f a copy center is considering the purchase of a new copy machine with an initial investment cost of $150,000 and the center expects an annual net cash flow of $20,000 per year, what is the payback period?
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- The following cash flows result from a potential construction project for your company: 1. Receipts of $505,000 at the start of the contract and $1,200,000 at the end of the fourth year 2. Expenditures at the end of the first year of $400,000 and at the end of the second year of $900,000 3. A net cash flow of $0 at the end of the third year. Using an appropriate rate of return method (Approximate ERR), for a MARR of 20%, should your company accept this project (Perform all calculations using 5 significant figures and round your answer to one decimal place. Also remember that text answers are case-sensitive):? Answers entered using text are case sensitive! What is the approximate ERR for this project? Number Should your company undertake this project? (Enter either 'Yes' or 'No'): %You have agreed to make investment in your friends agricultural farm. This would require an amount of $20,000 as initial investment on your part. Your friend promises you revenue (before expenses) of $3600 per year the first year and thereafter the revenue increases by $200 per year. Your share of the estimated annual expenses is $1000. You are planning to invest for six years. Your friend has made the commitment to buyout your share of the business at that time for $24000. You have decided to set a personal MARR of 15% per year. Judge the profitability of the investment project by using Future Worth (FW) method.Suppose that you purchase a tractor for $170,000 and sell it in 10 years for $50,000. What is the annualized cost (capital recovery) if your required return on capital is 12%?
- Using Microsoft Excel, create an investment cash-flow diagram that will have a present worth of zero using MARR = 12%. The study period needs to be exactly 9 years and each year should have at least one unique cash-flow that is different from the cash-flows over the other years. Your answer should contain a table showing the cash-flows for each year and a graphical representation of the cash-flows (cash-flow diagram).What is the i*% for the given project? (Round answers to the third number after the decimal) Cash Flow 0 ($7,000) 1 $3,600 2 $2,900 3 $0 4 $1,300 5 $500What do you mean by internal rate of return (IRR)? Find the IRR of an investment having initial cash outflow of $213,000. The cash inflows during
- The following cash flows result from a potential construction project for your company: 1. Receipts of $565,000 at the start of the contract and $1,200,000 at the end of the fourth year 2. Expenditures at the end of the first year of $400,000 and at the end of the second year of $900,000 3. A net cash flow of $0 at the end of the third year. A Using an appropriate rate of return method (Approximate ERR), for a MARR of 20%, should your company accept this project (Perform all calculations using 5 significant figures and round your answer to one decimal place. Also remember that text answers are case-sensitive):? Answers entered using text are case sensitive! What is the approximate ERR for this project? Number 5 Should your company undertake this project? (Enter either 'Yes' or 'No'): 198 团An energy management system that can save $8,040 per year for four (4) years, expenses are $2,000 per year, can be installed at a cost of $20,000. At the end of four (4) it is expected to be sold for $1,250. Using the end of year convention, the rate of return on this planned investment is most nearly: 1.ROR = 9.81% 2. ROR = 10% 03. ROR = 9.5% 04.ROR = 6%The city council has approved the building of a new bridge over Running Water Creek. The bridge will cost $17,000 for initial construction and have an annual maintenance cost of $1,000. The council plans to withdraw money from the city’s Bridges and Highways account to open a special account to cover the initial construction and to fund a perpetuity to cover the maintenance costs forever. How much money must be withdrawn from the Bridges and Highways account if the city can expect to earn 5% on the special account? a. $1,000 b. $17,000 c. $18,000 d. $37,000.
- Suppose Omni Consumer Products's CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost; however, she does know that the project's regular payback period is 2.5 years. Year Cash Flow Year 1 $350,000 Year 2 $400,000 Year 3 $475,000 Year 4 $475,00 If the project's weighted average cost of capital (WACC) is 9%, what is its NPV? $373,562 $336,206 $317,528 $429,596Projects A and B are mutually exclusive. The minimum attractive rate of return (MARR) is 12%. Using rate of return analysis, which project should be selected? If the image fails to load here, go to https://www.dropbox.com/s/ld6wctqieu8jgwp/ROR.jpg >> Year 0 A B - $750 - $1,150 B-A - $400 123 $200 $300 $100 $200 $350 $150 $200 $400 $200 4 $600 $700 $100 ROR 17.68% 16.44% 13.69% Project A Project B Both Project A and B Select none of the project. Insufficient information to make a decision.An equipment can be purchased for $84,000. Its expected useful life is eight years at which time its market value will be 5% of its purchased cost. The equipment is expected to generate an annual receipts less expenses of $18,000 per year over the eight-year study period. The company's MARR is set at 16%. a. What is the simple payback period? b. Determine if this is a good investment using the Internal Rate of Return(IRR) method. c. Using the External Rate of Return(ERR) method is this investment acceptable?