2. B/C RATIO The city council of Morristown is considering the purchase of one new fire truck. The options are Truck X and Truck Y. the appropriate financial data are as follows: Truck X Truck Y $50,000 $64,000 $5,000 Annual Reduction in fire damage $20,000 | $22,000 6 Capital investment Annual Maintenance expenses $6,000 Life in years 6 The purchase is to be financed by money borrowed at 10%. Which truck is recommended using B/C ratio method.

2. B/C RATIO The city council of Morristown is considering the purchase of one new fire truck. The options are Truck X and Truck Y. the appropriate financial data are as follows: Truck X Truck Y $50,000 $64,000 $5,000 Annual Reduction in fire damage $20,000 | $22,000 6 Capital investment Annual Maintenance expenses $6,000 Life in years 6 The purchase is to be financed by money borrowed at 10%. Which truck is recommended using B/C ratio method.

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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1. CB Electronix needs to expand its plant. It is considering an alternative plan that will last indefinitely. The MARR is 15%. Please determine the capitalized cost of the alternative. Alternative: Expand by 20 000 square feet First cost = $2 000 000 Annual Maintenance costs = $10 000 per year starting in year 3 Periodic maintenance costs = $15 000 every 15 years, starting in 20 years
2
please solve with formulas like (F/P, 5% , n) not with the excell
E1 A city government is considering increasing the capacity of the current waste water treatment plant. The estimated financial data for the project are as follows: Calculate the benefit-cost ratio for this capacity expansion. Calculate B, I and C’ Calculate BC Ratio
Star City is considering an investment in the community center that is expected to return the following cash flows: Use Exhibit A.8. Year Net Cash Flow 1234in 5 $ 28,000 58,000 88,000 88,000 108,000 This schedule includes all cash inflows from the project, which will also require an immediate $208,000 cash outlay. The city is tax-exempt; therefore, taxes need not be considered. Required: a. What is the net present value of the project if the appropriate discount rate is 22 percent? (Round PV factor to 3 decimal places. Negative amount should be indicated by a minus sign.) Net present value
1
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V3. A school district considers two alternative plans for an athletic stadium. An engineer makes the following cost estimates for each: Concrete Bleachers. First cost, $350,000. Life is 90 years. Annual maintenance cost $2,500. Wooden Bleachers on Earth Fill. First cost, $200,000. Life is 90 years. Painting cost $12,000 every 10 years. New seats costs $40,000 every 15 years and new bleachers cost $100,000 every 30 years (don’t include replacing the bleachers in year 90). Compare equivalent uniform annual costs for a 90-year period using i = 7% compounded annually. (Which one would you choose?)
Vancouver Shakespearean Theater's board of directors is considering the replacement of the theater's lighting system. The old system requires two people to operate it, but the new system would require only a single operator. The new lighting system will cost $115,700 and save the theater $24,000 annually for the next eight years. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Exercise 16-28 New Present Value with Different Discount Rates (Section 1) (LO 16-1) Required: 1-a. Prepare a table showing the proposed lighting system's net present value for each of the following discount rates: 8 percent, 10 percent, 12 percent, 14 percent, and 16 percent. 1-b. Based on your findings in requirement 1-a., Which statement is true? Complete this question by entering your answers in the tabs below. Req 1A Prepare a table showing the proposed lighting system's net present value for each of the following discount rates: 8 percent, 10 percent, 12 percent, 14…
A city needs a new pedestrian bridge over a local stream. The city uses an interest rate of 5%, and the project life is 30 years. The following data (in millions of dollars) summarizes the bids that were received. Bid A $4.20 |Bid B Construction materials costs $6.20 Construction labor costs 0.60 0.70 Construction overhead costs 0.35 0.03 Initial administrative and legal costs|0.60 0.01 D- 94 Annual operating costs Annual revenue from operation 0.075 Unknown 0.40 0.25 0.05 Other annual benefits to the city 0.22 What would the annual revenue of Bid A have to be for the two projects to be equivalent? Choose the closest value. (a) 0.10 (b) 0.20 (c) 0.30 (d) 0.40

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