Use Excel® to solve the following problem. An eight-year life project has an initial capital expenditure of $450,000, annual income of $300,000 beginning at the end of year 1, and annual operating costs of $80,000 beginning at the end of year 1. Calculate the IRR for the following cases:
Q: A new municipal refuse-collection truck can be purchased for $84,000. Its expected useful life is…
A: (Q) A new municipal refuse-collection truck can be purchased for $84,000. Its expected useful life…
Q: will lose $1,200 each year for the first four years. An additional $8,000 is invested in the company…
A: here we calculate the NPV value of the project which are as follow-
Q: A man invests in a project that requires a fixed capital of P 2.5M with no salvage, and life of 12…
A: Payout can be defined as the financial returns that are anticipated from a particular investment or…
Q: Gethsemane Products Inc. is the leading manufacturer of cooking oil in the market. To cater to the…
A: Repeatability Assumption is made while comparing alternatives with different useful lives . What we…
Q: Consider the two investments with the following sequences of cash flows. At Marr of 15%. What is the…
A: Financial analysts use the internal rate of return (IRR) to determine the profitability of potential…
Q: Sonar warning devices are being purchased by the St. James department store chain to help trucks…
A: Current $ MARR = 18% Inflation is expected = 6%
Q: An untreated electric wooden pole that will last 10 years under certain soil condition cost ₱20,000.…
A: When a person invests some money in an asset, the returns are such that the interests over the years…
Q: You invest in a piece of equipment costing $40,000. The equipment will be used for two years, and it…
A: STEP1 Capital cost is found out by: Capital Cost=price-salvage valuei(1+i)n(1+i)n-1+salvage value…
Q: Calculate the capitalized cost of a project th- has an initial cost of P3,000,000 and an addition…
A: Given informations: Initial cost = P3,000,000 Additional cost at every 10 years = 1,000,000…
Q: The Board of Directors at Senico Systems is considering investment in five independent projects, all…
A: (a) The projects that have the internal rate of return greater than MARR should be selected. Based…
Q: Engineering economy - ENGR 3322 A new municipal refuse-collection truck can be purchased for…
A: Cost of Truck = 84,000 life = 6 MV = 0 Receipt less Expenses per year = 18,000 MARR = 19%
Q: n initial investment of P530,000 is estimated to bring in yearly cash inflow of P52,000 for 6 years.…
A: The initial investment for the project is = $530,000 Expected cash inflow for the next 6 years =…
Q: A piece of new equipment has been proposed by engineers to increase theproductivity of a certain…
A: The present worth of any project is the present value which is discounted by using a given rate of…
Q: “IRR technique cannot be used by UEM Engineering to assess potential investment projects” Discuss…
A: Internal rate of return is the financial analytical tool that is used to estimate the inflow or…
Q: Calculate the capitalized cost of a project that has an initial cost of Php 3,000,000 and an…
A:
Q: For the following cash flows, the project may have up to: Select one: a. two ROR b. three ROR c.…
A: A cash flow statement is the financial statement of the company that shows us what amount of cash is…
Q: The IRR percentage is the discount rate at which the NPV of a project cashflow becomes what? (Type…
A: The time value of money refers to the financial principle that shows the value of a dollar's present…
Q: A piece of equipment has an initial cost of $150,000. The market value at the end of each of the…
A: Equivalent Annual Cost (EAC) is defined as the cost of operating, owning and maintaining an asset…
Q: A proposed project will require the immediate investment of $50,000 and is estimated to have…
A: Using Excel for explanation
Q: Calculate the capitalized cost of an equipment maintained at a rate of 6% every year for P10,000,…
A: The present value of an item's annual sales over an indefinite period is its capitalization cost.
Q: . A project requires an initial investment of BD 75,000, has a salvage value of BD 15,000 after 4…
A: The concept that depicts a decline in value of an asset due to obsolescence, wear and tear or usage…
Q: What is the capitalized worth of a project that has an indefinitely long study period and dollar…
A: According to the Cash Flow Diagram, these cash flows repeat after every 5 years, for an indefinite…
Q: . At 6%, find the capitalized cost of a gas turbine whose first cost is Php200,000,000 and life is…
A: GIVEN DATA At 6%, find the capitalized cost of a gas turbine whose first cost is Php200,000,000…
Q: A machine that costs $12,000 is expected to operate for 10 years. The estimated salvage value at the…
A: Answer a) The following calculation is done to calculate IRR
Q: An oil company plans to purchase a piece of vacant land at the corner of two busy streets for…
A: Incremental analysis could be a business decision-making technique for determinant the real value…
Q: Consider the following two mutually exclusive service projects with projectlives of three years and…
A: Present value is the sum of money to be earned in the potential that is equal in worth to a…
Q: Use Excel® to solve the following problem. An eight-year life project has an initial capital…
A: Given, An eight year life project Initial Capital expenditure= $450,000 Annual Income=$300,000 at…
Q: Currently, the beta for NW offices is 1.8 and IPD index for NW offices is 10%. Given the redemption…
A: Question 10 Currently, the beta for NW offices is 1.8 and IPD index for NW offices is 10%. The…
Q: w municipal refuse-collection truck can be purchased for $84,000. Its expected useful life is six…
A: Initial Cost 84000 Net Recipt 18000 n 6 MARR 0.19
Q: A man planned of building a house. The cost of construction is P500,000 while annual maintenance…
A: A capitalized cost can be defined as the cost incurred on the purchase of a fixed asset. Such costs…
Q: You are considering the following project: It pays you $2,500 at the end of the first year, costs…
A: Introduction: The hurdle rate, conjointly referred to as the minimum acceptable rate of come, is…
Q: Determine the capitalized cost of a research laboratory which requires Php 4,500,000 for original…
A: First Cost = 4500,000 Cost per year till year 6 = 110,000 Cost per year from 7 year onwards =…
Q: dropped. True False 22 The required rate of return is the maximum rate of return that an investment…
A: 21 - TRUE Since Fixed costs must be paid irrespective of the Price, quantity Or profitability of…
Q: Capital recovery (CR) is the equivalent annual amount that an asset, process, or system must earn…
A: Salvage value is the value that is calculated after depreciation.Capital recovery involves covering…
Q: Capitalized cost: Select one: a. is the future sum needed to provide a perpetual series of cash…
A: capitalized cost is a special kind of present worth analysis that chooses between alternatives with…
Q: What is the capitalized cost of a structure that requires an initial investment of P1,500,000.00 and…
A: The application of economic ideas to the evaluation of engineering design and the selection of…
Q: The city of Oak Ridge is considering the construction of a four kilometer (km) greenway walking…
A: Initial cost =4 km × $1000 = $4000Maintenance cost = 4×300=$1200Number of years, n= 20 yearsInterest…
Q: What is the capitalized cost of a public works project that cost $25 million now and will require $2…
A: Cost of project = $25 million Annual maintenance = $2 million Interest rate = 12%
Q: CASH FLOW DIAGRAM Calculate the capitalized cost of a project that has an initial cost of P8,000,000…
A: Solution given below,
Q: The capital recovery cost is the equivalent uniform annual cost (EUAC) of the net capital…
A: Engineering economy refers to a subset of Economics concerned with the use and application of…
Q: A city water and waste-water department has a four-year-old sludge pump that was initially purchased…
A: Given that; Initial amount of pump = $65,000 Selling price = $36,500 Purchase price of replacement…
Q: A small company purchased now for $23,000 will lose $1,200 each year for the first four years. An…
A: Cashflow represent the total inflow and outflow of the cash in the firm , so here we calculate the…
Q: Problem 4: How long would it take to recover an investment of $250,000 in enhanced CNC controls that…
A: Present value depicts the current value of the future series of payments received from an annuity…
Q: A proposed project will require the immediate investment of $50,000 and is estimated to have…
A: We are given the initial investment = $50,000 and i = 15% and 20% Working Note: Cash flow =…
Q: Two traffic signal systems are being considered for an intersection. One system costs $33,000 for…
A: Minimum acceptable rate of return, or, MARR can be defined as the minimum amount of profit that is…
Q: 6. Myrvin made a 12-percentage-point investment of PHP10,000.00. According to the 72-year rule, it…
A: The rule of 72 means says that any sum of money will take (72/Interest Rate) years to double.
Q: Problem 6 A sensitivity analysis is performed for a facility with a MARR of 6%. The facility has an…
A: Given information First cost=$550000 Annual loan payment=$45000 Annual O&M cost=$95000 It…
Q: Covington Corporation purchased a vibratory finishing machine for $20,000 in year 0. The useful life…
A: The measure that depicts the current income stream of cash flows discounted at a specified rate of…
Q: A group of concerned citizens has established a trust fund that pays 7.5% interest, compounded…
A: The answer to the question is given below :
Please all solve the question
Step by step
Solved in 4 steps with 18 images
- Q1) The following figures indicate to cash flows for project (X, Y, Z) respectively. project Z: Project X :r=11% cash flow (CF) project Y: r=11% cash flow (CF) r=11% year cash flow (CF) -999 -342 -10202 1 290 105 1300 310 105 1390 3 315 115 1690 4 810 119 2460 5 820 290 2600 825 390 2890 7 905 420 2989 6.Retainer 0 1 Expenses 2 Revenue N Years How much can you afford to spend on the first year expenses on a project with the above cash flow?, given; Your MARR is 10.00%, the client has given you a retainer of $5,700, annual revenues are expected to be $2,750, the external rate of return required for this project is 19.5% and the entire project will last 8 years. (Round your answer to the nearest penny)Quèstion 12 A company has an export transaction with the payment term D/P T/R at 15 days after sight. Assuming the documents mailing period is 7 days, and the date of collection is July 1st (without considering the reasonable working hours of the bank). The date of payment is O July 1st July 8th O July 15th O July 22nd
- SHOW COMPLETE SOLUTIONS. SHOW CASHFLOW DIAGAM. DO NOT USE EXCEL. UNIFORM ARITHMETIC GRADIENT A parcel of land in a downtown area, suitable for parking lot, can be leased for a period of 10 years. Initial development costs for clearing, paving and constructing a small office shed on the lot is estimated to be P150,000. If the net annual revenue for the first year is P22,000 and increases by 10% per year thereafter until the tenth year, and the improvements revert to the owner of the land at the end of 10 years, what is the rate of return on the investment?If ɛ = 11% per year, what is the ERR for the cash flows of this project? Let MARR = 11% per year. EOY 1 3 4 5 6 7 8 10 Cash Flow ($) 110 80 50 20 - 1,820 600 480 370 330 190 120 ..... The ERR for the cash flows of this project is %. (Round to two decimal places.)FIND(X) FOR THE SHOWN CASH-FLOW DIAGRMS USE:i=9% 2000 0 1 24 34 44 54 64 PLUOR 7 X
- Question 3 A project with the following costs are under consideration to determine its profitability. Using the IRR comparison, and an annual MARR of 10% compounded semiannually, determine if the project should be executed First cost $45,000 Semiannual operating cost $10,000 Semiannual income $20,000 Salvage value $20,000 Life in years 4 years Oa. IRR = 17% semiannual Ob. IRR= 18.7% semiannual O IRR = 16.9% semiannual Od. IRR 15.3% semiannualLipsion 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 V) 0 (150,000) outlay (150,000) outlay 1 14,000 15,000 2 24,000 25,333 3 44,000 52,000 4 84,000 63,333 Calculate the payback period for both products in years and months, not as a decimal. Please present answer to nearest month.A bank is in the processing of rescheduling a $10 million loan paying 14% interest. If liquidated, it expects to receive $8.4 million. The rescheduling terms are as follows: Amount $10,000,000 in year 0 New maturity in years 5 Interest rate 8% Principal payments in millions $5,000,000 each in years 4 and 5 Upfront-fee 1.00% Cost of capital after rescheduling 14.00% Should the bank reschedule the loan? A Yes, reschedule the loan because the NPV is greater than liquidation value B No, do not reschedule the loan because the liquidation value is lower than the NPV C Reschedule the loan only if the cost of capital after rescheduling is 12% D Reschedule the loan only if the cost of capital after rescheduling is 15%
- Problem 13 The Keiser Mining Company must deposit money in an account TODAY (n=0) to cover the anticipated cleanup costs that will begin when the mine closes. These cleanup costs of $6000 will begin in year 5 and repeat every 2 years, as shown below. The account will pay 5% annual interest. $6 $6 $6 $in thousands of 5 - ST 10 11 = The amount Keiser Mining Company should deposit TODAY is closest to: a. $45,900 b. $48,200 c. $50,600 d. $58,5001. Your rich uncle has offered you two living trust payouts for the rest of your life. The positive cash flows of each trust are shown below. If your personal MARR is 10% per year, which trust should you select? ΕΟΥ Trust A Trust B 1-10 11-infinity P50,000 75,000 60,000 65,000 Note: At 10% per year interest, infinity occurs when N = 80 yearsThe following table presents sales forecasts for Golden Gelt Giftware. The unit price is $30. The unit cost of the giftware is $28. Year 1 2 3 NPV $ 4 Thereafter Unit Sales 21,300 27,900 14,000 4,500 0 It is expected that net working capital will amount to 30% of sales in the following year. For example, the store will need an initial (year O) investment in working capital of 0.3 x 21,300 × $30 = $191,700. Plant and equipment necessary to establish the giftware business will require an additional investment of $189,000. This investment will be depreciated in an asset class with a CCA rate of 25%. We will assume that the firm has other assets in this asset class. After 4 years, the equipment will have an economic and book value of zero. The firm's tax rate is 35%. The discount rate is 18%. What is the net present value of the project? (Round your answer to the nearest whole dollar amount.)