Austin Utilities is planning to install solar panels to provide some of the electricity for its groundwater desalting plant. The project would be done in two phases. The first phase will cost $4 million in year 1 and $5 million in year 2. This investment will result in energy savings (phase 2) of $540,000 in year 3, $546,000 in year 4, and amounts increasing by $6000 each year through year 10. Let i= 10%

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Q: Suppose the State government is considering two alternative projects: Option A - An affordable…

A: Net Present Value=(Present Value of Cash Inflows-Present Value of Cash Outflows)

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A:

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A: Net present value is the difference between Present Value of cash Inflows and Initial Investment.

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A: Capital budgeting techniques: Capital budgeting techniques are tools that are used to evaluate or…

Q: A Water Treatment Company is considering the installation of new magnetic flow mieters in one of its…

A: Since you have asked a question with multiple parts, we will solve the first 3 parts as per policy.…

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A: IRR is the rate at which NPV of the project is zero

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A: Average After Tax Income = 76,300 Average Book Value of Equipment = 194,140

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A: Computation:

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A: Given: Initial investment is $209,550 Cash flows = $83,750 for 6 years Cost of capital is 11%

Q: payback period for this project?

A: Payback period is the number of years required to fully recover the initial investment.

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A: The formula to compute payback period as follows:

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A: Computation:

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A: Net present value = Present value of cash inflows and salvage value - Amount invested

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A: Initial outflow = $225,550  Cashflow =  $97,750  Cost of capital = 12% years = 6 years

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A: Single cell spreadsheet function: Using single spread sheet: Answer: $499,109.98

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A: Since we only answer up to 3 sub-parts, we’ll answer the first 3.Please resubmit the question and…

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Q: A large water utility is planning to upgrade its SCADA system for controlling well pumps, booster…

A: Present worth is the current value of the amount which is expected to be received in future date for…

Q: A city is analyzing two alternatives for generating electricity. The first is the construction of a…

A: Net Present Value An economic metric known as net present value (NPV) adds up all potential inflows…

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A: Accounting rate of return means the average  annual yield on the project (Average profit after tax…

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A: Capital budgeting technique is used to analyze the projects or alternatives present for the…

Q: A project will cost $45,000 to develop. When the system becomes operational after a one-year…

A: Payback period is the period which is generally expressed in years or months at which the total…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.