Answered: 3. Using & IRR analysis, determine the…

3. Using & IRR analysis, determine the best altemative using a 10 year analysis period. MARR = 10%. Alternative A B C D PW Cost EUAB 900 800 600 400 115 125 97 75

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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Concept explainers

Risk Analysis

Risk management is the entire walkthrough process of helping the organization manage risks or avoid them altogether. It is an in-depth study to determine the risks and uncertainties faced by the business and how these impact the objectives and outcomes of the business. Risk analysis is a procedure of risk assessment followed by the management of an organization to avoid risks that may harm the functioning and efficiency of the company.

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i need the answer quickly

3.
Using A IRR analysis, determine the best altemative using a 10 year analysis
period. MARR
10%.
Alternative
A
B
C
D
PW Cost
900
800
600 400
EUAB
115 125
97 75

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6. Compare the following three alternatives by the IRR method, given MARR of 6%/year. First find if they are feasible and then compare them with the incremental rate of retum method (AROR). Construction cost S Benefits S/yr Salvage S Alt. Service Life (yrs) 510,000 145,000 -10,000 775.000 155,000 15,000 1,075,000 165,000 20,000 6.
Compare the following two alternatives by the IRR method, given MARR of 6%/year. First find if they are feasible and then compare them with the incremental rate of return (AROR). Alt. Construction cost $ Benefits $/yr Salvage $ Service Life (yrs) A 410,000 55,000 20,000 11 B 250,000 35,000 10,000 11
Two alternatives are being considered: B First cost Uniform annual benefit Useful life, in 5000 9600 1750 1850 4 8 years If the minimum attractive rate of return is 7%, which alternative should be selected? Solution: 1. Use the increment analysis, we should use 2. Terms n= 3. The Increment CFD has 3 basic patterns: O AP= O AA= O AF= occurred at end of year 4. AROR= % 5. Choose Please answer all parts of the question.
Two alternatives are being considered: First cost Uniform annual benefit Useful life, in years If the minimum attractive rate of return is 7%, which alternative should be selected? Solution: 2. Terms n= 8 1. Use the increment analysis, we should use B-A ο ΔΑΞ A 3. The Increment CFD has 3 basic patterns: ο ΔΡ= ο ΔΕΞ 4. AROR= 8.32 % 5. Choose B 5400 9800 1750 1850 4 8 B occurred at end of year 4
Given the following information, find the optimal indefinite plan. MARR = 10%. ND* = 3, Nc* = 3 AECD* = 4800 %3D AECC = 5100 The marginal costs (MC) for the defender and challenger for given years are provided below n=1 n=2 n=3 n=4 n=5 n=6 n=7 n=8 MC,De 4990 5050 5260 5500 5900 6440 MC, Ch 5080 5200 5400 5600 Go. 4).(j, 2).. (io, 3).(j. 4)0 O lio. 4).(j, 3) (io. 4).(j, 4)0 O lio, 3).(j, 3).. None of the above
6) Data for 2 alternatives are given below. If i = 10%, determine the cost of alternative A so that the 2 alternatives will be equally desirable using BC ratio. Alternatives A B Cost X P3,200 Salvage Value 900 600 Annual Benefit 1150720 Life (years) 8 8
1. 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) 12
3) Data for 2 alternatives are given below, determine the cost of alternative B so that the two alternatives will be equally desirable. Assume an interest rate of 15%. Use benefit cost ratio analysis Alternatives B Cost P100kX Salvage Value 10k 16k Annual Benefit 28k 30k Life (years) 10 12
19. for simple interest FIND THE UNKNOWN QUANTITY FOR EVERY GIVEN CONDITION (show your solution submit to classwork) t= 1 1/2 years, r = 10% F= P50,000 Find P and | *
For the following alternatives compute the Delta B/C ratio of Alternative D minus Alternative A. Use 11% as MARR. (Remember for our convention, salvage value is a minus cost.) Project Initial Investment A -1500 -2000 -2500 -5200 Annual Benefit 350 500 600 850 Salvage Value Useful Life 320 610 820 2300 O1.27 1.18 O 1.46 O 1.73 O 0.92
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