Can some one please help me to solve the following question. Please and thank you In comparing alternatives, I and J by the present worth method, the equation thatyields the present worth of alternative I is:Alternative IAlternative JInitial cost, $- 150,000- 250,000Annual income, $ per year24Annual expenses, $ per year20,00040,000-9,000-14,000Salvage value, $Life, years25,00035,00036.The interest rate is 15% per year.a) PW I=-150,000+11,000(P/A,15%,3)+25,000*(P/F,15%,3)b) PW I=-150,000+11,000(P/A,15%,6)+175,000*(P/F,15%,3)+25,000(P/F,15%,6)OC) PW I=-150,000+11,000(P/A,15%,6)-125,000*(P/F,15%,3)+25,000(P/F,5%,6)d) PW I=-150,000+11,000(P/A,15%,6)+25,000*(P/F,15%,6)

Present worth will be the difference between total present worth of cash inflows and total present…

In comparing alternatives, I and J by the present worth method, the equation that yields the present worth of alternative I is: Alternative I Alternative J Initial cost, $ -150,000 - 250,000 Annual income, $ per year 20,000 40,000 Annual expenses, $ per year %24 -9,000 -14,000 Salvage value, $ Life, years 25,000 35,000 The interest rate is 15% per year. a) PW I=-150,000+11,000(P/A,15%,3)+25,000*(P/F,15%,3) O b) PW I=-150,000+11,000(P/A,15%,6)+175,000* (P/F,15%,3)+25,000(P/F,15%,6) Oc) PW I=-150,000+11,000(P/A,15%,6)-125,000(P/F,15%,3)+25,000(P/F,5%,6) O d) PW I=-150,000+11,000(P/A,15%,6)+25,000*(P/F,15%,6)

In comparing alternatives, I and J by the present worth method, the equation that yields the present worth of alternative I is: Alternative I Alternative J Initial cost, $ -150,000 - 250,000 Annual income, $ per year 20,000 40,000 Annual expenses, $ per year %24 -9,000 -14,000 Salvage value, $ Life, years 25,000 35,000 The interest rate is 15% per year. a) PW I=-150,000+11,000(P/A,15%,3)+25,000(P/F,15%,3) O b) PW I=-150,000+11,000(P/A,15%,6)+175,000 (P/F,15%,3)+25,000(P/F,15%,6) Oc) PW I=-150,000+11,000(P/A,15%,6)-125,000(P/F,15%,3)+25,000(P/F,5%,6) O d) PW I=-150,000+11,000(P/A,15%,6)+25,000*(P/F,15%,6)

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

Similar questions

An investor has a certain amount of money available to invest now. Three alternative investmentsare available. The estimated profit in Kwacha of each investment under each economic conditionare indicated in the following payoff table:Event Investment SelectionA B CEconomy declines 500 -2000 -7000No charge 1000 2000 -1000Economy Expand 2000 5000 20,000Based on his own past experience, the investor assigns the following probabilities to eacheconomic condition:( )( )( )Economy declines 0.30No change 0.50Economy expands 0.20PPP===vii. Compute the coefficient of variation for each investment. viii. Compute the return-to-risk ratio (RTRR) for each investment.ix. Based on (vii) and (viii), what investment would you choose?
Which of the two alternatives would you select under the net present value? (PV factor - 10 percent) Assume a $100,000 investment and the following cash flows for two alternatives: INVESTMENT A ($) 30,000 50,000 20,000 60,000 INVESTMENT B (S) 40,000 30,000 15,000 15,000 50,000 YEAR 1 3 4
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
Study the information given below and determine, based on its Net Present Value (NPV), whether the investment should be favourably considered for acceptance or not. INFORMATIONLotto Ltd plans an investment in non-current assets costing R3 000000 . The non-current assets are expected to have a four-year life, with the following net profits anticipated:[Year 1,R350 000],[Year 2,R750 000],[Year 3,R200 000],[Year 4,R170 000]] Working capital amounting to R200 000 will be required at the start of the project. All the working capital will be recovered at the end of year 4 . The expected scrap value of the non-current assets is R400 000. The cost of capital is 12%. Ignore taxes.
Lipsion Ltd company is thinking about investing in one of two potential new productsfor sale. The projections are as follows: year revenue/ product s revenue/ product v0 (150,000) outlay (150000) outlay1 14000 150002 24000 253333 44000 520004 84000 63333 Calculate NPV of both products (to 1 d.p.) assuming a discount rate of 7%
Compare the following alternatives based on the equivalent uniform annual value analysis, using a 15% annual interest rate with continuous capitalization. Alternative A Alternative B Initial Cost $18000 $25000 Annual Cost $4000 $3600 Salvage Value $3000 $2500 Life (years) 3 4
A firm whose cost of capital is 10% is considering two mutuallyexclusive projects A and B, the cash flows of which are as below: YearProject AProject B7050.00080.000162,50096.170Suggest which project should be taken up using (i) net present
3 Approximately , what is the value of ( P ) it F - 114140 , n - 9 years , and in 8 % per year ? a . 57098 b . 76512 c 47392 d . 68518 Approximately , what is the value of the total Present worth ( where Ptotal = PA + PG ) if G ( arithmetic gradient ) -50 , n - 11 years , A - 380 and i 10 % per year ? a 3788 b . 5076 c 3145 d 4546
Lipsion Ltd company is thinking about investing in one of two potential new productsfor sale. The projections are as follows: year revenue/ product s revenue/ product v0 (150,000) outlay (150000) outlay1 14000 150002 24000 253333 44000 520004 84000 63333 Calculate the IRR for Product V only using 1% and 17% to 2 d.p.
Kk201. An asset produces $150 in two years, and $250 in four years, and the current price has been calculated toreflect a rate of return of 9% annually. Using the definition that convexity = second derivative of pricedivided by price, find the convexity of this asset evaluated at the annual yield rate of 9%.
Find the profitability index for Shanfari Company if the initial investment is 7900 OMR and the cash Inflows are as follows: Year 1 =1350 OMR; Year 2 =2400 OMR; Year 3=2450 OMR and Year 4=2500 OMR. Use discount rate as 5.05%. Select one: a. 1.15 Accept b. None of the options c. 1.15 Reject d. 0.96 Reject e. 0.96 Accept
For the following table, assume a MARR of 15%per year and a useful life for each alternative of eightyears which equals the study period. The rank-orderof alternatives from least capital investment to greatestcapital investment is Z → Y → W → X. Completethe incremental analysis by selecting the preferredalternative. “Do nothing” is not an option. (6.4)FE PRACTICE PROBLEMS 307Z → Y Y → W W → X! Capital −$250 −$400 −$550investment! Annual cost 70 90 15savings! Market 100 50 200value! PW(15%) 97 20 ???(a) Alternative W (b) Alternative X(c) Alternative Y (d) Alternative ZThe following mutually exclusive investment alternatives have been presented to you.

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