The proposal of Mutual Savings Fund will cost ₱500,000. The benefits at the end of the first year are estimated to be ₱100,000, increasing ₱10,000 per year in subsequent years. Assuming a 12% interest rate, with no salvage value and an 8-year analysis period, compute the benefit cost ratio.
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The proposal of Mutual Savings Fund will cost ₱500,000. The benefits at the end of the first year are estimated to be ₱100,000, increasing ₱10,000 per year in subsequent years. Assuming a 12% interest rate, with no salvage value and an 8-year analysis period, compute the benefit cost ratio.
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- 6. Myrvin made a 12-percentage-point investment of PHP10,000.00. According to the 72-year rule, it would take her money years to double. Group of answer choices 7 6 5 4The proposal of Mutual Savings Fund will cost P500,000. The benefits at the end of the first year are estimated to be P100,000, increasing P10,000 per year in subsequent years. Assuming a 12% interest rate, with no salvage value and an 8-year analysis period, compute the benefit cost ratio.The municipality of Smallville has arranged to borrow Php30 million in order to implement several public projects (flood control, school security, etc.) The interest rate will be 3% per year, payable at the end of each year. This Php30 million debt will be retired by making principal payment of Php5 million at the end of each year. The board of Supervisor is concerned that it will take too long to pay off this debt. How many years will it take to retire this Php30million debt and its associated interest payments in years?
- The Philippine Institute of Industrial Engineers (PIIE) is planning to put up its own building. Two proposals being considered are: A: The construction of the building now to cost Php 400,000 B: The construction of a smaller building now to cost Php 300,000 and at the end of 5 years to be added to cost Php 120,000 By how much is proposal A more economical than proposal B if interest is to be neglected?A piece of new equipment has been proposed by engineers to increase the productivity of a certain manual welding operation. The investment cost is $10,000, and the equipment will have a market value of $1,500 at the end of a study period of five years. Increased productivity attributable to the equipment will amount to $5,000 per year after extra operating costs have been subtracted from the revenue generated by the additional production. Suppose that ε = MARR = 25% per year. What are the alternatives external rate of return, and is the alternative acceptable?A firm is considering purchasing equipment that will reduce cost by Php 400, 000. The equipment costs Php 300,000 and has a salvage value of Php 50,000 and a life of 7 years. The annual maintenance cost is Php 6,000. While not in use by the firm, the equipment can be rented to others to generate an income of Php 10,000 per year. If money can be invested for an 8% return, is the firm justified in buying the equipment? Solve the Problem using Rate of Return Method show your solution
- The company uses a 10% discount rate and the total-cost approach to capital budgeting analysis. The working capital required under the new system would be released for use elsewhere at the conclusion of the project. Both alternatives are expected to have a useful life of ten years.1. The net present value of the overhaul alternative (rounded to the nearest hundred pesos) is: P(750,300) P(987,400) P(725,800) P(975,800) 2. The net present value of the new system alternative (rounded to the nearest hundred pesos) is: P(552,900) P(758,400) P(862,900) P(987,400). A geotechnical engineering firm has been awarded a job to design the foundation of an office building. The project is postponed and will not start for four more years. The firm needs to estimate the present worth of the costs of the project. At the year four, the cost will be $175,000 decreasing by $50,000 per year for the next three years. If the interest rate is 4%, what is the present worth of the projected cost of the project?An investment of 15,000,000 yields net annual revenues of 11,500,000. What is the simple payback period?
- An investment of RM50,000 can be made in a project that will produce a uniform annual revenue of RM3,170 for seven years and then have a market (salvage) value of RM8,100. Expenses will be RM1,100 in second year and saving RM2,100 in third year. Second investment of RM4, 000 in fifth years was made to increase the project operation. The company is willing to accept any project that will earn 10% per year or more before incomes taxes, on all invested capital. Show whether this is desirable investment by using the Present Worth method. Draw the cashflow diagram.Project A requires an immediate investment of $8000 and another $6000 in three years. Net returns are $4000 after two years, $12,000 after four years, and $8000 after six years. Project B requires an immediate investment of $4000, another $6000 after two years, and $4000 after four years. Net returns are $3400 per year for seven years. Determine the net present value at 10%. Which project is preferable according to the net present value criterion?The company has created an investment plan to fund the next generation heat exchanger they plan to develop. The plan calls for an initial investment of $7 million, decreasing by $1 million per year through year 5. During years 6 through 10, no deposits or withdrawals will be made. At the end of year 10, $20 million will be withdrawn to initially fund the development program. Subsequent withdrawals will decrease uniformly each year thereafter through year 15. An investment opportunity has been identified that will return 10% per year, compounded monthly. Determine the withdrawals in years 11–15 that will completely exhaust the funds by the end of year 15