=20% years maintenance cost1…
Q: Select the correct answer from the terms provided to complete the sentences below. There are more…
A: Answer - "Thank you for submitting the questions, But, we are authorized to solve only 3 subparts.…
Q: Maintenance cost for a small bridge with an expected 60 - year life are estimated to be $ 1,000 each…
A: The term "future capital maintenance" refers to the costs a business anticipates to expand in the…
Q: Determine the net present worth (NPW) of the cash flows given in table below for an investment…
A: Given: MARR=12% Initial Investment=$100K
Q: 1. Consider a palletizer at a bottling plant that has a first cost of $150,000, operating and…
A: Equivalent annual cost (EAC) is the yearly cost of owning and sustaining an asset calculated by…
Q: Consider the following two investment alternatives. Determine the range of investment costs for…
A: here we calculate the annual worth of both project and the best project as follow-
Q: Q10. The equation that will yield the external rate of return (ERR) of the following project i=…
A: In the time value of money, we defined ERR as the interest rate that balances the cash flow.
Q: Consider the following two mutually exclusive investment projects: Determine the range of MARR where…
A: Find the incremental cashflows by subtracting the cashflows of project 2 from project 1 for each…
Q: Choose between the two proposals below. (i=7% APR) $1,000 NPW. $800 A 환 0 1 2 YR NPW. B 0 A=$1,200 1…
A: proposal A Initial cost = 1000 Cash inflow in year1 = 800 Cash inflow in year2 = 1000 proposal B…
Q: A concrete pavement on a street would cost P 2M and would lasts for 5 years. Minor maintenance cost…
A: The answer is given below
Q: The cash flows for your firm's project are provided in the table below. When initially finding the…
A: As per our guidelines we are only allowed to answer 3 sub parts of a question . Kindly repost the…
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: A&M Corporation purchased a vibratory finishing machine for $20,000 in year 0. The machine's useful…
A: Expense: It means the cost of operations that a company incurs to generate revenue.
Q: A firm is considering the purchase of a new machine to increase the output of an existing production…
A: Production process: Consider the items you use on a daily basis: they were all made or manufactured…
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: 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: Consider the following cash flow profile and assume MARR is 10%/yr. Solve, a. Determine the ERR for…
A: (a) The formula to compute the economic rate of return is: ERR=Lower discount rate+NPV at lower…
Q: A Company is contemplating the purchase of a new milling machine. The purchase price of the new…
A: Given; Purchase price= $60000 Annual operating cost= $2675.40 Salvage value= $0 Revenue generated=…
Q: (CLO-6) "Project A has 10 years useful life, the discounted payback period for this project "project…
A: Payback period refers to the time in which the invested projects provides discounted returns which…
Q: There are two projects under consideration by the Rainbow factory. Each of the projects will require…
A: The answer is given below
Q: If ARORA-B =8%, which is > MARR of 6%, then we will keep project A and drop project B, even though…
A: The minimum acceptable rate of return, often abbreviated MARR, or hurdle rate, is the minimum rate…
Q: 3. Attach a complete solution. Draw the cash flow diagram. A manufacturing plant installed a new…
A: On a financial statement, a capitalised cost is an item that is allocated to the cost base of a…
Q: A new design of aircraft saves annually fuel consumption of 45,000 gallons of fuel costing $6 per…
A: Annual saving = 45,000 x $6 = $270,000
Q: XTR company is considering investing in Project Zeta or Project Omega. Project Zeta generates the…
A: Year Project Zeta Project Omega 0 -339 -230 1 197 120 2 312 100 3 355 200 4 192 120…
Q: Consider a proposed project that has the following costs and benefits. Using linear interpolation,…
A: Below is the given values: Amount received in 2nd, 3rd, and 4th year is same = 1500 Amount received…
Q: Q2. Consider the cash flow given in the following table. What is the value of the missing cash…
A: Cash flow is the movement of money in and out of a company. Cash received signifies inflows, and…
Q: A machine was bought three years ago for $200,000 with the expected life of 8 years and a salvage…
A: Given: Old machine: Cost=$200000, Salvage value=$20000, Life=8 years, Selling price=$100000, Annual…
Q: A firm is considering the purchase of a new machine to increase the output of an existing production…
A: We are going to apply repeatability assumption to make useful life of these projects equal and then…
Q: Covington Corporation purchased a vibratory finishing machine for $20,000 in year 0. The useful life…
A: Time period is denoted as ‘n’ and interest rate is denoted as ‘i’. Consider the following formula:
Q: #23 * Using NPW to Decide Between Competing Projects: Machine X has an initial cost of $12,000 and…
A: Given: Machine X: The initial cost for Machine X is = $12,000 The annual maintenance cost is = $700…
Q: A newly constructed bridge costs $15,000,000.The same bridge is estimated to need renovationevery 15…
A: The formula to calculate capitalized cost is given below: Where P is the principal sum, A is the…
Q: A concrete pavement on a street would cost P 10,000 and would last for 5 years with negligible…
A: Given; Cost of concrete pavement= P10000Time; n= 5 yearsCost of removal of old surface=P1000Interest…
Q: A person considers an inversion that saves 100,000 a year. annual taxes equal to 2% of its value per…
A: *Hi there , as you have posted multiple question as per our guidelines we will only solve the first…
Q: A bridge that was constructed at a cost of P 75M is expected to last 30 years, at the end of which…
A: Capitalized cost is the current worth of cash flows that will continue forever. Dams, bridges, and…
Q: Project P has a cost of $1,000 and cash flows of $300 per year for three years plus another $1,000…
A:
Q: SA-Steal invested in a project. The cash flow for the project is shown in the following tTable. Cash…
A: Discounted-Payback-Period(DPP) of a project tells us at what duration the project's…
Q: A bridge that was constructed at a cost of P500,000 is expected to last 20 years, at the end of…
A: Constructed cost = 5,00,000 renewal cost = 1,00,000 Annual Maintenance = 45,000 interest rate = 6%…
Q: Hydroflask is considering two new cap options for their water bottles. Using the table below, which…
A: The following are the cashflows of two caps. We calculate the net present value (NPV) of both…
Q: new engine was installed by a textile plant at cost of P and projected to have a useful life of 10…
A: *Answer:
Q: Q1: Use capitalize cost and annual worth analysis for a long-term public project you'd like to build…
A:
A project requires an initial investment of 45,000$, 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
Step by step
Solved in 2 steps
- A firm has the opportunity to invest in a project having an initial outlay of $20,000. Net cash inflows (before depreciation and taxes) are expected to be $5,000 per year for five years. The firm uses the straight-line depreciation method with a zero salvage value and has a (marginal) income tax rate of 40 percent. The firms cost of capital is 12 percent. Compute the IRR and the NPV. Should the firm accept or reject the project?A proposed project will require the immediate investment of $50,000 and is estimated to have year-end revenues and costs as follows: Year Revenue Costs 1 2 3 4 5 $ 75,000 90,000 100,000 95,000 60,000 $ 60,000 77,500 75,000 80,000 47,500 An additional investment of $20,000 will be required at the end of the second year. The project would terminate at the end of the 5th year, and the assets are estimated to have a salvage value of $25,000 at the time. Solve for the IRR of the project by PW using 15% and 16% rates. A. 15.68% B. 15.28% C. 15.88% D. 15.48%A California utility firm is considering building a 50-megawatt geothermalplant that generates electricity from naturally occurring underground heal. The binary geothermal system will cost $85 million to build and $6 million (including any income-tax effect) to operate per year. (Unlike a conventional fossilfuel plant, this system will require virtually no fuel costs.) The geothermal plant is to last 25 years. At the end of that time, the expected salvage value will be about the same as the cost to remove the plant. The plant will be in operation for 70% (the plant-utilization factor) of the year (or 70% of 8,760 hours per year). If the firm's MARR is 14% per year, determine the cost of generating electricity per kilowatt-hour.
- At 6%, find the capitalized cost of a bridge whose cost is P250M and life is 20 years, if the bridge must be partially rebuilt at a cost of P100M at the end of each 20 years a.) 265.3 b.) 295.3 c.) 245.3 d.) 254.3A start-up biotech company is considering making an investment of $100,000 in a new filtration system. The associated estimates are summarized below: Annual receipts $75,000 Annual expenses $45,000 Useful life 8 years Terminal book value (EOY 8) $20,000 Terminal market value $0 Straight-line depreciation will be used, and the effective income tax rate is 20%. The after-tax MARR is 15% per year. Determine whether this investment is an attractive option for the company.A California utility firm is considering building a 50-megawatt geothermalplant that generates electricity from naturally occurring underground heal. The binary geothermal system will cost $85 million to build and $6 million (including any income-tax effect) to operate per year. (Unlike a conventional fossil fuel plant, this system will require virtually no fuel costs.) The geothermal plant is to last 25 years. At the end of that time, the expected salvage value will be about the same as the cost to remove the plant. The plant will be in operation for 70% (the plant-utilization factor) of the year (or 70% of 8,760 hours per year). If the firm's MARR is 14% per year, determine the cost of generating electricity per kilowatt-hour.
- Cori's Meats is looking at a new sausage system with an installed cost of $495,000. This cost will be depreciated straight-line to zero over the project’s five-year life, at the end of which the sausage system can be scrapped for $73,000. The sausage system will save the firm $175,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $32,000. If the tax rate is 23 percent and the discount rate is 10 percent, what is the NPV of this project?Steve Company is considering replacing one of its machines. The available new model has a cost of $220,000, a 16-year life, and an AOC of $2,000. The machine must also be serviced every 4 years at a cost of $10,000. The machine can be salvaged at $45, 000. The MARR is 12% How much annual net income must be realized from the machine to recover the capital investment?You are considering a project with the following financial data: Required initial investment at n = 0: $50M Project life: 10 years Estimated annual revenue: $X (unknown) Estimated annual operating cost: $15M Required minimum return: 20% per year Salvage value of the project: 15% of the initial investmentWhat minimum annual revenue (in $M) must be generated to make the project worthwhile?(a) X = $26.64M(b) X = $28.38M(c) X = $32.47M(d)X = $35.22M
- #23 * Using NPW to Decide Between Competing Projects: Machine X has an initial cost of $12,000 and annual maintenance of $700 per year. It has a useful life of four years and no salvage value at the end of that time. Machine Y costs $22,000 initially and has no maintenance costs during the first year. Maintenance is $200 at the end of the second year and increases by $200 per year thereafter. Machine Y has a useful life of eight years and an anticipated salvage value of $5,000 at the end of its useful life. If the MARR is 6%, what is the approximate Net Present Worth (NPW) of machine X? A. -$28,563 B. -$25,852 C. -$32,085 D. -$22,318A 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.A hospital in The Upper Cumberland area bought a diagnostic machine at a cost of $40,000. Maintenance cost is expected to remain constant throughout the life of this machine at $2,000 per year. The salvage value is estimated to be “0” at the end of the useful life of 10 years. Determine the economic life of this machine. MARR = 10% A. 5 years B. 1 year C. 10 years D. 7 years