2.Initial Cost, $Tabulate the incremental cash flow for the alternatives shown below.Machine B-25,000Machine A-15,000Annual operating cost, $/year-1,600-400Salvage value, $3,0006,000Life, years36

The incremental cash flow table displays the additional expenses associated with selecting Machine B…

Answered: 2. Initial Cost, $ Tabulate the…

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

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1. For the following cash flow compute: Investment Annual operating Cost Annual Revenues Operating cost will increase by Arithmetic Gradient of G-$500 annually from the second year thru the 6th year Salvage Value at the end of 6 year Investment life n-6 years MARR= 10% $65,000 42,000 60,000 3,000 Hint for IRR use 20% Draw the cash-flow Diagram and compute PW,AW,FW b. IRR a. C. ERR
1. For the following cash flow compute: Investment $65,000 42,000 60,000 Annual operating Cost Annual Revenues Operating cost will increase by Arithmetic Gradient of G=$500 annually from the second year thru the 6 year Salvage Value at the end of 6 year Investment life n=6 years MARR= 10% 3,000 Hint for IRR use 20% a. Draw the cash-flow Diagram and compute PVW AW.FW b. IRR C. ERR
For a project with the following set of cash flows, what is the payback period? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Year Cash Flow 1 07234 -$5,800 1,450 1,650 2,050 1,550 Payback period years < Prev 6 of 24 Nex CUCUECAA MacBook Air
Living Colour Company has a project available with the following cash flows: Year Cash Flow 0 - $ 33, 630 1 8, 240 2 9,930 3 14, 190 4 15, 970 5 10,880 If the required return for the project is 8.8 percent, what is the project's NPV? Multiple Choice $11, 883.44 $25,580.00 $ 4,746.96 $12, 873.73 $13, 581.08
For the cash flows given below, find the ERR and evaluate the project when the external reinvestment rate is ε = 10% and MARR = 8%. EOY 0 1 2 234 5 Cash Flow -$10,000 -$2,000 $2,500 $4,000 $4,000 $4,000
The following are the cash flows of two projects: Project B -$340 Year Project A -$4340 1 170 240 170 240 3 170 240 4. 170 a. If the opportunity cost of capital is 10%, calculate NPV for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Project NPV %24
Compute the internal rate of return for the cash flows of the following two projects: (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Year Project A Project B 0 –$ 9,800 –$ 7,400 1 3,800 2,100 2 4,600 5,300 3 3,400 3,000 Internal rate of return Project A % Project B %
Compute the internal rate of return for the cash flows of the following two projects. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Year Project A 0 -$13,800 Project B -$ 11,400 1 5,400 2,900 2 6,200 8,500 3 5,000 4,600 Project A Project B % %
for the following cash flow, if i; = ib = 12% and MARR= 15%, 1. Determine i* by using MIRR? (final answer) 2. Is the project acceptable? 614,600 386,000 92,800 5 = N End of Year(EOY) 42,500 202,200 450,000
Consider the cash flow diagram below of two alternatives using an interest rate of 8% and select the better one using the EUAC method. Alternative A Alternative B Initial Cost, $ -15,000 -20,000 Annual M&O, $/year -6,000 -9,000 Refurbishment cost, $ 0 2,000 Salvage Value, % of P 20 40 Estimated Life, years 4 12
Calculate the Equivalent X(4) for a project with the following cash flows: First Cost (F.C) = JD 13000, Annual Income for the last 6 years= JD 2400 Operating Cost (O.C.) = JD 30 Income, at the end of the 4th year = JD 5000, Salvage Value (S.V.) = 1800. If n= 9 years and i=7% per year. ( show the CFD and calculations)
The cash flows for two alternatives are shown. The correct equation for computing the AW of Alternative B at 10% per year interest is: A B First Cost, $ |-25,000 |-17000 Annual cost, $ per year -3000 |-3200 Salvage Value, $ |1100 2100 Life, years 3 5 O AW(B)=-17,000(A/P, 10%, 5) -3200 (A/P, 10%, 5)+2100(A/F, 10%, 5) AW(B)=-17,000 (A/P, 10%, 5)-3200-2100(A/F, 10%, 5) AW(B)=-17,000 (A/P, 10%, 15)-3200+2100(A/F, 10%, 15) O AW(B)=-17,000 (A/P, 10%, 5)-3200+2100(A/F, 10%, 5)

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2. Initial Cost, $ Tabulate the incremental cash flow for the alternatives shown below. Machine B -25,000 Machine A -15,000 Annual operating cost, $/year -1,600 -400 Salvage value, $ 3,000 6,000 Life, years 3 6