Assuming that Alternatives B and C are replaced with identical units at the end of their useful lives, and an 8% interest rate, which alternative should be selected? Use an annual cash flow analysis. A B C $12,500 $15,000||$17,500|| cost Annual benefit 1,500 3,500 useful life (yrs) 00 7 2,500 15
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- What is the equivalent uniform annual payment for the following cash flows if the interest rate is 10%? Populate the following table and compute the equivalent uniform annual payment. Show all work and provide an explanation. Do not use Excel. [Hint: This problem is a mix of annuity, gradient, and a single future cash flows.] ΕΟΥ Cash Flows Annuity Gradient Future 1 $2,000 2 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 $14,000 IN 3 st 4 5 6 7. 8 9 10Solve the following problem using the present worth analysis for an interest rate of 8%. Alt. A Alt. B Alt. B Initial cost $1,700 $2,100$3,750 Benefit/year 1,000 |1,000 1,000 Life in years|2 3 6Project Y requires a $350,000 investment for new machinery with a four-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Machinery Selling, general, and administrative expenses Income Revelant Time Value of Money factors: PV $1 (8%, 4 years): PVA $1 (8%, 4 years): PVAD $1 (8%, 4 years): FV $1 (8%, 4 years): FVA $1 (8%, 4 years): FVAD $1 (8%, 4 years): 0.7350 3.3121 3.5771 1.3605 4.5061 4.8666 Project Y $350,000 157,500 87,500 49,000 $56,000
- Investment Opportunity Cash Flows in $ 1 3 1,100 $ (500) $ Suppose you are presented with the investment opportunity described in the table above Assume the applicable annual interest rate is 4.75% Calculate the NPV of this investment. Round your answer to two decimals (Do not include the S-sign in your answer, enter negative values with a minus sign and not in parentheses) Year Benefits Costs 2731.16 0 $ $ 350 $ $ (1,100) $ (1,300) $ 2 500 $ (1,500) $ 4 1,500 $ (400) 5 5,000Q5) Find the capitalized cost for the following cashflow (consider 4 years for one cycle and MARR = 7%) 10 A 10 A 40 40 0 150 2 50 3Solve for the value of X in the accompanying table, so that the cash flow A is equivalent to the cash flow B. Let i 8% per year. Cash flow A Cash flow B Year Cash flow, $ Year Cash flow, S 2. 8,000 2. 3. 3. 4. -2X 8,000 3X Select one: O a. 8381.6 O b. 9009.4 O c.7126.0 O d. 9637.2 O e. 7753.8 4.
- Projection of yearl cashflow Year Cashflow($) 0 (239000.00) 1 3789.00 2 47675.00 3 122097.00 4 407968.00 5 453324.00 Given that the discount rate is 10% What is the projects discounted payback period? Calculate for Net Present Value? Calculate Internal Rate of Return?8. By taking n as 30years and using 6% both as MARR and discount rate, compare the below three possible alternatives by using NPV (net present value) and IRR methods, and recommend the best possible alternative. Types of cashflows Alternatives Alternative A Alternative B Initial capital Annual operation and ETB 40,000 Alternative C ETB 5,000,000 ETB 7,000,000 ETB 11,000,00O ЕТВ 150,000 ЕТВ 100,000 maintenance cost Annual benefit ЕТB 560,000 ЕТB 800,000 ЕТВ 1,050,0004) The BKB Company is considering purchasing a machine for their manufacturing assembly operations. The machine would cost $150,000 and have no salvage value. It would allow them to assemble their product with one less direct labor person. The salary of one assembler for the next three years would be $55,000, $57,500 and $60,000.
- a) How many possible rate of returns b) If the reinvestment ratec 15%, find the composite rate of return. Year 1 Net Cash Flow -10,000 +15,000 +5,000 -7,000K (Present value of annuities and complex cash flows) You are given three investment alternatives to analy End of Year 1 5678AWN2 3 A $15,000 15,000 15,000 15,000 15,000 Investment B $15,000 15,000 15,000 15,000 C $20,000 60,000 a. What is the present value of investment A at an annual discount rate of 19 percent? (Round to the nearest cent.) BELEIDgnment (II) Saved Fox Co. has identified an investment project with the following cash flows. Year Cash Flow $1,290 1,240 1,590 2. 3 1,950 a. If the discount rate is 9 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the present value at 17 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the present value at 23 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Present value at 9 percent b. Present value at 17 percent C. Present value at 23 percent re to search