brary n Use Re MARR Projec estment rice per WELC a) Use Repeatability Assumption to compare between three alternatives X. (MARR=18% per year). Project Investment cost Production rate per year Price unit per Annual expenses Salvage value Useful life (years) A B $90,000 $50,000 20,000 24,000 $6 $2.8 $6.000 $5.000 $10,000 3 C $35.000 18.000 $4 $4.000 $18.000 6
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- Compare the alternatives below on the basis of their capitalized costs with adjustments made for inflation. Use i =12% per year and f = 3% per year. Alternative X Y First cost, $ −18,500,000 −9,000,000 AOC, $ per year −25,000 −10,000 Salvage value, $ 105,000 82,000 Life, years ∞ 10Determine the B/C ratio for the following project.First Cost = P100, 000Project life, years = 5Salvage value = P10, 000Annual benefits = P60, 000Annual O and M = P22, 000Interest rate= 15%Using the ERR method and a 17% MARR, determine the acceptability of a 10-year manufacturing project that requires an initial investment of P2.8M with additional expenses of P1M and P3M at the end of the third and seventh year, respectively. Annual income from this project is P1.25M for ten years with all equipment to be sold for P0.5M after that time. Apply a 14% reinvestment rate. (Ans. Project is acceptable, 18.1%)
- Maintenance cost of an equipment is P20000 for 2 years, P40000 at the end of 4 years and P80000 at the end of 8 years. Compute the semi-annual amount that will be set aside for this equipment. Money worth 10% compounded annually. (Ans: ₱7,426.19)Pls show the given and the solution not excel thanks!Payback Period and Accounting Rate of Return: Equal Annual Operating Cash Flows without DisinvestmentJuliana is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $45,000 Net cash inflows from operations (per year for 10 years) 5,000 Disinvestment 0 For parts b. and c., round answers to three decimal places, if applicable. a. Determine the payback period. Answer years b. Determine the accounting rate of return on initial investment. Answer c. Determine the accounting rate of return on average investment. AnswerA company project capitalized for $ 50,000 invested in depreciable assets will earn a uniform annual income of $ 19,849 in 10 years. The costs for operation and maintenance totals $ 9,000 each year. If the company expects its capital to earn 12% before income taxes, is the investment worthwhile? Determine by usinga.) Rate of Return Method; b.) Annual Worth Method c.) Present Worth Method
- XY Co has development expenditure of $500,000. Its policy is to amortise development expenditure at 2%per annum. Accumulated amortisation brought forward is $20,000. What is the charge in the incomestatement for the year's amortisation?A $10,000B $400C $20,000D $9,600nternal Rate of Return Method The internal rate of return method is used by Testerman Construction Co. in analyzing a capital expenditure proposal that involves an investment of $49,332 and annual net cash flows of $12,000 for each of the six years of its useful life. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.352 2.991 6 4.917 4.355 4.111 3.784 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 a. Determine a present value factor for an annuity of $1 which can be used in determining the internal rate of return. If required, round your answer to three decimal places.fill in the blank 1 b. Using the factor determined in part (a) and the present value of an annuity of $1 table above, determine…1- Evaluate the following projects using the payback method assuming a rule of 3 yearsfor payback. Year Project A Project B 0 -10,000 -10,000 1 4,000 4,000 2 4,000 3,000 3 4,000 2,000 4 0 1,000,000
- Internal Rate of Return Method The internal rate of return method is used by Testerman Construction Co. in analyzing a capital expenditure proposal that involves an investment of $80,028 and annual net cash flows of $19,000 for each of the five years of its useful life. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.352 2.991 6 4.917 4.355 4.111 3.784 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 a. Determine a present value factor for an annuity of $1 which can be used in determining the internal rate of return. If required, round your answer to three decimal places.fill in the blank 1 b. Using the factor determined in part (a) and the present value of an annuity of $1 table above,…Internal Rate of Return Method The internal rate of return method is used by Testerman Construction Co. in analyzing a capital expenditure proposal that involves an investment of $57,100 and annual net cash flows of $20,000 for each of the four years of its useful life. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 a. Determine a present value factor for an annuity of $1 which can be used in determining the internal rate of return. If required, round your answer to three decimal places. b. Using the factor determined in part (a) and the present value of an annuity of $1 table above, determine the internal…Using the below informtion answer: 5.1 Payback Period of Project Tan (expressed in years, months and days). 5.2 Net Present Value of Project Tan.5.3 Accounting Rate of Return on average investment of Project Tan (expressed to two decimal places). INFORMATIONThe management of Mastiff Enterprises has a choice between two projects viz. Project Cos and Project Tan, each ofwhich requires an initial investment of R2 500 000. The following information is presented to you: PROJECT COS PROJECT TANNet Profit Net ProfitYear R1 130 000 80 0002 130 000 180 0003 130 000 120 0004 130 000 220 0005 130 000 50 000A scrap value of R100 000 is expected for Project Tan only. The required rate of return is 15%. Depreciation is calculatedusing the straight-line method.
