Compare the alternatives C and D on the basis of a present worth analysis using an interest rate of 10% per year and a study period of 10 years. Alternative C D First cost, $ −40,000 −32,000 AOC, $/year −7,000 −3,000 Annual increase in operating cost, $/year −1,000 — Salvage value, $ 9,000 500 Life, years 10 5

Q: Average Rate of Return, Cash Payback Period, Net Present Value Method for a Service Company Spanish…

A: Average Rate of Return: Average rate of return is a method that measures the average earnings of a…

Q: Compare the two following alternatives in terms of present worth using MARR = 8% for a study period…

A: Computation:

Q: Given a Project with the following data: First (initial) cost = JD 7000; Annual Operating cost= JD…

A: The following calculations are done to calculate the equivalent single value of the project.

Q: 1. Compare the following alternatives on the basis of Present worth Analysis at an interest rate of…

A: Present Worth Analysis: It is a technique of analysis in which the cash flows of a project are…

Q: Average Rate of Return, Cash Payback Period, Net Present Value Method for a Service Company Spanish…

A: Capital budgeting techniques are techniques which are used for analysing profitability of the…

Q: Method and (b) Future worth Method if interest rate is 10% per year? Machine nitial Cost (Php)…

A: The present worth and future worth are methods to asses the feasibility of projects under…

Q: The profitability index at 10% per year for a project that has an initial investment of $400,000, an…

A: Calculation of PI (Profitability index) is shown as follows: Hence, option (a) i.e. 0.95 is…

Q: Determine the annual worth X_--Y_-----and X__---- if the interest rate 10% per year compounded…

A: It is used for decision-making when machines with different lives are comparing. EAC=NPV/Annuity…

Q: 1. Two alternatives are being considered for installation. Which should be selected based on a…

A: Present worth tells the present value of the cost. It is calculated by discounting all the future…

Q: Calculate the Annual Worth (AW) based on the data for the following project: Corporate MARR = 10%…

A: The question is based on the concept of calculation of equivalent annual cost for the machine or…

Q: Compute the following: a.   The average rate of return, giving effect to straight-line depreciation…

A: Requirement a:

Q: The value of CC for the alternative (B) -at an interest rate of 10% per year is closest to:…

A: Capitalized cost is the present value of the future payments of the project, if the project is done…

Q: A challenger asset with a maximum useful life of 6 years has a first cost of $43,000 and an…

A: Equivalent uniform annual cost comprise of annual equivalent uniform of first cost less annual…

Q: Examine whether the project should be proceeded or not by determining the conventional B/C ratio…

A: A B/C ratio is a benefit-cost ratio. it divides the present value of cost inflows by the present…

Q: Compare the alternatives below on the basis of their capitalized costs with adjustments made for…

A: Capitalized cost is the cost which is the incurred while making purchase of fixed assets. It…

Q: Two mutually exclusive alternatives have the estimates shown below. Use annual worth analysis to…

A: Annual worth analysis: It is the computation of the equivalent annual worth of a project or an…

Q: 1.Gillespie Gold Products, Inc., is considering the purchase of new smelting equipment. The new…

A: Thanks for the Question Bartleby's Guideline: “Since you have asked multiple question, we will solve…

Q: at is the initial investment, annual cash flows, and npv for Lease of $25 Million in Equipment…

A: Net present value is the difference between the present value of cash flow and initial investment.

Q: Average Rate of Return, Cash Payback Period, Net Present Value Method for a Service Company Spanish…

A: Cost of Equipment = $132,000 Residual Value = $0 Useful Life = 10 years   Annual Depreciation =…

Q: 1/McAfee Automobiles Manufacturing are considering two alternative investment proposals with the…

A: Accounting rate of return used evaluate by dividing net income by average investment. We can measure…

Q: For the cash flows shown, use an annual worth comparison and an interest rate of 8% per year and…

A: Annual worth is the equivalent & uniform annual value of all the cash flows of an investment.

Q: Calculate the rate of return for an investment that meets the criteria listed below: initial cost…

A: Internal Rate of Return ( IRR) is a Capital budgeting technique which help decision making and also…

Q: Determine the net present worth of a facility at an interest rate of 4% with a life span of 15 years…

A: Interest rate (i) of 4% A life span of 15 years (n) Initial cost (C) = $1,500,000 Annual O&M…

Q: Average Rate of Return, Cash Payback Period, Net Present Value Method for a Service Company Spanish…

A: a. Compute average rate of return on the investment as shown below:

Q: Compare the two following alternatives in terms of present worth using MARR = 4% for a study period…

A: Present worth is the sum of present value of cash flows.

Q: An analyst offers three investment alternatives with the A= $200,000; B= $300,000 and C= $100,00O.…

A: Solved using Financial Calculator  Option A CF Mode: Press CF C0 = +/- 200,000 C1 = 40,000 F1 = 10…

Q: Average Rate of Return, Cash Payback Period, Net Present Value Method for a Service Company Spanish…

A: Cost of Machine = 215000 Life of Machine = 10 years Depreciation each year = 215000/10 = 21500…

Q: Average Rate of Return, Cash Payback Period, Net Present Value Method Bi-Coastal Railroad Inc. is…

A: Payback period:   It is a time period taken by the firm to recover its initial investment amount.…

Q: Problem 1. Compare the alternatives below on the basis of an annual worth analysis, present worth…

A: Alternative with the lowest present worth or annual worth shall be chosen.

Q: Determine the B/C ratio for the following project. First Cost P100, 000 Project life, years 5…

A: B/C ratio known as the benefit-cost ratio is computed by calculating the present value of benefits…

Q: Spanish Peaks Railroad Inc. is considering acquiring equipment at a cost of $1,250,000. The…

A: Annual depreciation = (Cost of investment - residual value) /  expected life = (1250000-0)/8 years =…

Q: Determine the FW of the following engineering project when the MARR is 16% per year. Is the project…

A: The future worth analysis is a kind of quantitative analysis that helps in evaluating the capital…

Q: Two mutually exclusive alternatives have the estimates shown below. Use annual worth analysis to…

A: Present Value:  The present value is the current value of a series of fixed payments. The series of…

Q: Compare the alternatives C and D on the basis of a present worth analysis using an in rate of 10%…

A: Alternate C Year Cash flow PVF @10% PVCF 1    11,000.0         0.9091    10,000.00 2…

Q: Spanish Peaks Railroad Inc. is considering acquiring equipment at a cost of $1,250,000. The…

A: Annual depreciation = (Cost - residual value) / life of the assets = ($1,250,000-0)/8 years =…

Q: verage Rate of Return, Cash Payback Period, Net Present Value Method for a Service Company Spanish…

A: a) Average rate of return = Average net income/Average investment = (46000-36800)/184000 = 5% b)…

Q: Spanish Peaks Railroad Inc. is considering acquiring equipment at a cost of $568,000. The equipment…

A: Annual depreciation = (Cost of assets - Residual value) / life of the assets = ($568,000-0)/10 years…

Q: Compare two alternatives, A and B, on the basis of a present worth evaluation using i = 10% per year…

A: Calculation of present worth of alternative A: Excel spreadsheet:

Q: Problem 1. Compare the alternatives below on the basis of an annual worth analysis, present worth…

A: Alternative with the lowest present worth and annual worth shall be chosen/ economical.

Q: Compare the alternatives C and D on the basis of a present worth analysis using an interest rate of…

A: Present Worth of any project is combined present value(PV) of all costs related to that project…

Q: Two mutually exclusive alternatives have the estimates shown below. Use annual worth analysis to…

A: Mutual exclusive alternative:  The first stage in doing an economic analysis of two or more…

Q: Compare the alternatives C and D on the basis of a present worth analysis using an interest rate of…

A: Interest rate = 15% Study period = 10 years

Q: Evaluate the following using the present worth comparison method. Use an annual interest rate of 10%…

A: Option 1: Year Outflow Inflow (Growth of 8%) Cash Flow = Inflow - Outflow 0 -87,000,000.00 0.00…

Q: The following information regarding an investment project is available.   Scrap Value £10,000 at…

A: The payback period is a capital budgeting technique that evaluates a capital project's liquidity…

Q: Average Rate of Return, Cash Payback Period, Net Present Value Method for a Service Company Spanish…

A: Annual depreciation = (cost of assets-residual value) /expected life of the assets = (176000-0)) 10…

Q: Average Rate of Return, Cash Payback Period, Net Present Value Method for a Service Company Spanish…

A: Requirement a:

Q: Compare the alternatives shown below on the basis of their capitalized costs, using an interest rate…

A: Capital budgeting  The technique business uses for determining which alternative/ project it should…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.