Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- The equipment used on a 4-year project will be sold at the end of the project (in Year 5) for $600 in nominal terms. If the expected inflation rate is 3.7% p.a., what is the real value of the equipment's salvage value? Question 5Answer a. $538 b. $482 c. $519 d. $500arrow_forwardCost of the investment $ 52,000 Annual cost savings $ 16,000 Estimated salvage value $ 8,000 Life of the project 5 years Discount rate 13 % The net present value of the proposed investment is closest to: (Round your intermediate calculations and final answer to the nearest whole dollar amount.) Multiple Choice $8,616 $4,272 $4,344 $28,000arrow_forwardPlease solve what is ask with complete handwritten solution, Thank you so much!arrow_forward
- Solve step by step in digital format, explain How would you set up the function in Excel to get the IRR of an investment of $22,500 over 6 years, saving $1,600 per year, with a final payment of $7,800? Option A Option B Initial cost -16,700 -18,500 Annual operating cost -990 -1270 Rescue value 8600 9500 Useful life 10 10arrow_forward1. Data for two alternatives are given in the table below. Determine the X cost of alternative B so that the two alternatives will be equally desirable. Assume an interest of 11%. Use BCR analysis. ALTERNATIVE A Cost 9500 Salvage value 1000 1600 Annual benefit 2800 3700 Life (years) 12arrow_forwardQuestion 1: If the interest rate is i= 10%, calculate the following: 1. Do the Present Worth Analysis (PW) for 11 years and select the alternative. 2. Do the Equvilent Uniform Annual Worth Analysis (EUAW) for 11 years and select the alternative. B $ 60000 $ 7500 $ 2500 $ 20000 $ 85000 $ 9000 $ 3000 $ 25000 Initial cost Annual benefits Annual operation and maintenance cost Salvage value Useful life 7 13 Value at the end of 11 years life $ 25000 $ 40000arrow_forward
- I need typing clear urjent no chatgpt use i will give 5 upvotesarrow_forwardSaved Help Save & Prairie Corporation has provided the following information for a proposed investment project: Discount rate 10% Life of the project 4 years Initial investment cost $23,775 Annual cost savings 7,500 Salvage value 1,500 What is the net present value of the proposed investment project? (Select the answer that is closest to your calculations.) Present value tables are provided below. Present Value of $1 Table (Exhibit 11B-1) (Partial table) Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0.797 0.783 0.769 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 0.712 0.693 0.675 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 0.636 0.613 0.592 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.593 0.567 0.543 0.519 4. 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.535 0.507 0.480 0.456 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.425 0.400 0.731 0.677 0.627 0.582 0.540…arrow_forward24arrow_forward
- D-74 Your company is considering two alternatives: Alt. I Alt. II First cost $42,500 $70,000 Annual maintenance 6,000 4,000 Annual savings if implemented 18,500 20,000 Salvage value 12,000 25,000 Useful life of alternative 3 years 6 years What is the annual dollar advantage of Alt. II over Alt. I at an interest rate of 15%? (a) Alt. II has no annual advantage over Alt I. (b) $3020 (c) $3500 (d) $7436arrow_forwardAlternative A B C which to choose.arrow_forwardSubject: accountingarrow_forward
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