I need the answer in 15 minutes, please, and I want it in clear writing. Greetings Question (5):Consider these two alternatives:AlternativeY60,00023,50044,000Initial cost, $Annual operating & maintenance cost, $Annual income, $Useful life, in years100,00016,50044,0008If the MARR is 8%, which alternative should be selected? (Use internal rate ofreturn IRR).

IRR (Internal Rate of Return) is defined as the minimum rate that is needed to be earned in order to…

Answered: Consider these two alternatives:

Business

Finance

Consider these two alternatives:

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Related questions

Q: has accumulated $6200 by saving $116 every month for four years, what nominal annual rate of interes...

A: The amount deposited in account grow to large amount after deposits are made for long time with effe...

Q: Bulldogs Inc., which is located in the USA, imports dog treats from Thailand Baht. Each bag of dog t...

A: Spot rate is the today's rate at which one foreign currency can be exchanged with another currency. ...

Q: What is the company’s after-tax weighted average cost of capital if Bulldogs Inc. pays taxes at the ...

A: Capital Ratio Cost of capital Long-term liabilities 40% 10% Preferred stock 30% 10% Common sto...

Q: Red Company's comparative balance sheet shows the following: P10,000 increase in accounts receivable...

A: Cash flow from operating activities are those activities which are carried in the normal course or o...

Q: 3. If unit outputs exceed the breakeven point: * O There is a loss. There is a profit. Total sales r...

A: Break-even Point: The break-even point is that level of sales at which the operating income (EBIT) b...

Q: Which of these is not typically a responsibility of a property manager? Maintenance programs O Marke...

A: Property manager is the person who sees the day to day working of the real estate.The responsibility...

Q: A university student painter is considering the purchase of a new air compressor and paint gun to re...

A: The term net present value, or NPV, refers to the current total worth of a future stream of payments...

Q: Red Company has a profit margin of 15 percent on sales of $20,000,000. If the firm has a debt of $7,...

A: Solution:- Return on Total Assets ratio measures that how much net income does the company earn on i...

Q: The nominal annual interest rate on 6-month USD Treasury Bill is 4.50%. The spot rate of the Euro is...

A: Given: Spot rate = $3.8643 Forward rate=$3.8880 US interest rate=4.50%

Q: You plan to buy a common stock and hold if tor one year. You expect to receive both ₱150 and ₱260 fo...

A: Expected amount to be received after 1 year = P 150 and P 260 with equal probability r = Required re...

Q: The current yield on a bond worth P800 with a par value of P1,000 and a coupon rate of 12% is

A: Current yield can be calculated by using this equation Current yield of bond =Coupon payment/current...

Q: Company has the following historical pattern on its credit sales: 70% collected in the month of sale...

A: Cash budget is a forecast of a company's cash flows over a predetermined amount of time which might ...

Q: Sammie Jo wants to begin saving for her retirement in 35 years. She researched and found an annuity ...

A: The future value is equal to the sum of the future cash flows multiplied by the future value factor ...

Q: Bl Inc currently has earnings before interest and taxes of P3,000,000, a degree of combined leverage...

A: The degree of operating leverage can be used to estimate change in operating income with respect to ...

Q: Franco is considering investing P18,500 in an investment that will have a maturity value of P32,500 ...

A: Investment amount (P) = P18,500 Maturity value (F) = P32,500 Period = 8 Years Monthly period (n) = 8...

Q: Which project(s) should a firm choose when the projects are independent? When they are mutually excl...

A: Time period is 3 years Initial Investment for both projects is $2550 Discount rate is 10% To Find: ...

Q: The Black-Scholes model is used by Bulldogs Inc. to value call options on the stock of National Inc....

A: Black and scholes model: It is the model used to calculate the value of a call option as well as put...

Q: Inc. 4-year long-term bonds currently yield 11%. The real risk-free rate is 3%. The maturity risk pr...

A: The yield on the long term bonds have risk interest rate, inflation premium , liquidity premium and ...

Q: mula for Gross Margin ratio? Seleccione una: a. Cost of Sales / Gross Revenues b. Revenues / Gross E...

A: Gross margin ratio is one of indicator of the profitability of company and depends on the total reve...

Q: now january 1, 2018, and you will need $1,000 on january 1, 2022, in 4 years. if you have only $750 ...

A: Future value of money is the initial investment and interest accumulated over the period of time acc...

Q: Bulldogs Inc. has a P1,200 face value bond with 8 years until maturity. The bond possesses a charact...

A: We need to use RATE formula in excel to calculate yield to maturity. The formula is =RATE(NPER,PMT,-...

Q: o increase Sales and Sales Growth, the top Marketing Manager suggested to price products slightly lo...

A: Sales now are $80 million Required return "i" is 15% Initial investment required is $1 million Profi...

Q: 0. Devon takes out a loan of $1,500, at 5 1 2% simple interest, for 53 months. What is the maturi...

A: Maturity value can be calculated by using this equation Maturity value =Principal*(1+rate*time)

Q: PROBLEM: If Php 6,000 must accumulate for 12 years at 12 % compounded quarterly, then find the compo...

A: Investment amount (PV) = 6000 Period = 12 Years Quarterly period (n) = 12*4 = 48 Interest rate = 12%...

Q: Bobby has heard the importance of saving early for retirement. He wants to retire in 35 years. But h...

A: Here, Monthly Savings (PMT) is $600 Time to Retire is 35 years Time to Start saving is after 20 year...

Q: Cash flows in Rs millions of three options (A, B, and C) for Year-1, Year-2, Year-3 and Year-4 are A...

A: NET PRESENT VALUE: It is the value which gives an investor to make righ...

Q: In 2012, a certain company estimates that phones sales will increase by 50% for their C005 model and...

A: The sales of the company grow by the certain percentage that may change depending on the environment...

Q: A restaurant budgeted for sales of Php 100,000.00 and total costs of 89%. How much profit would this...

A: Sales = Php 100,000 Cost ratio = 89%

Q: Can you help me with this please? Katrina purchased a dining room set for $1500 down with the balanc...

A: Monthly payment (P) = $198.12 Interest rate = 12% Monthly interest rate (r) = 12%/12 = 1% Total mont...

Q: 4. Best Flight Inc. is considering three mutually exclusive alternatives for implementing an automat...

A: To evaluate which alternative to be chosen, it is required to calculate the NPV of the different alt...

Q: The current zero-coupon yield curve for risk-free bonds is as follows What is the price per $100 fac...

A: Zero coupon bond A zero coupon bond is a bond that makes no periodic coupon payments. At the end of ...

Q: Farm Foods Company, produces two types of pork loins . Each type of loin consists of white meat and ...

A: pork loins Problem: Selling Price of pork loins (per pound) pork loins 1 pork loins 2 Sell...

Q: The ____ of an annuity is the sum of all payments plus all interest earned

A: As per Bartleby Honor Code, when multiple questions are asked, the expert is required only to solve ...

Q: Dick Eckel recently set up a TDA to save for his retirement. He arranged to have $135 taken out of e...

A: Future value is compounding all intermediate cashflows to future point of time. It helps to ascertai...

Q: You are an investor who is interested in purchasing AC shares which is currently trading at a price ...

A: Growth rate = 3% Required return = 8% Expected dividend = P25

Q: pose the central bank wishes to increase the money supply by $500 million s so by purchasing one-yea...

A: The money supply is function of central bank and depending on the requirement of economy the central...

Q: The following data are gathered for: · The real risk-free rate is 1.25% · Inflation ...

A: The real risk-free rate (RP) = 1.25%Inflation premium is constant (IP) = 2.50%Default risk premium ...

Q: A manager is interested in improving productivity at a plant by changing the layout of the workstati...

Q: How much is the expected rate of return for Stock A? Use a whole number in percent form, no space, n...

A: Highly favourable probability (P1) = 0.1 Favourable probability (P2) = 0.3 Normal probability (P3) =...

Q: Suppose you want to buy 10,000 shares of Ultra Universe Company at a price of 4.00. You put up P10,0...

A: Given: Short of shares = 10,000 Price =P4 Initial margin = 60% Amount invested = P10,000

Q: 15. Compute the principal (in $) for the loan. Use ordinary interest when time is stated in days. P...

A: The principal amount can be calculated with the help of simple interest function

Q: BMW (Germany) owes FORD (US) $100 due in 1 year. The current spot is $1.2/€. BMW wants to use option...

A: Given: BMW owes = $100 Spot rate = $1.2 /€ Strike price on call = $1.1/€ Strike price on put =$1.05/...

Q: A manufacturing plant installed a new boiler at a cost of P150, 000 and estimated to have a useful l...

A: Capitalized cost is the present value of the constant annual cost for infinite period.. Examples of ...

Q: The graph shows globa revenue for laptops. A company has a 25% marketshare in 2019. What is an appro...

A: There is need of forecasting to create budget for the production in particular period for that data ...

Q: In regarding the Asset backed securities & Mortgage backed securities: 1- What is the utility using ...

A: Asset-backed securities are financial instruments that are backed by income-producing assets such a...

Q: Which of the following about optimal capital structure is incorrect? Optimal capital structure is ...

A: Company requires funding for their investment which can be obtained from broadly two sources. Equit...

Q: Compute the Indirect and Direct Quotations of the following Exchange Rates. Swedish Krona = ?

A: Here,

Q: analyst is trying to determine the intrinsic value of a certain share. Which of the following is tru...

A: To find out the intrinsic value o the stock there two methods one is dividend discount model and fre...

Q: Franco wants to accumulate P150,000 in order to make the down payment for a new car. He plans to inv...

A: Annual investment (P) = P25,000 Future value required (FV) = P150,000 Interest rate (r) = 8% Period ...

Q: (a) What is meant by 'mutually exclusive projects'? (b) Wivenhoe Ltd's managers sought your advice r...

A: Since you have posted a multiple part question therefore as per our guidelines we will be solving th...

Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

I need the answer in 15 minutes, please, and I want it in clear writing. Greetings

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

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 2 images

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, finance and related others by exploring similar questions and additional content below.

Similar questions

Consider the following 2 alternatives. Alternative A Initial cost: $10,000 Mainteinance anual $6000 Useful life 2 years Residual Value $1000 Alternative B Initial cost $ 12,000 Maintenance annual $ 5000 Useful life 4 years Residual value $ 3000 MARR for both is 8% a) The equivalent Uniform Annual Value for alternative A is $ and the equivalent Uniform Annual Value for alternative B is $
The equivalent annual worth of alternative A is closest to:a. $-25,130b. $-37,100c. $-41,500d. $-42,900
A company is considering two alternatives with regards to equipment which it needs. The alternatives are as follows: Alternative A:PurchaseCost of Equipment 700,581Salvage Value 105,896Daily operating cost 534Economic life, years 10 Alternative B: Rental at 1,539 per day. At 18% interest, how many days per year must the equipment be in use if Alternative A is to be chosen.
Amount Desired at End of Period Length of Time Rate Compounded $ 17,600.00 7 2% Quarterly Required: Complete the following using the information above and the present value Table 12.3 or the present value table in the Business Math Handbook or the present value formula to answer the following: Period Used Rate Used PV factor used PV of amount desired at end of period
Two types of power converters are under consideration for a specific application. An economic comparison is to be made using a MARR of 10% and the following cost estimates: Alternative Model A Model B Service Life (Years) 5 10 First Cost $10,000 $20,000 Salvage Value 0 5,000 Annual Operating Cost 2,500 1,200 Draw the Cash Fiow Diagram for each alfernative covering the entire analysis period. Compute the Net Present Worth for Model A? Compute the Net Equivalent Uniform Annual Worth for Model A? Which of these alternatives should be selected?
Should you replace the Defender?MARR: 12% ❑ Given: DefenderMarket price: $100,000Remaining useful life: 3 yearsSalvage value: $25,000O&M cost: $8,000 ChallengerCost: $150,000Useful life: 3 yearsSalvage value: $55,000O&M cost: $6,000
Determine the B/C ratio for the following project.First Cost = P100, 000Project life, years = 5Salvage value = P10, 000Annual benefits = P60, 000Annual O and M = P22, 000Interest rate= 15%
Two alternatives are being considered for installation. Which should be selected based on an interest rate of 5.6% per year ? Alternative A Alternative B First Cost, $ 135,000 462,000 Annual Operating Cost, $/yr 76,000 34,600 Salvage value, $ 71,200 n/a Life, years 9 ∞
9. Consider the following table which summarizes data of two alternatives. First cost Annual return Life Alternative 1 Rs. 5,00,000 Rs. 1,50,000 10 yrs Alternative 2 Rs. 8,00,000 Rs. 2,50,000 10 yrs Find the best alternative based on the rate of return method of comparison.
Which equipment is preferred if the firm’s interest rate is 15%? In PW terms how great is the difference? Alternative A B First cost $45,000 $35,000 Annual O&M 3,900 4,200 Salvage value 0 5,000 Overhaul (Year 6) 10,000 Not required Life, in years 10 5
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 .
Compare the following alternatives based on the rate of return analysis assuming that the MAAR is 15% per year. Project A Project B Initial Cost $60.000 $90.000 Annual cost of operation 15.000 8.000 Annual cost of reparation 5.000 2.000 Annual increase of the repair 1.000 1.500 Salvage value 8.000 12.000 Life, years 15 15

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS