The following cash flows has an interest rate of 9% per year, compounded annually. Use Annual worth analysis to choose the best alternative. Draw CFD, and Enter the Answer in 'B2' Cell above. Initial Cost Annual Benefit Useful Life Salvage Value Alternative A $210,000 $62,000 6 $25,000 Alternative B $750,000 $11,000 18 $165,000
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- A firm is considering two alternatives that have no salvage value. A B Initial cost $9000 $4700 Uniform annual benefits 1400 1650 Useful life, in years 10 5 At the end of 5 years, another B may be purchased with the same cost, benefits, and so forth. (a) Graph the EUAC or EUAW for the alternatives. Construct a choice table for interest rates from 0% to 100%. (b) If the MARR is 15%, which alternative should be selected? please solve it in Excel & show me all the stepsP = 10000S = 1000Annual Savings = 4000Annual Maintenance Cost = 3000i = 5%,n = 7 years Which formula below will correctly calculate NPW? -10000 (P/A, 5%, 7) + 1000 (P/F, 5%, 7) + 4000 (P/A, 5%, 7) - 3000 (P/A, 5%, 7) -10000 (A/P, 5%, 7) + 1000 (A/F, 5%, 7) + 4000 - 3000 None of the above -10000 + 1000 + 4000 - 3000 -10000 (A/P, 5%, 7) + 1000 (A/F, 5%, 7) + 4000 + 3000SHOW COMPLETE DETAILS AND SOLUTION . 4. A new civil engineer employee start a savings plan in which he saves P 10,000 eachyear for 15 years. He makes her first payment at age 22 and after paying for 15 yearsshe leaves the accumulated sum in the savings plan until she reach age 65. If thesavings plan pays 10% per year, how much will be in the savings account when sheage 65?5. Mr. Jo needs P 4,000,000 immediately to pay for a new home. Having insufficientfund for this, he borrows P 2,000,000 from an insurance company and repay the loanevery six months for 15 years, the first payment being at the end of 8 years from now.If the insurance company charged him 8% compounded semiannually, how much isthe amount of each payment?
- 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 3Problem Solving: Pls. Include your cash flow diagram. Show complete solution.1. A newly-built business property, containing space for a store and two offices, can bepurchased for P1, 200, 000. A prospective buyer estimates that during the next 10 years hecan obtain annual rentals of at least P458, 460 from the property and that the annual out-of-pocket disbursements will not exceed P60, 000. He believes that he should be able todispose of the property at the end of 10 years at not less than P700, 000. Annual taxes andinsurance will total 2.5% of the first cost.(a) Assume he has sufficient equity capital to purchase the property, and that the averagereturn he is obtaining from his capital is 20%. Would you recommend the investment? UseROR method. (b) What recommendation would you make if he had to borrow 25% of the required capital,on the basis of a 10-year amortization with interest of 18%? Use Annual Worth Method(c) If the entire capital can be obtained by floating bonds at 15% that…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?
- 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?ligthing first cost of investment is $120,000. annual mtnce expenses are expected to be $6600 for the first 22 years and $9000 for each year thereafter. N=infinety amt of time, interest,i=12% per year, what is the capatalized cost of this project? the annuity table for value N=22 as follows: F/P=12.1003 P/F=.0826 P/A=7.6446 I tried mutliple ways to show and I can't figure it out. the answer is $176,653. Any suggestions is greatly appreciated. ThanksAn investor will invest $1,000 now and expect to receive $10 for each of the next 10 years plus $1,000 at the end of the 10th year. Her cash flow at time period 0 is Select one: a. $-990 b. $1,010 c. $1,000 d. -$1,000
- A project is being considered that has a first cost of $12,500, creates $5000 in annual cost savings, requires $3000 in annual operating costs, and has a salvage value of $2000 after a project life of 3 years. If interest is 10% per year, which formula calculates the project’s present worth? (a) PW = 12,500(P/F, 10%, 1) + (− 5000 + 3000) (P/A, 10%, 3) − 2000(F/P, 10%, 3) (b) PW = − 12,500 + (5000 − 3000) (P/A, 10%, 3 ) − 2000(P/F, 10%, 3) (c) PW = 12,500(F/P, 10%, 3) + (5000 − 3000) (F/A, 10%, 3) + 2000 (d) PW = − 12, 500 + 5000(P/A, 10%, 3) − 3000 (P/A, 10%, 3) + 2000(P/F, 10%, 3)Year 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.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 thanks