Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Alternative 2
$6,400
$2,050
$520
$1,200
Useful life
9 years
10 years
a. Suppose that the capital investment of Alternative 1 is known with certainty. By how much would the estimate of
capital investment for Alternative 2 have to vary so that the initial decision based on these data would be reversed?
The annual MARR is 12% per year.
b. Determine the life of Alternative 1 for which the AWS are equal.
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year
Capital investment
Annual revenues
Annual expenses
Estimated market value
Alternative 1
$4,400
$1,500
$380
$650
a. The capital investment of Alternative 2 would have to be $ or less for the initial decision to be reversed (Round to
the nearest dollar)
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Transcribed Image Text:Alternative 2 $6,400 $2,050 $520 $1,200 Useful life 9 years 10 years a. Suppose that the capital investment of Alternative 1 is known with certainty. By how much would the estimate of capital investment for Alternative 2 have to vary so that the initial decision based on these data would be reversed? The annual MARR is 12% per year. b. Determine the life of Alternative 1 for which the AWS are equal. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year Capital investment Annual revenues Annual expenses Estimated market value Alternative 1 $4,400 $1,500 $380 $650 a. The capital investment of Alternative 2 would have to be $ or less for the initial decision to be reversed (Round to the nearest dollar)
1
2
3
4
5
7
8
9
10
11
12
13
14
15
Single Payment
Compound
Amount
Factor
To Find F
Given P
FIP
1.1200
1.2544
1.4049
1.5735
1.7623
1.9738
2.2107
2.4760
2.7731
3.1058
3.4785
3.8960
Discrete Compounding; /= 12%
4.3635
4.8871
5 4736
Present
Worth Factor
To Find P
Given F
PIF
0.8929
0.7972
0.7118
0.6355
0.5674
0.5066
0.4523
0.4039
0.3606
0.3220
0.2875
0.2567
0.2292
0.2046
0 1827
Uniform Series
Compound
Amount Present
Factor
To Find F
Given A
FIA
1.0000
2.1200
3.3744
4.7793
6.3528
8.1152
10.0890
12.2997
14.7757
17.5487
20.6546
24.1331
28.0291
32.3926
37 2797
Worth Factor
To Find P
Given A
ΡΙΑ
0.8929
1.6901
2.4018
3.0373
3.6048
4.1114
4.5638
4.9676
5.3282
5.6502
5.9377
6.1944
6.4235
6.6282
6.8109
Sinking
Fund
Factor
To Find A
Given F
AIF
1.0000
0.4717
0.2963
0.2092
0.1574
0.1232
0.0991
0.0813
0.0677
0.0570
0.0484
0.0414
0.0357
0.0309
0.0268
Capital
Recovery
Factor
To Find A
Given P
AIP
1.1200
0.5917
0.4163
0.3292
0.2774
0.2432
0.2191
0.2013
0.1877
0.1770
0.1684
0.1614
0.1557
0.1509
0 1468
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Transcribed Image Text:1 2 3 4 5 7 8 9 10 11 12 13 14 15 Single Payment Compound Amount Factor To Find F Given P FIP 1.1200 1.2544 1.4049 1.5735 1.7623 1.9738 2.2107 2.4760 2.7731 3.1058 3.4785 3.8960 Discrete Compounding; /= 12% 4.3635 4.8871 5 4736 Present Worth Factor To Find P Given F PIF 0.8929 0.7972 0.7118 0.6355 0.5674 0.5066 0.4523 0.4039 0.3606 0.3220 0.2875 0.2567 0.2292 0.2046 0 1827 Uniform Series Compound Amount Present Factor To Find F Given A FIA 1.0000 2.1200 3.3744 4.7793 6.3528 8.1152 10.0890 12.2997 14.7757 17.5487 20.6546 24.1331 28.0291 32.3926 37 2797 Worth Factor To Find P Given A ΡΙΑ 0.8929 1.6901 2.4018 3.0373 3.6048 4.1114 4.5638 4.9676 5.3282 5.6502 5.9377 6.1944 6.4235 6.6282 6.8109 Sinking Fund Factor To Find A Given F AIF 1.0000 0.4717 0.2963 0.2092 0.1574 0.1232 0.0991 0.0813 0.0677 0.0570 0.0484 0.0414 0.0357 0.0309 0.0268 Capital Recovery Factor To Find A Given P AIP 1.1200 0.5917 0.4163 0.3292 0.2774 0.2432 0.2191 0.2013 0.1877 0.1770 0.1684 0.1614 0.1557 0.1509 0 1468
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