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- Net present value (NPV) of the project =Single payoff x PVIAF (10.20%, 9 years) - initial outlay = $6,947 x 0.42340 - $2,182 = $759.39 What's the equation for the bolded item?Projects A and B are mutually exclusive. The minimum attractive rate of return (MARR) is 12%. Using rate of return analysis, which project should be selected? If the image fails to load here, go to https://www.dropbox.com/s/ld6wctqieu8jgwp/ROR.jpg >> Year 0 A B - $750 - $1,150 B-A - $400 123 $200 $300 $100 $200 $350 $150 $200 $400 $200 4 $600 $700 $100 ROR 17.68% 16.44% 13.69% Project A Project B Both Project A and B Select none of the project. Insufficient information to make a decision.A project has an investment of $150,000 in year 0 and an additional investment of $20,000 at the end of year Project starts producing net cash inflows of $50,000 end of years years 2-7 (years 2 to years 7? What is the internal rate of return (IRR) of this Project? A 12.00% 13.77% 14.51% 15.00% 21.13%
- Solve with complete solution and draw the cash flow diagram A project your firm is considering for implementation has these estimated costs and revenues: an investment cost of $50,000; maintenance costs that start at $5,000 at the end of year (EOY) 1 and increase by $500 each year until year 10 ; savings of $20,000 per year (EOY 1–10); and finally a resale value of $35,000 at the EOY 10. If the project has a 10-year life and the firm’s MARR is 10% per year a) what is the present worth of the project? PW = $___ b) What is the Future Worth of this project? FW = $___ c) What is IRR ? IRR = ___ % d) Is it a sound investment opportunity? YES or NO e) Determine the Discounted Payback? ____ 5 years Note: For equivalent worth, round off the final answer to whole number. For Rate of Return, round off to two decimal places (in percentage)(c) If A and B are mutually exclusive projects, which project would you select based on the rate of return on incremental investment at MARR = 10%? The rate of return on the incremental investment is %. (Round to one decimal place.) Which project would you select based on the rate of return on incremental investment at MARR = 10%? Choose the correct answer below. Project A O Project B 1: More Info FOT23 n 0 1 Net Cash Flow Project A - $145,000 35,000 35,000 140,000 Project B - $130,000 25,000 25,000 150,000The following cash flows result from a potential construction project for your company: 1. Receipts of $565,000 at the start of the contract and $1,200,000 at the end of the fourth year 2. Expenditures at the end of the first year of $400,000 and at the end of the second year of $900,000 3. A net cash flow of $0 at the end of the third year. A Using an appropriate rate of return method (Approximate ERR), for a MARR of 20%, should your company accept this project (Perform all calculations using 5 significant figures and round your answer to one decimal place. Also remember that text answers are case-sensitive):? Answers entered using text are case sensitive! What is the approximate ERR for this project? Number 5 Should your company undertake this project? (Enter either 'Yes' or 'No'): 198 团
- 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.Business Decisions Sharon, the owner of the Brentwood Motel, is planning to renovate all the rooms in her motel. There are two plans before her. Plan A calls for an immediate cash outlay of $900,000, whereas plan B calls for an immediate outlay of $600,000. Sharon estimates that adopting plan A would yield an income stream of f(t) = 3,070,000e0.04t dollars/year for the next 5 years, whereas adopting plan B would yield an income stream of g(t) = 3,400,000 dollars/year for the next 5 years. If the prevailing rate of interest is 5%/year compounded continuously, which plan will yield the higher net income (in dollars) at the end of 5 years? plan A O plan BExplain three elements of project cash flows?
- You are asked to evaluate ergonomic interventions for your company based on the following projections: Decreased annual Workers' Compensation costs: $13,060 Increased annual production: $17,501 Initial purchase costs: $4,561 If you have an expectation of 3.75% interest over a 6-year period, what would you calculate the multiplier for the Worker's Comp equivalence calculation to be if you're asked to evaluate the future worth over the life of the project?5) The University has just invested $9,000 in a new desktop publishing system. From past experience, annual cash returns are estimated as A(t) $8000 - $4000(1 + 0.15)t- 1 S(t) $6000(1 0.3)t where A(t) stands for the net cash flow in period t and S(t) stands for the salvage value at the end of year t, and t 2 1. If the MARR is 12%, compute the annual equivalent cost in year 210. Jake is considering renovating his movie theaters. Data for four different designs are shown. Each one has a 12-year life, no market value, and the MARR is 15% per year. One of these designs must be selected. Use the Incremental Investment Analysis Procedure with the ERR Method to determine which design is best. Clearly indicate the ERR for each increment. e = 15%. A B D. Capital Investment Annual revenue less expenses $60,000 $14.000 $45,000 $12,000 $40,000 $10,000 $28,000 $8,000