Investor X has 7,000 to spend on the following three projects. Use the AW method to determine which of these independent investments are financially acceptable at 6% per year compounded monthly interest rate. Lifelong probl so Use CC=AW/i to get present worth. Option A B с Installed Cost 4500 3000 2200 Return per month 220 200 140

Investor X has 7,000 to spend on the following three projects. Use the AW method to determine which of these independent investments are financially acceptable at 6% per year compounded monthly interest rate. Lifelong probl so Use CC=AW/i to get present worth. Option A B с Installed Cost 4500 3000 2200 Return per month 220 200 140

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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Tom Thompson expects to invest $18,000 at 9% and, at the end of a certain period, receive $92,551. How many years will it be before Thompson receives the payment? (PV of $1. FV of $1. PVA of $1. and EVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.) Future Value $ 92,551 Present Value $ 18,000 = Table Factor Years years
1. Your client has been offered the opportunity to invest in a project which will pay $1,000 per month at the end of months 1 to 10 and $2,000 per month at the end of months 21 to 30. The interest rate over the period of the investment is a nominal rate of 8% p.a. If your client can buy the investment today for $25,000 would you recommend that this is a good investment? Why or why not?
2. Data for two alternatives are as follows: Alternative A Investment P 35,000 Annual Benefits 20,000 Annual Operations and Maintenance 6,450 Estimated Life, Years 4 Net Salvage Value 3500 Using an interest rate of 20%, which alternative should be considered? Alternative B P50,000 25,000 13,830 8 0
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Given the financial data in the table below for two mutually exclusive alternatives, determine the value "X" for the two alternatives to be equally attractive. Use an interest rate of 12% per year. Q Initial cost $2,500 $4,000 Annual benefit 400 Life
Find the Payback period for Oman Lighting company if the initial investment is 12000 OMR and the cash Inflows are as follows: Year 1 =3250 OMR; Year 2 =3500 OMR; Year 3=3750 OMR and Year 4=4000 OMR. Select one: a. None of the options b. 3 years 4 months c. 2 years 8 months d. 1 year 10 months e. 3 years
Hiren Add explanation
2
Consider the following four alternatives. Three are do-something and one is Do -Nothing. Alternative A B D Cost $O $50 $30 $40 Net annual benefit Useful life (years) Which is the preferred alternative? If 10% interest rate is selected. Use PW analysis. $O $14 $5 $7 5 10 10
Find the Payback period for Oman Lighting company if the initial investment is 12000 OMR and the cash Inflows are as follows: Year 1 =3250 OMR; Year 2 =3500 OMR; Year 3=3750 OMR and Year 4=4000 OMR. Select one: O a. 1 year 10 months O b. 3 years 4 months O c. 2 years 8 months O d. 3 years O e. None of the options

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