Use an incremental analysis to select the best option for a 10% MARR. Don’t skip any steps in the (hint: what is the first comparison?). process
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- How much would you invest today in order to receive $30,000 in each of the following independent scenarios: 10 years at 9% 8 years at 12% 14 years at 15% 24 years at 10% Use the appropriate EXCEL spreadsheet in the Chapter11 TVOM Examples.xlsx downloadto complete the following table: Present Value (PV) Rate Time (Years) Future Value (FV) A 9% 10 $30,000.00 B 12% 8 $30,000.00 C 15% 14 $30,000.00 D 10% 24 $30,000.00 PLEASE NOTE: All dollar amounts will be with "$" and commas as needed and rounded to two decimal places (i.e. $12,345.67). Use the present value of $1 table in the Appendix B PV FV Tables downloadand verify that your answers above are correct: Future Value (FV) Rate Time (Years) FV Factor (from Table) Present Value (PV) A $30,000.00 9% 10 B $30,000.00 12% 8 C $30,000.00 15% 14 D $30,000.00 10% 24 PLEASE NOTE: All PV Factors will be rounded to three decimal places (i.e. 1.234). All dollar amounts will be with "$" and…A firm evaluates all of its projects by applying the IRR rule. If the required return is 18 percent, will the firm accept the following project?CF0 = -$30,000CO1 = $20,000C02 = $14,000C03 = $11,000 yes or noCongratulations. You have just won first prize in a quantitative competition. You have the following choices to receive your winnings: Option I: Receive $3,000,000 immediately. Option II: Receive five $1,000,000 payments paid every other year beginning in year T=2. For example, you receive a $1 million dollars payment in year T=2, T=4, T=6, T=8, and T=10. a. What is the present value of each option if R=0.06? Which option would you choose? b. What is the present value of each option if R=0.12? Which option would you choose? c. What interest rate R will make the present value of both options equal? Hint: use Excel’s Data – What If - Goal Seek analysis Show what you do to se up goal seek for c
- Congratulations. You have just won first prize in a quantitative competition. You have the following choices to receive your winnings: Option I: Receive $3,000,000 immediately. Option II: Receive five $1,000,000 payments paid every other year beginning in year T=2. For example, you receive a $1 million dollars payment in year T=2, T=4, T=6, T=8, and T=10. a. What is the present value of each option if R=0.06? Which option would you choose? b. What is the present value of each option if R=0.12? Which option would you choose? c. What interest rate R will make the present value of both options equal? Hint: use Excel's Data - What If - Goal Seek analysis Show what you do to se up goal seek for c Also take snap shots from excel and how did you get the answers, please show work for c!!!Congratulations. You have just won first prize in a quantitative competition. You have the following choices to receive your winnings: Option I: Receive $3,000,000 immediately. Option II: Receive five $1,000,000 payments paid every other year beginning in year T=2. For example, you receive a $1 million dollars payment in year T=2, T=4, T=6, T=8, and T=10. a. What is the present value of each option if R=0.06? Which option would you choose? b. What is the present value of each option if R=0.12? Which option would you choose? c. What interest rate R will make the present value of both options equal? Hint: use Excel’s Data – What If - Goal Seek analysis.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%. Then decide which product should be selected and why ?
- Direction: Solve what is being asked and show your complete and neat solution. (ROUND OF PV FACTORS TO 4 DECIMAL PLACES, ROUND OF FINAL ANSWER TO TWO DECIMAL PLACES. IN MCQs CHOOSE THE BEST ANSWER) 4.) You have the opportunity to buy a perpetuity that pays P1,000 annually. Your required rate of return on this investment is 15 percent. You should be essentially indifferent to buying or not buying the investment if it were offered at a price of?NOTE:-I request you dnt use excel to solve.and solution is typed or on white paper only. Q)You have 30,000 to invest and want the greatest yield from your investment after five years. You have two plans to choose from: Plan A- 6.9%compouned monthly or Plan B- 7% compound quarterly (a) Which plan would you take to achieve this? (b) How much will you have at the end of five years?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%
- Complete the following analysis of cost alternatives and select the preferred alternative. The study period is 10 years and the MARR=15%per year. "Do Nothing" is not an option. A B C D Capital investment $15,000 $15,900 $13,500 $18,000 Annual costs 240 310 450 90 Market value at EOY 10 900 1,250 1,750 2,000 FW (15%) −$64,656 −$69,369 ??? −$72,647 The FW of the alternative C is ... nothing.(Round to the nearest dollar.) Select the preferred alternative. Choose the correct answer below. A. Alternative D B. Alternative B C. Alternative C D. Alternative A2. Your firm is considering the following 3 mutually exclusive alternatives. Interest rate is10%. A B CInitial Cost $35,000.00 $21,000.00 $42,000.00Annual Benefit $4,200.00 $3,300.00 $5,000.00Salvage value 0 $1,000 $1500Project life Forever 20 year 50 a. Calculate the Benefit-Cost ratio of each projectb. Which of the 3 alternatives should be selected using B/C ratio analysis (show yourwork)?An investment offers the following: a series of $1000 annual payments, starting one year from now, for a total of 12 payments. If your opportunity cost (as an EAR) is 5%, what is the investment worth to you today? Group of answer choices $11,079.20 $9,214.56 $10,103.26 $8,863.25 $10,241.19 Give typing answer with explanation and conclusion
