Calculate the NPV of an asset replacement given the following information: Investment = $180,000; salvage recovered now = $70,000; operating cash flows = $180,000; PV of salvage forgone = $5,500; PV of salvage recovered = $14,000; CCATS = $35,000. Multiple Choice $119,500 $121,500 $115,500 $113,500 $117,500

Calculate the NPV of an asset replacement given the following information: Investment = $180,000; salvage recovered now = $70,000; operating cash flows = $180,000; PV of salvage forgone = $5,500; PV of salvage recovered = $14,000; CCATS = $35,000. Multiple Choice $119,500 $121,500 $115,500 $113,500 $117,500

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

Given the following project alternatives, determine the most economical investment given an MARR of 10% using IRR method. Project A B C D 6.12% -2.8067% -3.394% 2699% Investment 13.69% $ 100,000 $ Annual Profit Useful Life Salvage Value $ 140,500 $ 148,200 $ 27,500 38,600 38,500 $ 98,000 $ 22,100 What is the incremental IRR of the second comparison? 5 5 5 5 $ 10,000 $ $ 14,000 25,600 14,000
The cost data for two projects are given below. (a) Draw the cashflow diagram of Project 1. (b) Determine the better alternative using the annual cash flow analysis. Project 1 Project 2 $200,000 $180,000 24,000 Initial cost Net Annual Benefit 30,000 Salvage value Life in years 45,000 20,000 13 10 MARR 6%
Reference: Case Study S Dunn Manufacturing is considering the following two alternatives. The cost information for the two proposals for replacing an equipment are provided are in table below. Initial cost Benefits/year Machine X $120,000 $20,000 for the first 10 years and $9,000 for the next 10 years Life Salvage value $40,000 MARR 5.2. The NPW of machine X is A) $35,158 B) $48,192 C) $50,752 Machine Y $96,000 $12,000 per year for 20 years. 20 years 8% $20,000
Information for two alternative projects involving machinery investments follows: Project 1 Initial investment Salvage value Annual income $ (128,000) Ө Project 2 $ (98,000) 18,000 14,080 11,600 a. Compute accounting rate of return for each project. b. Based on accounting rate of return, which project is preferred? Complete this question by entering your answers in the tabs below. Required A Required B Compute accounting rate of return for each project. Project 1 Project 2 Numerator: Accounting Rate of Return Denominator: Required A Required B Based on accounting rate of return, which project is preferred? Based on accounting rate of return, is preferred. = Accounting rate of return
For the following alternatives compute the Delta B/C ratio of Alternative D minus Alternative A. Use 11% as MARR. (Remember for our convention, salvage value is a minus cost.) Project Initial Investment A -1500 -2000 -2500 -5200 Annual Benefit 350 500 600 850 Salvage Value Useful Life 320 610 820 2300 O1.27 1.18 O 1.46 O 1.73 O 0.92
The incremental cash flow present worth (PW) equation associated with two alternatives A and B is: 0 = -53,000+ 21,000(P/A, Ai*B-A,5) + 80000(P/F, Ai*B-A,5) Please provide the answers taking sign conventions into consideration. Determine the following: a) The first cost for B b) The M&O for A c) The salvage value of B Process Alternative A Alternative B First Cost, $ -30,000 ? M&O, $/Year ? -11,000 Salvage Value, $ 4,000 ? Life, Years 5 5
Quiz 2: Select the best alternative plan from the table below using the Annual worth analysis (AW). (Draw the cash flow diagram) Annual Salvage Life time i- (years) Other First Cost (Present) Operating cost (AOC) Plan value payments - $ 800,000 - $(mn*1000) $ 200,000 $ 26,400 8. 4% -$ 23,000 Every 7 -$ 2,800,000 Infinity 4% - $ 16,000 (forever) - $(mn*1000) years $2,000,000 -$(mn*1000) 31 4% $12,000 Select the best alternative plan from the table below using the Annual worth analysis (AW). (Draw the cash flow diagram)
For the following alternatives compute the Delta B/C ratio of Alternative D minus Alternative A. Use 11% as MARR. (Remember for our convention, salvage value is a minus cost.) Project A B D Initial Investment -1500 -2000 -2500 -5200 Annual Benefit 350 500 600 850 Salvage Value Useful Life 320 610 820 2300 5 6 7 9
The cash flows and Net salvage value of Project Y is given the following table: Year Cash flows Salvage Value 0 -5,800 5,800 1 2,100 3,000 2 1,400 2,200 3 1,600 1,900 4 1,800 300 Given the cost of capital is 10%, Calculate the NPV for its Economic Life and determine what are its economic life and physical life of Project Y?(Please show your work)
Compare three alternatives on the basis of their capitalized costs at i= 13% per year and select the best alternative. Alternative E $-445,000 $-24,000 First Cost $-65,000 $-945,000 $-10,000 AOC, per Year Salvage Value Life, Years $-50,000 $31,000 $81,000 $300,000 The capitalized cost of alternative E is $ alternative F is $ and alternative G is $ The best alternative is (Click to select) v
Give typing answer with explanation and conclusion A company is considering a project that would require purchasing an asset at a cost of $240,000. The project is expected to create cost savings if it is accepted. Assume the present value of salvage value is $12,000, present value of cost savings after-tax is $220,000, and PVCCATS is $60,000. What is the project's net present value?
Construct and upload a choice table for the alternatives shown below, as the previous problem. Each alternative has a 20 year useful life and no Salvage value. A В C Initial $55,000 $27,000 $20,000 Investment Annual $5,600 $2,700 $2,200 income 8% 7.75% 9.06%

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS