Question 4A local company is considering in investing in new, more productiveequipment Data concerning the three best aternatives are show below. Theuseful life of the equipment is 20 years and MARR =9KWhat is the incremental return on the first incremental pair (ahen andered byincreasing investment) RRIArsWhat is the incremental IRR on the second pair?ArsWhich alternative would you select?Ans. XBCInitialS66.000.00$55,000.00 $23.500.00 $17,32000investment$7.830.00Annual net$6.093.00 $3.177.00 $165300incomeSalvage value $4.500.00 $3.23200 $1.73a01237%S8.230.0010.40%7.4659.35%IRR

Internal rate of return is a strategy for working out a venture's pace of return. The term interior…

l company is consi pment Data concerning the three best Ful life of the equipment is 20 years and MARR=9A at is the incremental return on the first incremental pair bahen ardered by creasing investment) IRRI Ans LS Ars L What is the incremental IRR on the second pair? Ans X Which alternative would you select? C

l company is consi pment Data concerning the three best Ful life of the equipment is 20 years and MARR=9A at is the incremental return on the first incremental pair bahen ardered by creasing investment) IRRI Ans LS Ars L What is the incremental IRR on the second pair? Ans X Which alternative would you select? C

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Your company is considering the introduction ofa new product line. The initial investment required forthis project is $500,000, and annual maintenance costsare anticipated to be $45,000. Annual operating costswill be directly proportional to the level of productionat $8.50 per unit, and each unit of product can be soldfor $65. If the MARR is 15% and the project has a life of5 years, what is the minimum annual production levelfor which the project is economically viable? With Cash Flow Thank You
You are considering an open-pit mining operation. The cash flow pattern issomewhat unusual since you must invest in some mining equipment, conductoperations for two years, and then restore the sites to their original condition.You estimate the net cash flows to be as follows: N Cash flow 0 -$1,600,0001 1,500,0002 1,500,0003 -700,000 What is the approximate rate of return of this investment?(a) 25%(b)38%(c) 42%(d)62%
dont use excel i will 5 upvotes. Assuming a firm’s weighted average cost of capital is 12%, what is the discounted payback period of the following project? Year Net Cash Flow 0 -$375,000 1 $200,000 2 $200,000 3 $350,000 Group of answer choices a. 2.40 years b. 2.15 years c. 2.21 years d. 1.88 years
Give typed explanation only The difference between the present worth of the cash flows is referred to as the net future worth (NFW) True Or False?
1.b You are faced with a decision on an investment proposal. Specifically, the estimated additional income from the investment is $125,000 per year; the investment cost is $400,000; and the first year estimated expense of $20,000 and will increase a rate of 5% per year. Assume an 8-year analysis period, no salvage value, and MARR = 15% per year. What is the ERR ( Ԑ=MARR) of this proposal? show whole solution, not in excel please
(Need answer ASAP) A man decided to Invest in an equipment worth PHP 12,000,000.00 capital with the following data: Expected revenue - PHP 5.8M/year Cost of Operation and Maintenance - PHP2.4/year Taxes and Insurance. - 2% of the first cost/year Expected earnings is 12% minimum Life of the equipment is 5 years with expected value of PHP1.2M after 5 years a. Determine the desirable investment using ROR method and AW method b. What are the ways and means to make it desirable investment c. In what case we should use the present worth and future worth method of economy study?
Use Formula, not the table. Your company is environmentally conscious and is looking at two heating options for a new researchbuilding. What you know about each option is below, and your company will use an annual interest rate of 8%for this decision: Gas Heating Option: The initial equipment and installment of the natural gas system would cost $225,000 rightnow. The maintenance costs of the equipment are expected to be $2,000 per year, starting next year, for eachof the next 20 years. The energy cost is expected to be $5,000, starting next year, and is expected to rise by 5%per year for each of the next 20 years due to the price of natural gas increasing. Geothermal Heating Option: Because of green energy incentives provided by the government, the geothermalequipment and installation are expected to cost only $200,000 right now, which is cheaper than the gas lines.There would be no energy cost with geothermal, but because this is a relatively newer technology, themaintenance costs…
is considering a new 3- year - long project that would involve using specialized scanning software to scansubmitted screenshots in low resolution and convert them into high resolution text documents that there's currently astrong market for. Course Hero requires a 17 percent annual return on this uncertain project, high enough tocompensate for the underlying uncertainty of future cash inflows. A decision to accept the project would be followed byan immediate investment of $5.8 million into purchasing the software. At the end of the project Course Hero is hoping tobe able to find a different company in similar line of business that would be willing to pay $449, 400 for the software andits future ownership.other similar software, its value will be dropping over its economic life according to the 3- yearMACRS depreciation schedule. (See this MACRS Table) Course Hero pays taxes on its annual income and other taxablecash flows according to a 32 % tax rate. Course Hero estimates $5, 136, 000…
Firm 1 has £10,000 to invest. Firm 2 offers Firm 1 the following proposal: invest £10,000now and get £11,000 back in 12 months. The returns on this investment are guaranteed, and there are no other costs involved? What should Firm 1 do? b. Firm 1 is considering investing their profit into any of the following two projects. Investment appraisal techniques have been used, and the following results found: Project A Project B Internal Rate of Return 6% 8% Net present value 88000 61000 which project should Firm 1 select?
An electric cooperative is considering the use of a conicrete electric pole in the expansion of its power distribution lines A concrete pole costs 18.0o0 each and will last 20 years The company is presently using creosoted wooden poles which cost 12.000 per pole and will last 10 years. If money is worth 12 percent, which pole shoulcd be used? Assurne annual taxes amount to1 percerit of first cost and zero salvage value in both cases a) Use rate of return method b) if the maximum retum on investment is 20% what is the justifiable arnount that can be paid for concrete electric pole?
An investment project costs $100,000. ll is expected to have an annual net cash flow of $40,000 for 5 years. What is the project's payback period?(a) 2.5 years(b) 3.5 year(c) 4.5 years(d) 5 years
Abbott wants to increase their marketing for Pedialyte leading up to St. Patrick's Day this year. They launch a Superbowl ad on 2/13/2022, costing them $5,000,000, and they launch a secondary campaign in early March (3/6) costing $800,000. They expect to see sales starting at $500,000 on 2/20, increasing by 20% every week for 6 weeks. Assuming a MARR of 12%, what is the present value of this project at the start of the campaign if they stop attributing sales to this on 4/3/2022?O. $602,449O. $597437O. $563,446O. $321,998