Compute the AW (annual worth) of The Bella. Remember to include your calculations in your supporting work.Round your answer to the nearest dollar. Four alternative designs are being considered for a pet-exercising treadmillI. The company's MARR is 18%. The cash flows associated with each are givenin the following table.The JudasThe LancelotThe BellaThe Lilo$120,000$50,000$130,000$141,000$50,000$13,000$18,000Capital Investment$160,000Annual RevenuesAnnual Expenses$50,000$50,000$20,000$15,000$14,000$15,000$15,000Refurbish at EOY 5$23,000$4,000$23,000$4,000Market Value after 10 years$5,000IRR???21.8%21.6%17.7%

To find the AW of Bella we take following steps : First we formulate Net cash flow : Year 0 : - (…

The Judas The Lancelot The Bella The Lilo Capital Investment Annual Revenues |Annual Expenses $120,000 $160,000 $130,000 $50,000 $141,000 $50,000 $50,000 $50,000 $15,000 $23,000 $4,000 $20,000 $13,000 $18,000 $5,000 $14,000 $15,000 Refurbish at EOY 5 $23,000 $4,000 Market Value after 10 years $15,000 IRR ??? 21.8% 21.6% 17.7%

The Judas The Lancelot The Bella The Lilo Capital Investment Annual Revenues |Annual Expenses $120,000 $160,000 $130,000 $50,000 $141,000 $50,000 $50,000 $50,000 $15,000 $23,000 $4,000 $20,000 $13,000 $18,000 $5,000 $14,000 $15,000 Refurbish at EOY 5 $23,000 $4,000 Market Value after 10 years $15,000 IRR ??? 21.8% 21.6% 17.7%

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 2E

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