Mega Dynamics is considering the following two projects which have a cost of capital of 11%.  What is the NPV of the Flying Car project? The cash flows for each project are given below:   WACC = 11%   Time Flying Car Electric Car 0 -180,000 -100,000 1 30,000 25,000 2 50,000 30,000 3 75,000 40,000 4 110,000 50,000   A. 14,908   B. 8,158   C. 13,431   D. 9,055

A proposed project has the following costs and benefits.  Using linear interpolation,  the project’s discounted payback period (use i=10%) is _____________.   Year Costs Benefits 0 $4,000   1   $1,200 2   $1,200 3   1,000 4   1,000 5   3,000 6   2,000       A. 6.35 years   B. 5.82 years   C. 4.24 years   D. 3.37 years

6.1 A dam is proposed on a stretch of wild river, a river that is currently used for recreation. The dam will generate electricity. The dam will have a useful life of 50 years, after which its reservoir will be full of sediment and the dam will need to be removed. The following are characteristics of the dam: Initial Cost: $100,000,000 Electricity produced: 100,000 MWh per year at $100/Mwh Cost of decommissioning dam: $10,000,000 Value of recreation lost: $5,000,000 per year Assume that costs and benefits accrue at the end of each period. a. If the social discount rate is 3% per year, is the dam a good idea? b. If the social discount rate is 10% per year, is the dam a good idea? c. Calculate the "cutoff" discount rate, c, such that the dam is a good idea for discount rates rc and a bad idea for discount rates r > c.

Consider the following two mutually exclusive projects being considered by an agency. The agency's MARR is 5% per year and the projects have a service life of 5 years. Initial cost Annual revenues Present Worth (PW) Answer the following questions. Project 1 $14,200 $3,832 O A. No B. Yes $2,391 Project 2 $21,700 $5,608 $2,580 a. Based on the PW, the project that is more economical is Project b. Calculate the IRR of each alternative (use the trial-and-error method) % (Round to the nearest one decimal place) The IRR of Project 1 is The IRR of Project 2 is % (Round to the nearest one decimal place) (Enter the project number). c. Perform the incremental IRR analysis to determine the project that is more economical: Incremental IRR =% (Round to the nearest one decimal place); Therefore, based on the incremental IRR, Project is more economical. d. Do the two methods produce the same recomendation for the most economical project?

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You have been asked to perform an economic evaluation of two projects and recommend one of them for implementation. The project parameters are as follows: Project A Project B Discount Rate 4.0% 4.0% Your analysis concludes that: Project Cost $1,000,000 $750,000 Project Life (yrs) 10 15 Elec. Savings Elec. Cost (kWh/yr) ($/kWh) 800,000 600,000 O Project A is preferable, but Project B also has attractive performance. O Project B is preferable, but Project A also has attractive performance. O Project B is preferable and Project A results in a net loss. O Project A is preferable and Project B results in a net loss. $0.12 $0.12 Annual Cost Escalation Rate 1.5% 1.5%

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Two mutually exclusive projects are under consideration: Year Project A Project B -$5,200 -$7,500 1 2,800 1,000 2 2,800 2,500 3 2,800 4,000 4 2,800 5,500 5 2,800 7,000 Which project should be selected if the simple payback method is used to make the determination? Not enough information B; its payback period is longer O A; its payback period is shorter

A county in Tennessee is considering the following public interest project. Initial Cost $22.5M Annual Maintenance Cost $525K EUAB $3.3M Given a useful life of 12 years and an interest rate of 4%, the benefit /cost ratio is _____________________. Group of answer choices 1.01 1.13 1.51 1.67 1.48

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