A certain service can be performed satisfactorily by a new process, which has a capital investment cost of P400,000.00, an estimated life of 10 years, no market value, and annual receipts of P120,000. Assuming a MARR of 18%, find the Future Worth of this process and specify whether you would recommend it.
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A certain service can be performed satisfactorily by a new process, which has a capital investment cost of P400,000.00, an estimated life of 10 years, no market value, and annual receipts of P120,000. Assuming a MARR of 18%, find the Future Worth of this process and specify whether you would recommend it.
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- EncryptCo is considering a project with a $50,000 first cost that returns $12,000 per year. Assume that it will have a salvage value of $6500 at the end of its service life. The MARR is 12 percent. (a) Calculate the payback period for this project. (b) Calculate the discounted payback period for this project. Use Excel to do this and include the Excel output in your Assignment report.To increase production, an engineer is considering the purchase of a new machine. The machine costs P350 000.00 and will have a salvage value of P10 000.00 at the end of eight years. Operating and maintenance cost is expected to be P4000.00 per year. With this machine. Annual revenue is expected to increase by P85 000.00. Using future worth analysis and a 15% rate of return, determine if the purchase should be recommended. (Ans. FT = P51 214.34 )-PLEASE USE AN ACTUAL FORMULA NOT AN EXCELAlternative R has a first cost of $76,000, annual M&O costs of $56,000, and a $20,000 salvage value after 5 years. Alternative S has a first cost of $175,000 and a $52,000 salvage value after 5 years, but its annual M&O costs are not known. Determine the M&O costs for alternative S that would yield a required incremental rate of return of 26%. The M&O cost for alternative S is $
- Assume that a company is considering purchasing a machine for $50,500 that will have a five-year useful life and no salvage value. The machine will lower operating costs by $17,000 per year. The company's required rate of return is 18%. The profitability index for this investment is closest to: Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. Multiple Choice C O 0.95. 1.01. 1.05. 1.11.The data below are estimated for the project for the project study of a certain businessinvestment. IF money is worth 15% which of the project is more desirable, using PresentWorth Method and determine the difference in profit from each project study.For A, the initial investment is P5,000, with annual revenue of P2000. Annualdisbursement amounts to P650 with no salvage value at the end of its life which is 4years.For B, the initial investment is P8,000, with annual revenue of P3000. Annualdisbursement is P1500 with no salvage value at the end of its life which is 8 years.Assume that a company is considering purchasing a machine for $50,500 that will have a five-year useful life and no salvage value. The machine will lower operating costs by $17,000 per year. The company's required rate of return is 18%. The profitability index for this investment is closest to: Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. Multiple Choice O 0.95. 1.01. 1.05. 1.11.
- REQUIRED Study the information given below and calculate the following: Payback period (in years, months and days) Net Present Value Internal Rate of Return (expressed to two decimal places). (Note: Your answer must include the interpolation.) information Eva Limited is considering the purchase of a machine. The company desires a minimum required rate of return of 12%. The machine will cost R2 200 000 plus installation costs of R200 000 and is expected to have a useful life of six years. It is anticipated that the machine will have a salvage value of R100 000. The machine is expected to increase revenues by R800 000 per year but will require the employment of two new machine operators at R100 000 per year for each operator, and it will also require maintenance and repairs averaging R50 000 per year. Depreciation is estimated to be R400 000 per year.XYZ Company is looking to invest in some new machinery to replace its current malfunctioning one. The new machine, which costs P420,000, would increase annual revenue by P200,000 and annual cash expenses by P50,000. The machine is estimated to have a useful life of 12 years and P30,000 salvage value. Solve for the: A. Payback period in years B. Payback period reciprocal C. Accounting rate of return on initial investment D. Accounting rate of return on average investment.XYZ Company is looking to invest in some new machinery to replace its current malfunctioning one. The new machine, which costs P420,000, would increase annual revenue by P200,000 and annual cash expenses by P50,000. The machine is estimated to have a useful life of 12 years and P30,000 salvage value. A. Payback period in years B. Payback period reciprocal C. Accounting rate of return on average investment.
- Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated revenue producing life of 4 years. Falkland has a cost of capital of 8%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated revenue producing lite of 4 years. Mason has a required rate of return that is 12% and a cost of capital of 11%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?Caduceus Company is considering the purchase of a new piece of factory equipment that will cost $565,000 and will generate $135,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return In Excel, see Appendix C.