Q.2- if the rate of return is 10 % and all equipment shown in the following tablehave service life for 20 years with no salvage value, which equipment should beselected using the incremental benefit cost analysis.EquipmentFirst cost,SY1600000 1500000 1900000 1200000Annnal M&O, S/year 500006000035000so000Benefits, S'yearDis benefits, S/year26900026000028200025000013000150002200020000Life, years20202020

The cost-benefit analysis is an important method of capital budgeting. It refers to the ratio…

Q.2- if the rate of return is 10 % and all equipment shown in the following table have service life for 20 years with no salvage value, which equipment should be selected using the incremental benefit cost analysis. Equipment Y First cost,S 1600000 1500000 1900000 1200000 Annnal M&O, S/year 50000 60000 35000 so000 Benefits, S/year 269000 260000 282000 250000 Dis benefits, S/year 13000 15000 22000 20000 Life, years 20 20 20 20

Q.2- if the rate of return is 10 % and all equipment shown in the following table have service life for 20 years with no salvage value, which equipment should be selected using the incremental benefit cost analysis. Equipment Y First cost,S 1600000 1500000 1900000 1200000 Annnal M&O, S/year 50000 60000 35000 so000 Benefits, S/year 269000 260000 282000 250000 Dis benefits, S/year 13000 15000 22000 20000 Life, years 20 20 20 20

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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QUESTION 3 If the first cost of an asset is $15,000, and an annual operating cost of $5000 with a salvage value of $3000 after 5 years. What will be the Annual worth and the Capital recovery. If i- 10% O AW -S-8465 and CR - $+4508 O AW = S-8465 and CR = $-4508 AW = S+4508 and CR = $-8465 O AW S-4508 and CR S-8465
( 1 contractor want to invest his money in on of project A or B if you know that the interest rate is 10%, choose the best alternative A or B using net present worth method? A 120 000 CU 15 000 CU/YEAR 10 000 CU/YEAR 12 000 CU 12 YEARS 3000 CU Initial investment Annual revenue Annual expense Salvage value Project life Cost of machines replaced every 3 حلقه میشو الباب diq Naama years B 135 000 CU 17 000 CU/YEAR 11 000 CU/YEAR 20 000 CU/YEAR 6 YEARS 3500 CU
a- At 10%, find PW for the following Table Warehouse cost equipment cost Installation cost Annual maintenance costs Annual Revenues Salvage Machine life 0 1 2 3 -90,000 b- A project with an IRR = 20%, it has the following NCF (S) X X 4000 (SUS) 50,000 46.000 Find X? 6,500 8,000 45,000 15,000 15 years
Q1
Q5: The machine using PW with first cost $75000, savings the annual operating cost $11000 per year and salvage value $55000 at the end of 4 years find the (P/F, i*,6).
0 ave servie if for 20 years with o savage value, Which equipment should be the rate of retum is 10 % and all equipment shown in the following table. slected using the incrementa bencfitcostanalysis
The following three alternatives have been developed and costed to improve the efficiency of aircraft engines. Compare the alternatives using capitalized cost and a MARR of 10% per year compounded annually. Alternative Alternative Alternative G First Cost, $ -1,000,000 -3,000,000 -5,000,000 Net income $ per year 325 000 400,000 600,000 Salvage value, S 50,000 70,000 Life, years 4 8.
31. Autobot Systems Inc. Is evaluating three robot proposals for use in its assembly line. Information regarding these proposals are as follows: Robot 1 Robot 2 Robot 3 Initial Cost P2 000 000.00 P3 000 000.00 P1 500 000.00 Annual Operating Cost 150 000.00 200 000.00 100 000.00 Annual Savings 1 200 000.00 1 300 000.00 1 200 000.00 Useful Life, years 3 6 2 Assuming a salvage value of 10% and a 17% MARR, determine which robot should be preferred using AW analysis. (Ans. AT1=P201 367.37; AT2=P296 740.03; AT3=P222 880.18; select robot 2)
Alternative A B C which to choose.
A firm is considering two alternatives that have no salvage value. At the end of 4 years, another B may be purchased with the same cost, benefits and so forth. a. Construct a choice table for interest rates from 0% to 100%. b. If the MARR is 10%, which alternative should be selected? Item Initial Cost Uniform Annual Benefits Useful Life, in years A -$10,700 2,100 8 B -$5,500 1,800 4
A firm has two alternatives for the improvement of its current production system. The data are as follows: Machine A Machine B First Cost - P6M First cost-P8968578 Annual operating cost-P250T Annual operating cost - P294445 Service life - 6 years Service life - 4 years Salvage value - P150T Salvage value - P142107 Using the Present Value (PV) Method and with the firm's interest rate of 23% cpd. annually, what the PV of Machine B?
Two alternatives are being considered: B First cost Uniform annual benefit Useful life, in 5000 9600 1750 1850 4 8 years If the minimum attractive rate of return is 7%, which alternative should be selected? Solution: 1. Use the increment analysis, we should use 2. Terms n= 3. The Increment CFD has 3 basic patterns: O AP= O AA= O AF= occurred at end of year 4. AROR= % 5. Choose Please answer all parts of the question.

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