Consider the two investments with the following sequences of cash flows. At Marr of 15%. What is the IRR of project A? Project B N Project A -$30,000 -$15,000 1 $2,000 $10,000 2 $6,000 $10,000 3 $12,000 $10,000 4 $24,000 $10,000 5 $28,000 $5,000
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- Suppose we have four mutually exclusive projects, D1, D2, D3, and D4, whose internal rates of return on incremental investment between the projects is given as follows:IRR (Dl - D2) = 27.62%IRR {Dl - D3) = 14.26%IRR {Dl - D4) = 25.24%IRR (D3 - D2) = 30.24%IRR (D2- D4) = 17.34%IRR (D3 - D4) = 16.14%Which project should be selected at MARR 15%?Consider the following two mutually exclusive investment projects: Determine the range of MARR where Project 2 would be preferred over Project 1 with "do-nothing" alternative.(a) MARR ≤ 11.80%(b) MARR ≥ 11.80%(c) 11.80% ≤ MARR ≤ 18.88%(d) MARR ≤ 18.88%Cash Payback Period, Net Present Value Method, and Analysis Elite Apparel Inc. is considering two investment projects. The estimated net cash flows from each project are as follows: Year Plant Expansion Retail Store Expansion 1 $450,000 $500,000 2 450,000 400,000 3 340,000 350,000 4 280,000 250,000 5 180,000 200,000 Total $1,700,000 $1,700,000 Each project requires an investment of $900,000. A rate of 15% has been selected for the net present value analysis. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Required: 1a. Compute the cash payback period for each project.…
- 3. At 6%, find the capitalized cost of a gas turbine whose first cost is Php200,000,000 and life is 20 years, if the gas turbine must be partially rebuilt at a cost of Php100,000,000 at the end of each 20 years.You are considering the following project: It pays you $2,500 at the end of the first year, costs $8,500 by the end of the second year and brings $6,800 a year after. What is the project's internal rate of return(s), exact external rate of return and the approximate external rate of return it current MARR is 14%?Determine the capitalized cost of a series of cash flows starting at the end of the first year with $400 and increasing at the rate of $100 for the next 5 years. The series of cash flows from year 1 to 6 repeats forever. MARR= 6%
- Consider the two investments with the following sequences of cash flows Compute for i* for each investment What are the NPW of each alternatives with an MARR of 15% If A & B are mutually exclusive, which project is more economically desirable? (Incremental)Calculate the capitalized cost of a project that has an initial cost of P3,500,000 and an additional cost of P1500, 000 at the end of every 10 yrs. The annual operating costs will be P150, 000 at the end of every year for the first 5 years and P180, 000 thereafter. In addition, there is expected to be recurring major rework cost of P400, 000 every 13 yrs. Assume i =18% a.Php 4,467,564.367 b.Php 5,673.467.567 c.Php 5,534,673.123 d.Php 4,813,109.563A bridge that was constructed at a cost of P500,000 is expected to last 20 years, at the end of which time its renewal cost will be P100,000. Annual repairs and maintenance are P45,000. What is the capitalized cost of the bridge at an interest of 6%? A. 1,295,307.60 B. 1,925,307.60 C. 2,592,307.60 D. 2,195,307.60
- eBook Net Present Value Method—Annuity Take a Load Off Hotels is considering the construction of a new hotel for $12,000,000. The expected life of the hotel is 6 years with no residual value. The hotel is expected to earn revenues of $12,400,000 per year. Total expenses, including straight-line depreciation, are expected to be $10,000,000 per year. Take a Load Off's management has set a minimum acceptable rate of return of 12%. a. Determine the equal annual net cash flows from operating the hotel.$fill in the blank 1 b. Calculate the net present value of the new hotel, using the present value factor of an annuity of $1 table below. If required, round to the nearest dollar. If the net present value is negative, enter the amount using a minus sign. 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…For the following cash flows, the project may have up to: Select one: a. two ROR b. three ROR c. one ROR d. four RORCalculate the capitalized cost of a project that has an initial cost of Php 3,000,000 and an additional investment cost of Php 1,000,000 at the end of every 10 years. The annual operating cost will be Php 100,000 at the end of every year for the first four years and Php 160,000 thereafter. In addition, there is expected to be recurring major rework cost of P300,000 every 13 years. Assume i= 15%. CC = Php 5,345,234.576 CC = Php 4,546,378.987 CC = Php 5,678,435.897 CC = Php 4,281,935.961