For the following alternatives compute the Delta B/C ratio of Alternative C minus Alternative A.Use 9% as MARR. (Remember for our convention, salvage value is a minus cost.)ABCDInitial InvestmentAnnual BenefitSalvage ValueUseful Life (years)$1,000$350$300$2,500$600$800$4,000$650$2,000$2,000$500$6007O1.73O1.57O1.30O1.29O1.46O1.59

Benefit cost ratio of Alternative C: B/C Ratio = Present Value of Annual Benefit/ Net Initial…

For the following alternatives compute the Delta B/C ratio of Alternative C minus Alternative A. Use 9% as MARR. (Remember for our convention, salvage value is a minus cost.) A B C Initial Investment Annual Benefit Salvage Value Useful Life (years) $1,000 $350 $300 $2,000 $500 $2,500 $600 $800 $4,000 $650 $2,000 $600 6. O1.73 O1.57 O1.30 O1.29 O1.46

For the following alternatives compute the Delta B/C ratio of Alternative C minus Alternative A. Use 9% as MARR. (Remember for our convention, salvage value is a minus cost.) A B C Initial Investment Annual Benefit Salvage Value Useful Life (years) $1,000 $350 $300 $2,000 $500 $2,500 $600 $800 $4,000 $650 $2,000 $600 6. O1.73 O1.57 O1.30 O1.29 O1.46

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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Given the financial data for four mutually exclusive alternatives in the table below, determine the best alternative using the incremental rate of return (AROR) analysis. MARR = 10%. A B C D $15,000 $21,200 $36,000 45,000 1,600 700 400 1,000 First cost O &M Cost/ year Benefit/year 8,000 9,000 13,000 Salvage value 3,000 4,600 6,000 Life in years 4 15,000 10,000
5. The data below are estimated for a project study. į = 10% Plan A Initial Investment Annual Operating Cost Life Salvage Value Annual Revenue Plan B Initial Investment Annual Revenue Annual Disbursement Life Salvage Value P 35,000 P 6,450 4 years none 19,000 P 50,000 P 25,000 P 13830 8 years none Which plan would you recommend? Use Present Worth Method and 8 years of study period. Profit for Plan A = 9047.85 Profit for Plan B =9, 591.13
Calculate the modified benefit-cost ratio for the alternative: Initial Investment Cost 350000 Revenues 150000 Costs 55000 Salvage 120000 n 7 MARR 0.1 Select one: a. 1.4599 b. 1.4101 c. 1.7354 d. 1.6035 e. 1.6480
1. Determine the B/C ratio for the following project. First Cost P100, 000 Project life, years 5 Salvage value P10, 000 Annual benefits P60, 000 Annual O and M P22, 000 Interest rate, % 15 Ans: B/C = 1.16
Evaluate the two alternatives A and B and decide the economic justified alternative using: Present worth method Future worth method 9 9 Annual worth method E.R.R Method I.R.R method E.R.R.R method 9 M.A.R.R 15%, the details of alternatives are shown in the table below Alternatives A B Investments $60,000 $75,000 Useful life (years) 5 10 Annual disbursements $25,000 $35,000 Annual revenues $45,000 $60,000 Salvage values $5,000 $10,000
Determine the future value of the following single amounts (FV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) (Round your final answers to nearest whole dollar amount.): Invested Amount Future Value 1. 14,000 7% 15 2. 21,000 6% 16 3. 33,000 12% 15 54,000 5% 11 4.
Evaluate the two alternatives A and B and decide the economic justified alternative using: Present worth method, Annual worth method, Future worth method I.R.R method E.R.R Method , E.R.R.R method M.A.R.R = 15%, the details of alternatives are shown in the table below Alternatives B A $6,000 $7,500 Investments Useful life (years) 5 10 Annual disbursements $2,500 $3,500 Annual revenues $4,500 $6,000 Salvage values $500 $1,000
Given the financial data for four mutually exclusive alternatives in the table below, determine the best alternative using the incremental rate of return (AROR) analysis. MARR =10%. A B D First cost $15,000 $21,200 $36,000 45,000 O &M Cost/ 1,600 700 400 1,000 year Benefit/year 8,000 9,000 13,000 15,000 Salvage value 3,000 4,600 6,000 10,000 Life in years 5
Determine the present value of the following single amounts (EV of $1, PV of $1. EVA of $1. PVA of S1. EVAD of S1 and PVAD of S1 (Use appropriate factor(s) from the tebles provided. Round your final answers to nearest whole dollar amount.) Future Amount Present Value 1. 34,000 5% 15 2. 28,000 6% 17 3. 39,000 10% 18 14 54,000 9% 11 54
Given: The interest rate is 3%, P = $150,000, and A₁ = $25,000. The salvage value that makes the sum of the cost and benefits equal to zero (0) is closest to 0 A1 (typ 5 places) 2 3 OP 44,093 O 41,154 O 47,084 50,159 SV 41 5
Determine the future value of the following single amounts. Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount. (FV of $1. PV of $1. FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) 1. 2 3. 4. Invested Amount 18,000 28,000 $ $ $ $ 40,000 61,000 8% 5% 5% 8% Ax 8 15 10 8 Future Valu THE
U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Capital investment Annual net income: Total Year 1 (a) 2 Project Bono 3 4 Project Edge 5 Project Bono $160,000 14,000 Project Clayton 14,000 14,000 Click here to view the factor table. 14,000 14,000 $70,000 Project Edge Project Clayton $175,000 $200,000 18,000 17,000 16,000 12,000 9,000 $72,000 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) years 27,000 years 23,000 Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.) years 21,000 13,000 12,000 $96,000

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