Compare the alternatives shown on the basis of their capitalized costs using an interest rate of 10% per yearquarterly. Alternative M Alternative N First cost, P 150,000 800,000 Annual operating cost, P per year 50,000 Salvage value, Life, years 10,000 1,000,000 8,000 25
Q: Annual Operating Cost 15,000 20,000 $ per year Expected salvage value $ 5,000 10,000 Expected use,…
A: Initial Outlay It refers to the fledgling amount to start a new project, and it is the basic…
Q: Data for two alternatives are as follows: A в INVESTMENT 35,000 50,000 ANNUAL BENEFITS 20,000 25,000…
A: IRR: In capital budgeting, the internal rate of return, or IRR, is a metric that is used to assess…
Q: A TV is costs P90,000. Its estimated scrap value is P10,000 after 8 years. Solve for the constant…
A: Depreciation is decrease in the value of fixed asset due to wear and tear, and passage of time.
Q: An Equipment costs P10,000 with a salvage value of P500 at the end of 10 years. Calculate the annual…
A: Formula: 'Annual Depreciation : = [ ( Asset cost -Salvage value ) x Interest rate ] / [ ( 1 +…
Q: Estimate the approximate before-tax rate of return (ROR) for a project that has a first cost of…
A: Introduction: Return on investment: Return on investment is the measurement of the performance of…
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: Determine the FW of the following engineering project when the MARR is 13% per year. Is the project…
A: Given:
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: 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: 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: A bedroom is costs P30,000. Its estimated scrap value is P15,000 after 8 years. Solve for the…
A: Sinking fund is one of the technique for calculating the depreciation. It is the fund maintained…
Q: Compare the alternatives below on the basis of their capitalized costs with adjustments made for…
A: Capitalized cost Capitalized cost refers to expenses that are summed to the cost basis of a fixed…
Q: culate the capitalized cost of a project th: nitial cost of P3,000,000 and an additiona P1,000,000…
A: A capitalized cost refers to the cost which is summed up to the cost basis of a fixed asset of the…
Q: Calculate the present worth of all costs for a newly acquired machine with an initial cost of…
A:
Q: Compare the alternatives shown on the basis of their capitalized costs using a MARR of 10% per year.…
A: The capitalized-equivalent-worth approach, also known as Capitalized Cost (CC) Analysis, determines…
Q: Evaluate the two alternatives A and B and decide the economic justified alternative using: Present…
A: Investment appraisal is the branch of financial management which deals with evaluating potential…
Q: Determine the capitalized cost of an alternative that has a first cost of $55,000 an annual…
A: Since multiple question is asked by you so we will solve the 1st question for you. If you want any…
Q: Determine the FW of the foliowing engineering project when the MARR is 18% por year. Is the project…
A: From the given information, Annual net benefit ($) = Receipt - Expense = 7,500 - 3,000 = 4,500 FW…
Q: In comparing alternatives, I and J by the present worth method, the equation that yields the present…
A: Present worth will be the difference between total present worth of cash inflows and total present…
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: 5. Given: First cost = $1,000,000 Salvage value after 5 years = $400,000 N= 7 year life Annual O&M…
A: Solution : Under CCA Rate of Deprecation Deprecation on assets will be charge in first year of…
Q: A buffing machine is costs P10,000. Its estimated scrap value is P1,000 after 10 years. Solve for…
A:
Q: natives below. The after-tax MARR is 10% per year, MACRS depreciation applies, andT.= 42%. The (GI –…
A: Cash flow after taxes (CFAT) is a measure of financial performance that shows a company's ability to…
Q: Compare the machines shown on the basis of their capitalized costs and an interest rate of 10% per…
A: Given, Firstly consider the Machine A Initial cost (C) = 200000 Salvage (S) = 25000 Maintenance…
Q: Two alternatives are being considered for installation. Which should be selected based on an…
A: Under Capital budgeting decision, when the life of alternative projects is not same, equivalent…
Q: In comparing alternatives, I and J by the present worth method, the equation that yields the present…
A: Given in this question is the information regarding the Alternatives I and J . capitalized worth…
Q: A bridge with an initial cost of P50,000,000 has a life of 20 years. The bridge must be partially…
A: In this we have to calculate present value of all cost.
Q: Find the capitalized cost for the following information: Note: Write a positive number, with at…
A: A capitalized cost seems to be a cost spent as a result of the purchase of a fixed asset that has…
Q: Compare three alternatives on the basis of their capitalized costs at i 14% per year and select the…
A: Capitalized cost is the present worth of the annual cost over the tenure of the project or…
Q: ATVIS costs P90,000. Its estimated scrap value is P10,000 after 5 years. Solve for the constant…
A: The sinking fund method is a way to depreciate an asset while still making enough money to replace…
Q: Given the following information, what is the financial break-even point? Initial investment =…
A: Given that: Fixed cost=$58000 price=$130 variable cost per unit=$95 Thus formula of financial break…
Q: Compare three alternatives on the basis of their capitalized costs at i = 13% per year and select…
A: In any company's balance sheet, capitalized cost is a benefit that is applied to the cost base of…
Q: Compare the alternatives C and D on the basis of a present worth analysis using an interest rate of…
A: The calculation is:
Q: The alternatives shown on the basis of their capitalized costs using an interest rate of 10% per…
A: Capitalized cost can be computed using the following formula: CC=First cost(A/P,i,n)+Annual…
Q: A buffing machine is costs P10,000. Its estimated scrap value is P1,000 after 9 years. Solve for the…
A: In sinking Fund method the depreciation is calculated as follows Sinking Fund Method Depreciation =…
Q: Evaluate the two alternatives A and B and decide the economic justified alternative using: Present…
A: As you have asked a multiple subpart question, we will answer the first three subparts for you. To…
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: 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: A sala set is costs P80,000. Its estimated scrap value is P5,000 after 10 years. Solve for the…
A: Sinking fund method of depreciation includes the setting aside of a fund apart from computing the…
Q: ompare three alternatives on the basis of their capitalized costs at i = 13% per year and select the…
A: Capitalized cost is the present value of all cost that may occur during the economic life of the…
Q: Compare the following alternatives on the basis of their capitalized costs at i = 3% per year and…
A: Alternative 1: First Cost = -$214,353 AOC, per year = -$23,334 Salvage Value = $55,728 Life, Years…
Q: The cash flows for two alternatives are shown. The correct equation for computing the AW of…
A: Annual worth(AW) shows the net difference between all benefits and costs which occurs in 1 year at…
Q: Given the following table for two alternatives. consider that the interest rate = 10% Alternatlve A…
A:
Q: The net present value of the cost of operating a machine for the next five years is R8 947. The…
A: Equivalent annual cost from net present value is calculated by present value of annuity formula. EAC…
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…
Q: An equipment was purchased now at P10,000,000.00 prevailing interest rate is 10% per year. Solve the…
A: “Since you have posted a question with multiple sub-parts, we will solve the first subpart for you.…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- 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 ∞ 10Consider a piece of equipment that initially cost $8,000 and has these estimated annual expenses and MV: If the after-tax MARR is 7% per year, determine the after-tax economic life of this equipment. MACRS (GDS) depreciation is being used (five-year property class). The effective income tax rate is 40%.Compare three alternatives on the basis of their capitalized costs at i = 13% per year and select the best alternative. Alternative E F G First Cost $-85,000 $-325,000 $-825,000 AOC, per Year $-65,000 $-20,000 $-6,000 Salvage Value $25,000 $75,000 $500,000 Life, Years 2 4 ∞ The capitalized cost of alternative E is $ , alternative F is $ , and alternative G is $ . The best alternative is E G F .
- What is the capitalized cost of a structure that will require construction costof P1,000,000 immediately and P800,00 each year for the next 4 yearsand annual year –end maintenance of P36,000 plus the expenditure ofP200,000 an the end of each 10-year period for replacement? Assume12% interest rate.Compare the alternatives shown on the basis of their capitalized costs using a MARR of 10% per year. Alternative M N First cost, $ −195,000 −750,000 Annual operating cost, $ per year −70,000 −11,000 Salvage value, $ 8,000 1,000,000 Life, years 5 ∞ The capitalized cost for alternative M is $− , and the capitalized cost for alternative N is $− . The best alternative selected on the basis of their capitalized costs is alternativeCompare the following investment alternatives using PW analysis and an annual interest rate of %12, compounded monthly. Alternative-A Alternative-B First cost, $ 240,000 450,000 Uniform Annual operating cost, $ 22,000 34,000 Uniform quarterly Benefit, $ 65,000 77,000 Salvage value, $ 120,000 230,000 Life, year 25 infinite
- The internal rate of return method is used by Testerman Construction Co. in analyzing a capital expenditure proposal that involves an investment of $60,465 and annual net cash flows of $15,000 for each of the nine 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 rate of return for the proposal. %The net present value of the cost of operating a machine for the next five years is R8 947. The discount rate used by the company for investment appraisal is 9% Required What is the equivalent annual cost, and the present value of the cost in perpetuity of operating this machine? (Use discount factors to three decimal places) a. Equivalent annual cost: R92 825.56; cost in perpetuity: R9 283 b. Equivalent annual cost: R2 300; cost in perpetuity: R25 555.56 c. Equivalent annual cost: R2 000; cost in perpetuity: R20 000.00 d. Equivalent annual cost: R9 283; cost in perpetuity: R92 825.56Determine the capitalized cost of an alternative that has a first cost of $55,000 an annual maintenance cost of $12,000 and a cost every five years of $20,000. Use an interest rate of 11% per year.
- A machine is purchased for P100,000. If the annual maintenance cost is P1,800, determine the capitalized cost of perpetual service with an interest rate of 8%. P325,000 P425,000 P525,000 P625,000Compare the following alternatives based on the equivalent uniform annual value analysis, using a 15% annual interest rate with continuous capitalization. Alternative A Alternative B Initial Cost $18000 $25000 Annual Cost $4000 $3600 Salvage Value $3000 $2500 Life (years) 3 4What is the capitalized cost (absolute value) of the difference between the following two plans at an interest rate of 10% per year? Plan A requires an expenditure of $50,000 every five years forever beginning in year 5. Plan B requires an expenditure of $100,000 every 10 years forever beginning in year 10.