Evaluate the two alternatives A and B and decide the economic justified alternative using: Present worth method, Annual worth method , Future worth method I.R.R method , E.R.R Method , E.R.R.R method M.A.R.R = 15% , the details of alternatives are shown in the table below Alternatives A B Investments $60,000 $75,000 Useful life (years) 10 5 Annual disbursements $25,000 $35,000 Annual revenues $45,000 $60,000 Salvage values $5,000 $10,000
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- 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 ∞ 10The B.T. Knight Corporation is considering two mutually exclusive pieces of machinery that perform the same task. The two alternatives available provide the following set of after-tax net cash flows: Year Equipment A Equipment B 0 ($3,100) ($3,380) 1-3 1,426 1-4 1,204 NPV at 11% 385 355 1. Determine which model should be purchased using the Replacement Chain (RC) method. 2. Calculate the equivalent annual annuity (EAA) for each model.Determine which alternative, if any, should be chosen based on Annual Worth method using 15% MARR. Use Repeatability Method. Note: Show final answer to the nearest WHOLE NUMBER and show complete solution Answer the following: a. The Annual Worth of Alternative A is = $ Blank 1 b. The Annual Worth of Alternative B is = $ Blank 2 c. Choose Alternative (Type only A or B) = Blank 3
- 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 .William and Raj Company provided the following information for the year:Projected benefit obligation - January 1 P 700,000Fair value of plan assets - January 1 560,000Pension benefits paid during the year 50,000Current service cost for the year 350,000Past service cost for the year (vesting period 5 years) 85,000Actual return on plan assets 36,000Contributions to the plan 300,000Actuarial loss due to change in assumptions on projected benefit obligation 40,000Discount or settlement rate 10%Expected return on plan assets 12%1. What is the employee benefit expense for the current year?2. How much is the actuarial gain/loss on return on plan assets?3. What is the prepaid/accrued balance of the pension at yearend?4. How much is the defined benefit cost?5. If the pension benefits paid during the year is worth P50,000 but the company was able to pay only P45,000, what would be the employee benefitexpense for the current year assuming the above given is the same?An owner can lease her building for 100,000 per year for three years.aThe explicit cost of maintaining the building is cost 35,000 and the implicit cost is 50,000.All revenue are received and cost are borne at the end of each year.If the interest rate is 4 percent,determine the present value of the stream of: (I) accounting profit(II) ecenomic profits
- Consider an income property that is under evaluation for purchase with a $489,398 loan, 3.3% interest rate, compounded annually, amortized over 29 years. The NOI at the end of year 1 is $48,148, year 2 is $54,192, and year 3 is 55,470. At the end of year 3, the property is estimated to sell for $525,700. Discount the equity cash flows over the 3-year holding period at 6.0 percent. Using the principles of mortgage equity capitalization, what is the estimated total property value with a holding period of 3 years? Please post step by step solve.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 alternativeThe goodwill of Blue Devil Inc. is $1,200,000. What’s the amortization expense per year? Group of answer choices $100,000 Do not do amortization $1,200,000 $1
- An equipment’s cost is P50,000 with an economic life of 10 years. The equipment can be sold at P5,000 after 10 years. At what price can the equipment be sold after 5 years. (a) Using Straight line Method. (b) Using Sum of the years digit method. (c) Using Double Declining Balance Method (d) Using Declining Balance Method (e) Using Sinking Fund at 5%.Answer: a, bEstimate the value of the property using the income approach based on the following facts: Net operating income annually for next 3 years is $400000 At end of three years, property is sold with an existing cap rate of 10% and a commission of 4% on sale The discount cap rate is the same as the existing cap rate and the operating income is assumed to be received at year endBrendan & Kelly purchased an item valued at $147,000. They paid $22,050 down and financed the rest at 2.8% compounded annually. To reduce the amount owing to $32,490 at the end of 3 years, what size of equal payments must Brendan & Kelly make at the end of each three months? Enter the present value as a positive value in the PV box below. Enter PMT and FV as positive or negative values based on PV being positive. Report PMT accurate to the nearest cent. P/Y = C/Y = N = I/Y = PV = PMT = FV= The size of each equal payment is (enter a positive value) $ .__________________