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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Scenario 2: Bremily Firewood Company is expanding their operations. The company has an expansion budget of $1,000,000 to use for contracting with local land owners. The company can contract with one, multiple, or zero local land owners. Assume the company has a MARR of 10% per year. 2C. Use the following information to determine which land parcels Bremily should contract with. Assume there is only one of each land parcel available and each parcel has an expected life of 6 years. Land Parcel Initial Owner Net Present Value Cost Peterson $564,000 $473,000 Johnson $475,000 $351,000 Smith $268,000 $194,000 Jefferson $832,000 $609,000 What is the best land parcel, or combination of land parcels, for Bremily Company to contract with? Note: Enter you answer as the number of each parcel (0 or 1) the company should choose.
mni.9
A city is planning to invest in potential projects with the estimated cash flows below. Given that interest rate is 4.880884817% per semiannual, determine which option is preferable if options are mutually exclusive using PW analysis. show the steps: please don't use excel
You currently work at Happy home Construction company The government offered the company 4 projects to undertake in building houses Management is trying to select the best investment from among these alternative independent projects. Each alternative involves an initial outlay of $160,000 and a 10% cost of capital. Management requires that all project investments should be recovered in 4 years. Their cash flows are as follows: Year Kinstown St Christina St Thomp St Bess 1 60,000 40,000 41,000 0 2 50,000 60,000 41,000 60,000 3 40,000 0 41,000 0 4 30,000 40,000 41,000 56,000 5 20,000 20,000 41,000 50,000 6 8,000 60,000 0 80,000 3a. Distinguish between Capital Expenditure and Revenue Expenditure citing,THREE examples of each. b.Explain the time value of money and the role of cost of capital in appraising investments. PLEASE DO QUESTION 3 A-B
The LJB Company must replace a freezer and is trying to decide betweenthe following two alternatives:Item Freezer A Freezer BInvestment required ($29,000) ($25,000)Annual electrical bill (3,000) (4,000)Salvage value 6,000 5,000Project life in years 11 11The LJB Company’s cost of capital is 8 percent.Which investment provides LJB with the lowest total cost?
Problem 40: A local city must make an assessment about the feasibility of repairing a bridge. The estimated useful life of the bridge is 25 years. The MARR is 7%. The relevant cost estimates are found in the table below in thousands of dollars. What is the B/C ratio of making repairs most nearly? (A) 1.20 (B) 1.60 (C) 1.90 (D) 2.20 Initial Cost (K$) Annual cost (K$); Year 1-15 Annual Cost (K$); Year 15-25 Salvage Value (K$) Existing 0 11 15 6 Repair 80 4 5 21
please hlp
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?)
H5. SGS Golf Academy is evaluating different golf practice equipment. The "Dimple-Max" equipment costs $140,000, has a 4-year life, and costs $9,200 per year to operate. The relevant discount rate is 13 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $21,000 at the end of the project’s life. The relevant tax rate is 21 percent. All cash flows occur at the end of the year. What is the EAC of this equipment? (Your answer should be a negative value and indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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
Baguio Rabbitry must replace the piping system in its barn. Based on cost of capital of 12%which of the two following alternatives should be chosen using the following methods?a) RORAI b) AW c) PW

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