A proposal to reduce traffic congestion on Jounieh Highway has a B/C ratio of 1.4. The annual worth of benefits minus disbenefits is $560,000. What is the first cost of the project if the interest rate is 5% per year and the project is expected to be perpetual? * 4,000,000 4,588,208 8,000,000
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- A project is being planned that has an initial investment at time 0, annual revenuesand expenses, and a salvage value at the end of the project lifespan (20 years). The financialvalues are summarized below:Initial investment amount at time 0 $150,000Estimated annual revenue $34,500 per yearEstimated annual expenses $8,700 per yearEstimated salvage value at end of lifespan $10,000Minimum attractive rate of return (MARR) 15%a. Calculate the capital recovery amount CR(i%).b. Using the annual worth (AW) method, determine whether purchasing the equipmentis economically justified.c. Repeat part (a) using the internal rate of return (IRR) method based on annual worth(AW).d. Using the present worth (PW) method, determine the break-even time period afterwhich purchase of the equipment generates a profit. (Find N when PW = 0) year period.The cash flows for three mutually exclusive alternatives are given in table below. MARR = 4%. ALB Alt. C 27,000 24,000 7,600 6,500 13% 11% Initial cost Annual benefits ROR Life in years Alt. A $15,000 $4,500 15% 5 Reference: Case Study 8 The best alternative for a MARR of 2.0% using the incremental rate of return analysis is A. Alt. C B. Alt. B C. Alt. A OD.Do-nothingHadeel borrows money in the senior year to buy a new car. The car dealership allows to defer payments for 12 months, and Hadeel makes 36 end of month payments thereafter. If the original loan is $24,000 and interest rate is 0.5% per month on the unpaid balance, how much will Hadeel payments be? $698.80 $774.62 $620.65 $700.56 detailed answer without usage of excel
- Sarah wants to purchase a new car five years from now. She expects that at the time of purchase the price for a passenger vehicle will be $55,530. If the bank interest rate is 5% per annum, how much will she be required to put into her account NOW to ensure she has enough cash to purchase the vehicle? a $90,453 b $34,090 c $43,509 d $70,873An engineering student intends to purchase a new computer. He plans to pay $300 down and finance the remainder over a 12 month period. The maximum amount that he can repay each month is $100. a. What is the most expensive computer he can purchase, assuming an interest rate of 2% per month (compounded monthly)? b. Draw the Cash Flow Diagram for this problem.its life. K A city is spending $19 million on a new sewage system. The expected life of the system is 50 years, and it will have no market value at the end of Operating and maintenance expenses for the system are projected to average $0.8 million per year. If the city's MARR is 8% per year, what is the capitalized worth of the system? The study period is 100 years. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year.
- YOUR FATHER PLANS TO INVEST P500,000.00 IN AN AUTO WASHING MACHINE WITH THE FF DATA: (20 PTS.) WASHING CAPACITY- 12 CARS/HR AT 8HRS OPERATION/DAY FOR 6DAYS A WEEK AND 50 WEEKS/YEAR CAR WASH CHARGE-P25/CAR MANUAL LABOR COST ( 2 WORKERS)-P25/HR PER WORKER PLUS A PAID VACATION BENEFITS OF 2 WEEKS PER YEAR MAINTENANCE COST-P8500.00/MONTH DESIRED RATE OF RETURN ON THE CAPITAL-20% PRESENTLY YOUR FATHER IS EARNING P25,000.00/MONTH AS A REGULAR EMPLOYEE AND WANTS TO CONCENTRATE ON THIS BUSINESS AND WANT TO RECOVER HIS INVESTMENT IN 5 YEARS. USING ROR AND AW METHOD OF ECONOMY STUDIES, SHOULD YOUR FATHER PROCEED WITH THE INVESTMENT?Need AsapIllustrate the cashflow diagram and compute for the payback period for a project with the following characteristics, if the minimum attractive rate of return (MARR) is 10%? First Cost $20,000 Annual Benefits $8,000 Annual Maintenance $2,000 in year, then increasing by $500 per year Salvage Value $2,000 Useful Life10 yearsThe annual income from an apartment complex is $23,155. The annual expense is estimated to be $2,588. The apartment complex could be sold for $110,110 at the end of 10 years. If your MARR is 10%, how much should you pay for the apartment complex if you were to buy it now?
- Would love some help on how to approach this - thanks! The cash flows for three different alternatives are given in table below. MARR =10%. Alt. A Alt. B Alt. C Initial cost $5,000 9,000 7,500 Annual benefits $1,457 2,518 2,133 RoR 14% 13% 12.4% Life in years 5 1. ΔRoR for the first increment (Alt. C-Alt. A) is ___________________. A.10.12% B. 9.38% C. 11.85% D. 11.00% 2. ΔRoR for the second increment is ___________________. A. 10.12% B. 9.38% C. 8.94% D. 9.87% 3. The best alternative for a MARR of 10% using the incremental rate of return analysis is ____________. A. Alt. C B. Alt. A C. Alt. B D. Do nothingRetainer 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)A battery manufacturing plant has been ordered to cease discharging acidic waste liquids containing mercury into the city sewer system. As a result, the firm must now adjust the pH and remove the mercury from its waste liquids. Quotations from three firms are included in the following table of costs. If the installation will last 15 years and money is worth 12%, which equipment should be purchased? Bidder Installed Annual Cost Foxhill $70k Quicksilver $50k Almaden Operating Cost 5k 5k $90k 5k Annual Income from Mercury Recovery 6.5k 2.5k 7.8k Salvage Value 10k 0 10k