1.A company have to choose the type of electrical generator to sustain its production operationin case of power failures.Type A Type BFirst Cost P200,000 P300,000Annual Operations Cost P 32,000 P 24,000Annual Labor Cost P 50,000 P 32,000Insurance & Taxes 3% of First Cost 3% of First CostPayroll taxes 4% of first Cost 4% of first CostEstimated Life 10 yrs 10 yrsNote: All the Types of Genset will depreciate.If the minimum required rate of return is 15%, which type of genset should be selected?How long the Return of Investment will be?

The process that analyzes and evaluates any project's profitability is considered capital budgeting.…

Answered: 1.A company have to choose the type of…

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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heavy equipment for a certain project and the details are as follows: ITEM: MACHINE A: MACHINE B: First Cost P2,000,000.00 P3,000,000.00 Annual operating P325,000.00 P250,000.00 cost Annual labor cost Insurance and taxes Payroll taxes Estimated life P500,000.00 P320,000.00 4% 10% 12 yrs. 4% 10% 12 yrs. If the minimum ROR is 25%, What is the annual cost of Machine A & B using present worth method?
RLC Manufacturing is planning to purchase a cutting equipment. Information are as follows: Equipment 1 Equipment 2 First Cost P 12,000 P 18,000 Salvage Value P 600 P 2,000 Annual Operation P 3,200 P 2,500 Annual Maintenance P 1,200 P 1,000 Taxes & Insurance 3% 3% Life, years 10 15 Money is worth at least 16%. Which equipment should be selected? Use: Annual Cost Method
4. A company is going to buy a new equipment for manufacturing its product. Four different equipment's are available; costs, operating and other expenses are as follows: Equipment A В D First Cost Php 24,000 Php 30,000 Php 49,600 Php 52,000 Power per year Php 1300 Php 1360 Php 2400 Php 2520 Labor per year Php 10,600 Php 9320 Php 4200 Php 2700 Maintenance/year Php 2800 Php 1900 Php1300 Php 700 Taxes & Insurance 2% 2% 2% 2% Life; years 5 Money is worth 10% before taxes to the company. Which equipment should be purchased ? Choose which method is applicable.
RLC Manufacturing is planning to purchase a cutting equipment. Information are as follows: Equipment 1 Equipment 2 First Cost P 12,000 P 18,000 Salvage Value P 600 P 2,000 Annual Operation P 3,200 P 2,500 Annual Maintenance P 1,200 P 1,000 Taxes & Insurance 3% 3% Life, years 10 15 Money is worth at least 16%. Which equipment should be selected? Use: a. Rate of Return Method Rate of Return Method Annual Cost Method NOTE: Show cashflow diagram.
In order to carry a new investment project, company A has to purchase a machine for OMR 400,000. Company A staff have enough capacity to carry out the production, no one new will need to be hired, they are currently paid OMR 20,000. Calculate the relevant cost? a. OMR 20,000 Ob. OMR 380,000 O c. OMR 400,000 d. OMR 420,000
Given the two machines’ data Machine A Machine B First Cost P8,000.00 P14,000.00 Salvage value 0 2,000.00 Annual operation 3,000.00 2,400.00 Annual maintenance 1,200.00 1,000.00 Taxes and insurance 3% 3% Life, years 10 15 Money is worth at least 16% Using equivalent uniform annual cost method, determine the value of alternative A and alternative B:
Given the two machines' data Machine A Machine B First Cost P8,000.00 P14,000.00 Salvage value Annual operation 2,000.00 3,000.00 2,400.00 Annual maintenance 1,200.00 1,000.00 Taxes and insurance 3% 3% Life, years 10 15 Money is worth at least 16% Using equivalent uniform annual cost method, determine the value of alternative A and alternative B: ANSWER for ALTERNATIVE A: Blank 1 ANSWER for ALTERNATIVE B: Blank 2
Average Total Cost in the Short and Long Run Average Total in short C run smailih factory A in short C run mediithn factory A in short C run largth factory A Cos in long run C $12,00 0. 10,000 Economie Constan iteturns to sdal scal Diseconomie e e S sal 1,00 1,20 Quantit Carfs per gav
Maintenance costs for a machine with an expected 10-year life are estimated to be $1,700 each year for the first 5 years Followed by a $2,000 expenditure in year 8 and a $2,500 expenditure in the year 10. What is the equivalent present worth cost? Assume i= 6% per year. Select one: O a.-10,233 O b.-11.497 Oc-9,812 O d.-8,127 O e.-6863
24. The following are annual cost of Peter Corp. relating to Material A which required 40,000 units per year: Unit Cost Insurance cost Storage cost Freight in Order cost P20 32 36 10 Interest that could have been earned on alternative investment of funds P320,000 What is the annual carrying cost per unit?
Question 1 UEM Construction Sdn Bhd is considering investing in a new construction equipment costing RM150,000. Its life is expected to be four years and it will have no scrap value at the end of this period. The following details are given relating to the machinery's activities: i, Unit selling price is RM40.00 and unit variable costs of production are: RM Direct materials 6.00 Direct ļabour 3.80 Variable overheads 5.20 ii. Sales volume relating to production of the construction equipment is expected to be: Year Sales Volume (units) 1 2,100 2,200 2,500 2,600 2 3 4 iii. Fixed costs amount to RM12,000 per annum. One quarter of the fixed costs is cash flow related items. iv. The company anticipates a cost of capital to be 10%.
Choose from the two equipment which is more economical. Machine A Machine B First cost Php 8000 Php 14,000 Salvage value Php 2000 Annual operation Php 3000 Php 2400 Annual maintenance Php 1200 Php 1000 Taxes & insurance 3% 3%

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