The cash flows for two small raw water treatment systems are shown. Determine which should be selected on the basis of an annual worth analysis at 10% per year interest. MF UF First cost, $ -33,000 -51,000 Annual cost, $ per year -8,000 -3,500 Salvage value, $ Life, years 4,000 11,000 3 6
Q: An equipment costing P250,000 has an estimated life of 15 years with a book value of P30,000 at the…
A: N = 15 years Cost = 250,000 Book Value at end = 30,000 SLM Depreciation Method
Q: company is evaluating a proposal for purchase of equipment which will cost $180,000. The cash…
A: Introduction Payback period: It is the method of capital investment evaluation. This method counts…
Q: Consider the following financial data for an investment project:• Required capital investment al n =…
A: The calculation is: Note: No depreciation in the 10th year will be there because the project will…
Q: Consider the following financial data for an investment project:• Required capital investment at n =…
A: According to the 7-year MACRS Depreciation Schedule Whole assets will be written off in the Year 8th…
Q: Consider the cash flow diagram below of two alternatives using an interest rate of 8% and select the…
A: EUAC is uniform equal annual cost that is equivalent to all cost that are going to occur during the…
Q: What is the capital recovery (CR) cost of the project? Assume Cash Flow First cost, S Annual cost, S…
A: In this we need to calculate the capital recovery cost of project.
Q: The amount of the estimated average income for a proposed investment of $60,000 in a fixed asset,…
A: As posted multiple independent questions we are answering only first question kindly repost the…
Q: Beyer Company's is considering the purchase of an asset for $205,000. It is expected to produce the…
A: The net present value method is used to evaluate investment projects. We can evaluate the project by…
Q: The manager of a canned food processing plant must decide between two different labeling machines.…
A: The definition of present worth asserts that a sum of cash today is valued more than a sum of cash…
Q: Company AMP wants to determine the net present value of one of its systems when cost of capital is…
A: The net present value of a project can be defined as the current value of positive and negative cash…
Q: Oriental Corporation has gathered the following data on a proposed investment project: Investment in…
A: The payback period is the time taken to pay back the investment. In simple words, it is the time…
Q: An equipment costing P120,000 is expected with an estimated economic life of 6 years, salvage…
A: The question is related to Capital Budgeting. The Net Present Value will be calculated with the help…
Q: The following information relates to two capital investment projects - Project A and Project B:…
A: Project A: Annual cash flow = Annual profit + depreciation. depreciation = cost - residual value /…
Q: Polypropylene wall caps, used for covering exterior vents for kitchen cooktops, can be made by two…
A: Annual worth(AW) can be calculated by using this equation AW =-Frist cost*Capital recovery(A/P) +…
Q: The net present value would be? ₱ 188,806 ₱ 324,989 ₱ 212,550 ₱ 299,250 ₱ 126,700 ₱ 258,684
A: Net Present Value: It is a metric used in capital budgeting to value the project's worth. Net…
Q: Company A is contemplating on purchasing an equipment for $100,000. Its expected useful life is 8…
A: MARR = 15% Year Cash Flow Present Value of Cash Flow = Cash Flow / (1+MARR)^Year 0 -100,000…
Q: Shown in the table are the cash flows for 4 water treatment systems that are to be compared at a…
A: The capital budgeting decision includes the selection of the best alternative among various…
Q: at is the initial investment, annual cash flows, and npv for Lease of $25 Million in Equipment…
A: Net present value is the difference between the present value of cash flow and initial investment.
Q: The following information relates to two capital investment projects - Project A and Project B:…
A: Internal Rate of Return (IRR) of Project B = 15.33% Refer step 2 for explanation
Q: For the cash flows shown, determine the incremental cash flow between machines B and A (a) in year…
A: Make or buy decision involves financial analysis of production option in comparison with the…
Q: Joetz Corporation has gathered the following data on a proposed investment project (Ignore income…
A: Depreciation represents the reduction in the value of an asset over the useful life. It is an…
Q: For the cash flows shown and in preparation for a PW-based rate of return analysis, determine the…
A: Meaning of Incremental Cash flow Incremental cash flow is the extra operating cash flow that a…
Q: The following data are given for Encino Aluminium Company: Initial cost of proposed equipment…
A: It is clear that payback period is between 4th and 5th year.
Q: Net cash flow and timeline depiction For each of the following projects, determine the net cash…
A: Timeline can be used to represent the series of cash flows that incur in a project. Timeline…
Q: For the cash flows shown, use an annual worth comparison and an interest rate of 8% per year and…
A: Annual worth is the equivalent & uniform annual value of all the cash flows of an investment.
Q: An investment of $450,000 is made in equipment that qualifies as 5-year equipment for MACRS-GDS…
A: Planning horizon is the time period for which investor will invest the amount in an investment. With…
Q: The following data pertain to an investment currently being considered by Kalamazoo Corporation:…
A: Net present value of the project = Present value of Net annual cash inflows + Present value of…
Q: Please determine the present value of the project for a given cash flow indicated below using the…
A: Present value of the project is the present worth of future cashflows
Q: The following information relates to two capital investment projects - Project A and Project B:…
A: Net present value is a technique used for making capital budgeting decisions. The company should…
Q: Using the tables in Exhibits 26-3 and 26-4, determine the present value of the following cash flows,…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Joetz Corporation has gathered the following data on a proposed investment project (Ignore income…
A: The Net present value of the project would be providing the absolute figure of how much profit we…
Q: A company that manufactures magnetic membrane switches is investigating two production options that…
A: The future worth analysis is a kind of quantitative analysis that helps in evaluating the capital…
Q: equipment has a useful life of five years and a residual value of $75,000. Depreciati using the…
A: Accounting rate of return can be computed using the following formula : ARR=Average net…
Q: 3. A manufacturer purchased S$200,000 worth of equipment with a useful life of 5 years and $20,000…
A: Data given:: Cost of equipment = $200,000 Useful life= 5 years Salvage value = $20,000 Rate = 6%…
Q: Draw a 5-year cash flow diagram representing the following cash flows to build springs: (Chapter 2)…
A: Initial investment in plant and equipment $50K Answer:
Q: An equipment costing ₱600,000, with a residual value of ₱30,000 at its useful life of five years, is…
A: Year Cash flow 0 -600000 1 350000 2 250000 3 150000 4 100000 5 80000 Discount rate…
Q: For the cash flows shown, determine the incremental cash flow between machines B and A for (a) year…
A: Life of A is 3 years and life of B is 4 years. Hence, in year 3, A will be replaced with the first…
Q: ILLUSTRATE THE CASHFLOW DIAGRAM FOR PLAN R AND PLAN S A utility company is considering the…
A: Capital budgeting is a method to select either the most profitable or the least cost alternatives…
Q: An investment of $600,000 is made in equipment that qualifies as 3-year equipment for MACRS-GDS…
A: To calculate the Net Present Value, the rate to be used will be the nominal rate, which will be…
Q: DRAW CASH FLOW DIAGRAM A manufacturing plant installed a new boiler at a cost of P150, 000 and…
A: The net amount of cash and cash equivalents being transferred in and out of a company is referred to…
Q: A company is investigating two production options of the manufactured switches that have the…
A: For Present worth analysis, net present value is calculated. NPV is present value of inflows less…
Q: Rocco Manufacturing is considering following two investment proposals: Proposal X Proposal Y…
A: Time value of money: Time value of money refers to the concept that the value of money available at…
Q: A four-year project has an initial cost of $20 000, net annual cash inflows of $10 000, and a…
A: IRR (internal rate of return) It is a capital budgeting tool to decide whether the capital budget…
Q: The following data are given for Encino Aluminium Company: Initial cost of proposed equipment…
A: Present Value of Estimated Cash inflow Present value Factor @12% seen from present value Table
Q: The following information relates to two capital investment projects - Project A and Project B:…
A: The accounting rate of return is a profitability ratio that evaluates a project's expected…
Q: The cash flows for two alternatives are shown. The correct equation for computing the AW of…
A: Annual worth(AW) shows the net difference between all benefits and costs which occurs in 1 year at…
Q: Compare the projects below using future worth analysis at i=16% per year. Apply LCM method, Write…
A: In the LCM method i.e. Least common multiple method,we multiply the lower life project cash flows up…
Q: The following information Company: available for a potential investment for Rose Initial…
A: NPV = P36224 Initial investment = P80000
The cash flows for two small raw water treatment systems are shown. Determine which
should be selected on the basis of an annual worth analysis at 10% per year interest.
*please answer in a neat and clear way.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Consolidated Aluminum is considering the purchase of a new machine that will cost $308,000 and provide the following cash flows over the next five years: $88,000, 92,000, $91,000, $72,000, and $71,000. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return in Excel, see Appendix C.Assignment equipment, the useful life of which is four years. The net cash flows for the two projects are provided in the table below: Net Cash Flow (GH¢) Project Year 1 Year 2 Year 3 Year 4 1 2,550 2,450 1,700 1,400 1,240 1,550 2,100 3,800 end of its life. i. Find the payback period for each project. Establish the net present value for each project using discount rate of 20%. Establish the net present value for each project using discount rate of 25%. Determine the internal rate of return for each project. iii. iv. Using the payback criterion and the internal rate of return criterion advice the proprietor on the project he should undertake, giving reasons for your choice of project. V. 70The cash flow estimates of a project are shown in the table below, and the MARR is 6% per year. Of the following three relations, the correct one to calculate the annual worth of this project is: Cash Flow First cost, S Annual cost, S per year Revenue, S per year Salvage value, S Life, years -200 -50 120 25 10 Relation 1: AW=-200(A/P,6%,10)+70+25(A/F,6%,10) Relation 2: AW=[-200-50(P/A,6%,10)+120(P/A,6%,10)+25(P/F,6%,10)|(A/P,6%,10) Relation 3: AW=-200(F/P,6%,10)+25+(-50+120)(A/P,6%,10) O Relation 1 and 3 OARelation 1 and 2 O Only Relation 1 O Only Relation 3
- A project has the following cash flows. Determine the exact ROR for this project. Item Cash Flow First cost, $ 250,000 Annual Revenues, $/year 16,000 Additional Revenue, year 20, $ 600,000 O&M costs, $/year 2,500 Life, years 20A project requires an initial investment of $500,000. The following cash flows have beenestimated for the life of the project:Year Cash flow ($)1 120,0002 150,0003 180,0004 160,000 a. The company uses NPV to appraise projects. Using a discount rate of 7%, calculate the NPVof the project and recommend whether the project should be undertaken.For the cash flows shown, use an annual worth comparison and an interest rate of 8% per year and detemine which service alternative should be selected. B Initial cost, $ 300000 680000 Annual cost, S/year S0000 30000 Annual cost started at year 4, S/year 15000 Extra cost every 6 years, $ 40000 Salvage value, $ 50000 150000 Life, Years 8. AW of alternative A is: AW of alternative B is: Which alternative will be selected?
- A potential project involves an initial investment in machinery of RO.1,000,000 and has the following cash inflows:Year 1 – RO.250,000Year 2 – RO.350,000Year 3 – RO.200,000Year 4 – RO.400,000At the end of year 4, the machinery will be sold for RO.600,000.Calculate the accounting rate of return based on average investment.NOTE (DEDUCT THE DEPRECIATION TO ARRIVE AT THE CORRECT AVERAGE PROFIT) a. None of the options b. 35% c. 20% d. 25% Clear my choicePlease determine the present value of the total cost of the project for a given cash flow indicated below using the present value method and find the correct answer given below. Economic life :4 years Initial investment :150,000 TL Annual saving for each year :20,000 Salvage value :Zero Discount ratio :10% Maintenance cost :30,000: According to the data given in the table below and to the annual equivalent expenditure method, which project should be preferred? Cash flows Project A Project B Project C Investment Amount (TL) 1500000 3475000 5900000 Operating expense (TL / year) Salvage Value (TL) Economic life of the project (years) Discount rate (%) 750000 500000 300000 250000 150000 100000 20 18 15 20 18 15
- 4/4 The cash flows for two small raw water treatment systems are shown. calculate the net present value for each project and determine which should be selected on the basis of the Net Present Value at 10% per year interest. Annual Operating costs ($) Number of years Major Maintenance (S) Initial costs (S) Project 1 8500 4 2000 36,000 Project 2 3000 4 2000 54,000 Project 1 = 63,011.82, Project 2 = 66,747.42, Project 1 should be chosen Project 1 = 64,596.75, Project 2= 65,162.49, Project 2 should be chosen Project 1 = 64,596.75, Project 2= 65,162.49, Project 1 should be chosen Project 1 = 63,011.82, Project 2= 66,747.42, Project 2 should be chosen None of the aboveCompany Express S. A. asks you to construct cash flows for following three (3) investment projects, containing following information:PROJECT 1a. Sales (in ThCh$):- Year 1: 90,000- Year 2: 55,000- Year 3: 75,000- Year 4: 190,000b. Cost of sales is estimated at 53% of sales.c. Depreciation for year is ThCh$ 15,000 per period (period 1 to 3). In year 4 there is a sale of machinery that results in a gain on sale of non-current assets of ThCh$ 9,800. Total depreciation for year 4 is ThCh$ 12,500.d. Administrative expenses are equivalent to 17% of sales.e. In period 0 there is an investment of ThCh$ 58,000.f. There is credit financing of ThCh$ 32,000 which is amortized in equal parts of ThCh$ 8,000 per period with a financial expense of ThCh$ 3,700 per period.g. There is an investment in working capital of ThCh$ 24,000 in period 0, which is recovered in period 4.h. In period 4 there is an investment in land of ThCh$ 40,000.i. Income tax rate is 17%. Calculate: cash flow per period. Please…A company is investigating two production options of the manufactured switches that have the estimated cash flows shown. Which orne should be selected on the basis of a present worth analysis at 10% per year? In-house Contract First cost, P Annual cost, P per year Annual income, P per year 3,000,000 400,000 1,400,000 200,000 0: 200,000 3,100,000 Salvage value, P Life, years 5