A project earns cash flows of $100 per month and the monthly discount rate is 0.5%. The present value of these cash flows is $ [Select ] If initiating the project costs $15,000 then the NPV of the project is $ [Select]
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- What is FW of Design A, Design B, and Design C. Which alternative should be chosen. Do not round off in the solution.a) Define NPV (Net Present Value), Payback and IRR (Internal rate of Return). b) Calculate NPV of the following projects. Discount rate is 10%. c) Which project should be chosen and why? Project Mils proj A Cash flows £ proj B Year 0 Year 1 -10 2 Project Mils proj C Cash flows £ Year 0 Year 1 -10 7 Cash flows £ Project Mils Year 0 -8 Year 1 3 Year 2 Year 2 Year 2 5 5 3 Year 3 7 Year 3 2 Year 3 3If the local government invests in a project which has a 20 years useful life and initial investment of 2.25 million dollars and the yearly benefit is $250,000, with a maintenance cost (starting in year 1), what is Benefit Cost Ratio (rounded to the whole percentage, no decimals)? none of the given choices 80%, B. С 75%, D. 60%,
- What can you say about negative and positive gross margin in sensitivity analysisA certain masonry dam requires 200,000 cu m of gravel for its construction. The contractor found two possible sources of gravel with the following data: Average distance gravel pit to dam site Gravel cost /cu.m at pit Purchase price of pit Road construction necessary Overbuden to be removed at P4.20 cu.m Hauling cost per cu.m per km Which of the two sites will give lesser cost? Source A 3.0 km P800,000.00 P350,000.00 P5.00 Source B 1.2 km P10.00 80,000 cu.m P5.00recommend to SLB to increase capacity without any additional equipment or labour! 8. Greg Kopp, Acting Dean of Engineering, is considering competing proposals to establish joint programs with universities in Australia and Mexico. Students enrolled in each program would pay an additional fee to participate in these programs. Australia $105,000 $60,000 Mexico $185,000 $71,000 Investment Net Benefit 3 years Project Life 2 years With a hurdle rate (MARR) of 10%, calculate the net present value and external rate of return of the two investments. As Greg Kopp, which option would you recommend the Faculty of Engineering pursue? TOTAL
- Mr. Decision is torn between two independent projects A and B. The data below each project are given and the MEAs under each project are also given. Take MARR = 12% for all projects. A. Perform the proper evaluation of all the projects available.B. Recommend the project(s) that can be selected from the list so you can help Mr. Decision to decide.C. Explain the method(s) of evaluation you used including the assumption(s) made.Investors put up $1040000 to construct a building and purchase all equipment for a new restaurant. The investors expect to earn a minimum return of 10 per cent on thier investment. The restaurant is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks. Included in the fixed costs in 10% return to the investors and $2000 in other fixed costs. Variable costs include $2000 in weekly wages, and $600 per week in materials, electricity, etc. The restaurant charges $8 on average per meal. The operating profit per week of the restaurant is A)$0 B)$2900 C)$4600 D)$4900Please Calculate the break even point, Cash Flow, NPV, sensitivity of NPV to quantity sold, and sensitivity of OCF to changes in the variable cost figure
- A local government is considering promoting tourism in the city. It will cost$8,000 to develop a plan.111e anticipated annual benefits and costs are as follows:Annual benefits: Increased local income and tax collections $ 125,000Annual support service: Parking lot expansion, restroom. $50,000the patrol car, and street repairIf the city government uses a discount rate of 8% and a study period of fiveyears. is this tourism project justifiable according to the benefit-cost analysis?A manufacturer produces some output called "Product" using a raw material called Input". To production of 1 ton of Product requires 3/5 ton of Input. The manufacturer has a contract to deliver 50 tons of Product to Store M (Store M is the "market" for Product). Input is available in Spot N (Spot N is the source of Input, equivalent to "mine" om the Spot N. The ship Product and Input are $2 per ton per mile. We will help the manufacturer to find the total transport-cost minimizing factory location. To arrive at the answer, go through the following steps in parts (a), (b) and (c). (a) First consider two potential locations for the factory: Spot N and Store M. Calculate shipping costs by filling in the cells of the table below. Show your calculations Location of Factory Spot N Store M Input Shipping Cost Total Shipping Cost2) Alcem Pte. Ltd. Is in the business of manufacturing cement. The company sets up a 1 million ton plant. The total cost of setting up the plant is $100 million. The cost of Raw material/ Labor etc for producing 1 ton of cement is $ 40. The price of Cement is $80 per ton. Assume a Capital Cost of 10% (which is also its opportunity cost) a) What is the breakeven quantity of cement for Alcem? 250,000 tons b) In the short run, below what price should Alcem shut down? $40 c) If Alcem produces and sells 1 million tonnes of Cement, what is the Economic Profit it is making? $30 million d) If there are no barriers to entry in this business what would you expect