Consider the investment projects listed in the table below, all of which have a four year investment life.12W|N34NA-$3,200000$6,300B-$3,6001,6002,8003,,5002200a) What is the simple payback period of each project?C-$2,600-1,700-9004,5004,500D-$2,400-1,1001,8002,5001,500

The payback period refers to the time needed to earn back the invested amount in an asset from its…

Consider the investment projects listed in the table below, all of which have a four year investment life. 0 1 2 3 4 N A -$3,200 0 0 0 $6,300 B -$3,600 1,600 2,800 3,,500 2200 a) What is the simple payback period of each project? C -$2,600 -1,700 -900 4,500 4,500 D -$2,400 -1,100 1,800 2,500 1,500

Consider the investment projects listed in the table below, all of which have a four year investment life. 0 1 2 3 4 N A -$3,200 0 0 0 $6,300 B -$3,600 1,600 2,800 3,,500 2200 a) What is the simple payback period of each project? C -$2,600 -1,700 -900 4,500 4,500 D -$2,400 -1,100 1,800 2,500 1,500

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 2E

See similar textbooks

Related questions

Q: The view being reported in the extract of how the European Central Bank will deal with inflation is

A: European Central Bank (ECB) main purpose is providing the stable prices stable by making ensure that…

Q: A. Determine whether it is socially optimal for Taylor to rehearse in the dorm. B. If UP policy…

A: The singing rehearsals in the dorm of student C save student T from paying Php 500 per hour on…

Q: Question 12 The quantity of real GDP supplied at full employment is called (A) short-run equilibrium…

A: Employment is a type of economic activity in which one individual is appointed by another to do a…

Q: If the GDP price index is 150, real GDP is $10 trillion, and the quantity of money is $5 trillion,…

A: Here, given information is: GDP price index: 150 Real GDP: $10 trillion Quantity of money: $5…

Q: Double counting can be avoided when computing GDP by

A: GDP is the gross domestic product. GDP can be defined as the value of all final goods and services…

Q: If the IRR of Machine C is 12.5% and the IRR of Machine D is 11%, then it is correct to conclude…

A: Internal Rate of Return is defined as a metric that is used to derive the return or profitability on…

Q: 13. Identify which way the labor supply curve would shift under the following scenarios. A country…

A: As the labor supply curve shows the positive relationship between the wage rate and the supply of…

Q: In each of the following cases, classify the person as cyclically unemployed, structurally…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: 1. Consider a team with n individuals, n > 2. Each individual must choose whether to put in effort…

A: Team size: n>2 Two choices - Effort (e) or shirk (s) Cost of effort = ce No cost for shirk…

Q: Two machines are being considered for the production of a particular part for which there is a…

A: Given, Machine A Machine B Cost (A) 50000 75000 Salvage Value (B) 10000 0 Economic Life…

Q: How will each of the following scenarios impact the market for money The central bank increases the…

A: The interest rate that commercial banks and other financial institutions pay to borrow short-term…

Q: 31. Refer to the diagram below for a purely competitive producer. The firm should shut down in the…

A: In perfect competition , Profit is minimised where Price is equal to MC. MC is the marginal cost.…

Q: 32. The diagram below represents a profit maximizing monopolist. What does the * shaded area…

A: Average cost is the Total cost divided by quantity. For a monopoly , Profit is maximum where MR =…

Q: Question 1 Which of the following shifts aggregate demand curve rightward? (A) A decrease in wealth.…

A: The total quantity of demand for all finished products and services generated in an economy is…

Q: After government is added to the income-expenditure model, the formula for the aggregate consumption…

A: National income is referred to as the total monetary value of all goods and services that are…

Q: 8. A manufacturer can sell a certain health supplement for Php1,100 per unit. Its total cost…

A: Break even is where total profit is zero. Total profit is zero where the total revenue and total…

Q: Given the following information,when price is 100ksh the quantity supplied is 45units and when the…

A: The Law of supply states the positive relationship between price and quantity supplied, keeping…

Q: The Australian economy is initially in long-run equilibrium. The import price of industrial…

A: Aggregate demand depicts the inverse relationship between the price level and real GDP. Short-run…

Q: QUESTION 12 Assume the following: • Marginal Cost = 10 • Average Total Cost = 12 What is happening…

A: Average Total Cost (AC): Average total cost is the ratio of total cost and units that that the firm…

Q: 9. Tariffs decrease the price of imported goods below the world price by the amount of the tariff.…

A: Disclaimer- “Since you have asked multiple questions, we will solve the first question for you as…

Q: What is the effect of an increase in aggregate demand on the short-run Phillips curve? When…

A: Phillips curve represents the relationship between the inflation and unemployment. A high rate of…

Q: Refer to Table 9.1. The equilibrium level of output is ________ billion. Group of answer choices…

A: The equilibrium level of output is achieved when aggregate spending is equal to total output.…

Q: compute a piece rate for an employee earning $17.75/hour where the standard time per unit is ten…

A: Piece wage rate system is the wage system in which the wage is determined by the no. of units…

Q: 1 Monopoly is a market structure characterized by all the following features except A The firm is a…

A: In case of Monopoly there is a single seller who controls the entire market. There are strict…

Q: According to the Income elasticity formula, Income elasticity of demand - E-% change in quantity…

A: Income elasticity of demand determines the sensitivity of the quantity demanded for a specific item…

Q: IDENTITY THEFT LIABILITY. With the recent hacking of Equifax, identity theft is on the rise. It is…

A: The terms "identity theft" and "identity fraud" are used to describe any forms of crimes in which…

Q: You are required to use handwriting when you draw and produce the graph. What happen to your…

A: The substitution effect is the change in demand for a good due to a price rise. When the price…

Q: During year three, Pricilla starting collecting data on why people were buying dresses. She and the…

A: Wedding Events Average Monthly Temperature Year 3 Demand 2 1 32 212 0 0 30 245 0 5 42 252…

Q: Which of the following was a common 1970s policy response to economic shocks? a. Creating a…

A: Stagflation refers to a type of inflation that combines low rate of employment, high rate of…

Q: a) The owner of the firm expects to make a profit of K100 for each of the two years and be able to…

A: Profit maximization is the process by which businesses ensure that the best output and pricing…

Q: Perfect Competition is a model/representation of market that allows economists to understand certain…

A: Perfect Competition refers to the market structure where the large number of buyers and sellers…

Q: Consider a firm with production function: Y = 2K1L². Suppose there is perfect competition. The real…

Q: How can civil society organization meet sustainable development goals?

A: Civil society refers to all social action undertaken by people or organizations that are neither…

Q: The price elasticity of demand of a good depends in part on its relative necessity in comparison to…

A: Among other things, price elasticity depends upon the nature of the good. Nature in this sense…

Q: Devi wants to save $313,000.00 to buy a new sports car. She makes deposits of $2,822.30 every year…

A: Nominal interest rate refers to the rate of interest before considering the inflation into account.…

Q: Which one of the following statements regarding monetary policy is incorrect? O The SARB's main…

A: National Treasury, in conjunction with the South Africa Reserve Bank (SARB), pursues a formal…

Q: amp program. changing the tax laws to increase the marginal tax rates. the indexation of social s

A: Automatic stabilizers act to stabilize economic cycles and are automatically triggered without…

Q: How will each of the following scenarios impact the market for money The central bank conducts an…

A: Money market equilibrium is where the money demand curve intersects the money supply curve.…

Q: discuss secular seasonal and cyclical variations within economic data be sure to indicate how each…

A: Economic data can be collected for a single time period or over a series of time periods. The data…

Q: For this question, assume that indifference curves are strictly convex, consumption and leisure are…

A: Worker has to decide between the work and leisure. A rise in wage affects such selection of worker.…

Q: 2.1. Given a typical demand and supply schedule in the foreign exchange market, answer the following…

A: Demand refers to the quantity that a consumer wishes to buy at a given price in a given period of…

Q: Henleigh Hill, CFO of HH Corp., uses a decentralized company processing center for check collection.…

A: Total annual cost will be including the fixed cost as well as the variable cost

Q: An equipment can be purchased for $84,000. Its expected useful life is eight years at which time its…

A: Solution :- Given that, Purchasing Cost = 84,000 n = 8 years. MV = 5% of Purchasing Cost

Q: On March 25, you borrow some money for 120 days. What is the maturity date?

A: Remaining Number of Days in March - (31-25) = 6 Number of Days in April - 30 Number of Days in May…

Q: You can afford a $250 per month car payment. You've found a 3 year loan at 3.6% annual interest…

A: We know that to calculate the EMI we can use the formula as below, Equated Monthly Installment =…

Q: A utility company is considering the following plans to provide a certain service required by…

A: Plan Q Investment required - P500,000 Estimated life - 18 years Salvage value - 20% Annual…

Q: The demand and supply functions of a computer accessory are D(x) = 4.5 - 2.5x and S(x) = 0.0375…

A: The equilibrium price and quantity are decided where the demand and supply are equal. The change in…

Q: Megan and Martha own competing hair salons that are in the same neighborhood. They are both…

A: Nash equilibrium is where both player chooses their best response and the best response of both…

Q: 1. Suppose that the demand function is y = −3x + 54. A. What is the highest price a consumer would…

A: Here, demand function is given as: y=-3x+54 Where, y is the price and x is the quantity demanded A…

Question

Consider the investment projects listed in the table below, all of which have a four year investment life.
1
2
W|N
3
4
N
A
-$3,200
0
0
0
$6,300
B
-$3,600
1,600
2,800
3,,500
2200
a) What is the simple payback period of each project?
C
-$2,600
-1,700
-900
4,500
4,500
D
-$2,400
-1,100
1,800
2,500
1,500

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step 5

Step by step

Solved in 5 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

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?
Given the following cash flows for project X and project Y, Year Project X Project Y 0 -55000 -100000 1 20000 15000 2 13500 17000 3 11000 19000 4 10000 25000 5 9000 30000 6 7500 35000 Calculate the NPV, IRR, MIRR and traditional payback period for each project, assuming a required rate of return of 7 percent If the projects are independent, which project(s) should be selected? If they are mutually exclusive, which project should be selected?
You've estimated the following cash flows (in $ million) for two mutually exclusive projects: Year Project A Project B 0 -27 -43 1 30 45 2 40 50 What is the crossover rate, i.e., the discount rate at which both projects have the same NPV? What is project A's NPV at the crossover rate? What is project B's NPV at the crossover rate?
Part 1Please calculate the payback period, IRR, MIRR, NPV, and PI for the following two mutuallyexclusive projects. The required rate of return is 15% and the target payback is 4 years.Explain which project is preferable under each of the four capital budgeting methodsmentioned above: Cash flows for two mutually exclusive projects Year Investment A Investment B 0 -$5,000,000 -5,000,000 1 $1,500,000 $1,250,000 2 $1,500,000 $1,250,000 3 $1,500,000 $1,250,000 4 $1,500,000 $1,250,000 5 $1,500,000 $1,250,000 6 $1,500,000 $1,250,000 7 $2,000,000 $1,250,000 8 0 $1,600,000 Part 2 Please study the following capital budgeting project and then provide explanations for thequestions outlined below:You have been hired as a consultant for Pristine Urban-Tech Zither, Inc. (PUTZ),manufacturers of fine zithers. The market for zithers is growing quickly. The company bought some land three years ago for $2.1 million in…
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 = $35.22M
A project requires an initial investment of 45,000$, 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
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.) 254.3
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%
Consider a project that has an up-front cost of $100. In its first year it earns $30, and then in each subsequent year it earns an additional $10, so that in its second year it earns $40, the following year it earns $50, etc. The project lasts for 8 years so that in the final year its revenue is $100. The project is expected to repeat indefinitely. It has a MARR=13%. The NPW is within $5 of a)601 b)611 c)621 d)631 e)641 f) none
Relevant details of an investment decision are given below. Initial Investment 10 lacs, Cost of capital 9%, Tax rate 20% From the above Calculate the Payback period, and NPV
An investment in a new piece of equipment costing P 50,000 is expected to yield the following over its 5-year useful life: Revenues (cash), P 40,000; operating costs (cash), P 18,000; depreciation, P 10,000. The present value of P 1 received annually for 5 years and discounted at the cost of capital is 4.10 assuming that all cash flows occur at year-end. Ignoring tax effect, what is the benefit/cost ratio (profitability index) for this piece of equipment?
Use a calculator for this exercise.Suppose you obtain a five-year lease for a Porsche and negotiate a selling price of $143,000. The annual interest rate is 8.4%, the residual value is $76,000, and you make a down payment of $7000. Find each of the following. (a) The net capitalized cost$ (b) The money factor (rounded to four decimal places)(c) The average monthly finance charge (rounded to the nearest cent)$ (d) The average monthly depreciation (rounded to the nearest cent)$ (e) The monthly lease payment (rounded to the nearest cent)$