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- build a model Each of the three alternatives shown has a 5-yearuseful life. MARR is 10%, a) Using FW, which alternative should be selected? B) Using benefit–cost ratio analysis, which alternative should be selected? C) what is the discounted payback period of each alternative? A B C Cost $ 650.00 $ 500.00 $ 250.00 Uniform annual benefit $ 180.00 $ 140.00 $ 66.00 Useful life, years 3 6 3Year End Cash Flow Alternative A Alternative B 0 -1,000 600 1 600 500 2 600 -2,000 3 600 400 4 600 200 5 -2,100 -1,000 6 700 1,386 a) Solve for the Net Present Value of the alternatives A and B using interest rates from 0% upward. b) Plot the curves on the resulting net present values against interest rates. c) What are the rates of return of the two alternatives? d) What is the rate of return on the difference between the alternatives? e) If your MARR is 8 percent, which alternatives would you select? Comment briefly on your results. What are some problems associated with the ROR method? f) Assume the negative cash flows are costs and the positive ones are benefits. What are the Benefit Cost ratios over the analysis period? This problem requires many iterations. Use interest tables and/or write a computer program to solve it.7) Margaret has a project with a $28 000 first cost that returns $5000 per year over its 10-year life. It has a salvage value of $3000 at the end of 10 years. If the MARR is 15 percent, what is the present worth of this project?
- How much money would have to be placed in a sinking fund each year toreplace machine B at the end of 25 years if the fund yields 10% annualcompound interest and if the first cost of the machine is assumed toincrease at a 6% annual compound rate? (Assume the salvage value doesnot change.) Group of answer choices A. $3,600 B. $4,110 C. $2,400 D. $7,000True or False 1. For any economy study based on our discussions, it is always necessary to determine the profit to evaluate thebetter/best alternative.2. If simple interest is evaluated, then the interest obtained will always be directly proportional to the number of years assuming that a constant interest rate is used throughout these years.A professional footy player and his agent are evaluating three contract options to play in the Australian Football League (AFL). Each option offers a signing bonus and a series of payments over the life of the contract. The player uses 7.25% rate of return (compounded annually) to evaluate the options. Year Cash flow Richmond Football Club Hawthorn Football Club Collingwood Football Club 0 signing bonus $3,500,000 $3,500,000 $3,500,000 1 Annual Salary $700,000 $850,000 $775,000 2 Annual Salary $750,000 $800,000 $775,000 3 Annual Salary $800,000 $750,000 $775,000 4 Annual Salary $850,000 $700,000 $775,000 Using the information provided above, which contract should be chosen? (Show your calculations).
- a man bought a property and he paid php 100000 cas and agreed to pay php 20000 at the end of each 6 months for 5years. He failed to pay the first 5 payments. at the end of 3 years. he is required to pay by the seller the entire debt consisting of his accumulated and future liabilities. otherwise the farm would be foreclossed by the seller. a) what is the present worth? b) what must he pay if money is worth 12% compounded semi-annually?Engr. Dela Cruz, the buyer of a certain equipment may pay either in 2,000.00 cash down payment and 2,000.00 annually for the next 6 years, or pay 3,500.00 cash and 2,000.00 annually for the next 5 years. A.) What type of annuity are the options of Engr. Dela Cruz?B.) If money is worth 12% compounded annually, which method of payment is better for Engr. Dela Cruz and how much?5-27image If produced by Method A, a product’s initial capital cost will be $100,000, its annual operating cost will be $20,000, and its salvage value after 3 years will be $20,000. With Method B there is a first cost of $150,000, an annual operating cost of $10,000, and a $50,000 salvage value after its 3-year life. Based on a present worth analysis at a 15% interest rate, which method should be used?
- As a rental for a building, the owner received two offers:(A) P50000 a year for 8 years, the rental for each year paid at the start of the year(B) P30000 the first year, P40000 the second year, P50000 the third year, and P60000 forthe next 5 years with all rentals paid at the beginning of each year.If money is worth 12%, which is the better offer?Question 888 M A mining company CEO wants to help provide college education for the daughter of a high performance underground worker. He can afford to invest $750/yr. for the next 4 years, beginning on the student’s fourth birthday. He wishes to give the future student $5,000 on her 18th, 19th, 20th, and 21st birthdays, for a total of $20,000. Assuming 6% interest, what uniform annual investment will he have to make on the girl’s 8th through 17th birthday? show all steps clearly Full explain this question and text typing work only thanks1. Engr. Dela Cruz, the buyer of a certain equipment may pay either in 4,000.00 cash down paymentand 2,000.00 annually for the next 6 years, or pay 5,000.00 cash down payment and 2,000.00 annuallyfor the next 5 years. A.) What type of annuity are the options of Engr. Dela Cruz?B.) If money is worth 12% compounded annually, which method of payment is better for Engr.Dela Cruz and how much?