What is the capital recovery (CR) cost of the project? Assume Cash Flow First cost, S Annual cost, S per year Revenue, S per year -1,000,000 -10,000 110,000 Salvage value, S Life, years
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- Foster Manufacturing is analyzing a capital investment project that is forecast to produce the following cash flows and net income: The payback period of this project will be: a. 2.5 years. b. 2.6 years. c. 3.0 years. d. 3.3 years.The table bellow shows the cash flow for an engineering project, if the reinvestment rate of return e is 6% per year, the external rate of rate (EER) is EOY Cash flow $ 13000 14 2000 5 to 10 8000Determine the ROR, AW, and PP of the following engineering project when the MARR is 20% per year. Is the project acceptable? Engineering Project Details Investment cost $60,000 Expected life 7 years Annual receipts $15,000 Annual expenses $2,675.40 a. The Rate of Return of the project is ? Write the answer in percentage value, up to 2 decimal places. b. How much is the cash flow excess? Roundoff answer to the whole number. c. The payback Period is Write the answer in two decimal places.
- 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)A Kshs.2.2 million investment will result in the following year end- cash flows : Year Cash flow 1 Kshs 1.6 million Kshs 800,000 3 Kshs.1.3 million 4 Kshs.1.9 million Using an 8% cost of capital, the project's net present value (NPV) is closest to: 2.The table bellow shows the cash flow for an engineering project, if the reinvestment rate of return e is 6% per year, the external rate of rate (EER) is : EOY Cash flow $ 13000 14 -2000 5 to 10 8000 Select one: O a 14.3% O b. 17.6% O G 7% O d. 20.1% O e. 10%
- A project is estimated to cost P120T, last 8 years & have a salvage value of P20T. The annual gross income is expected to average P40k & annual expenses is P6T. If capital is earning 12% determine if this a desirable investment using rate of return, what is ROR. a. 20.07% b. 21.7% c. 19.77% d. 20.77%Using the method of your choice calculate the Net Present Value of the following cash flows. Assume that the required return on this project is 15% Project A Initial Cost -$150 Year 1 $175 Yeat 2 $100The 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
- 4. Engineering company has a project and the project capital is 60000 RO. The interest compounded yearly from the project is 0.35 and the total project profits function in response of time (years)is P(t) = C(1+r)t C: capital of the project r: interest compounded yearly t: time in year After how many years the total project profits will be more than 1 million ORA project is estimated to cost P110,000, last 8 years and have a P15,000 salvagevalue. The annual gross income is expected to average P24,000 and annualexpenses, excluding depreciation, will total P6,000. If capital is earning 10% beforeincome taxes, determine if this is a desirable investment using A. Present Worth Method :B. Future Worth MethodC. Payback Period in yearsThe expected cash flows of a project are as follows. Year Cash Flow -100000, 20,000 ,30,000 40,000 ,50,000 30,000 The cost of capital is 12 per cent. Calculate the following and evaluate the project under each methods a. net present value b. Profitability Index c. Internal rate of Return d. Modified internal rate of Return and Payback period