Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- Consider three mutually exclusive alternatives, each with a 15-year useful life. If the MARR is 12%, which alternative should be selected? Solve the problem by benefit–cost ratio analysis.arrow_forwardPlease do not give solution in image format thankuarrow_forwardThe following information is for five mutually exclusive alternatives that have 20-year useful lives. The decision maker may choose any one of the options or reject them all. Prepare a choice table.arrow_forward
- Which alternative should be selected using incremental rate of return analysis, if MARR = 12.0%? First cost Annual benefit Life ROR Do-nothing 0 10 yrs A B $6,500 $3,500 1,246 765 с D $7,500 $5,000 1,523 779 14.0% 17.5% 15.5% 9.0% B, because its ROR is the highest something other than C, because C costs the most initially C because C has the highest annual benefit C, because the C-B increment has a ROR of 13.70% and the A-B increment has a ROR of 9.66%arrow_forward21. NPV and Payback Period Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has historically used a three-year cutoff for projects. The required return is 10 percent. Ι Year Project F Project G 0 -$195,000 -$298,000 1 98,400 71,600 2345 86,300 94,500 81,600 123,600 72,000 166,800 64,800 187,200 a. Calculate the payback period for both projects. b. C. Calculate the NPV for both projects. Which project, if any, should the company accept?arrow_forwardAlternative A B C which to choose.arrow_forward
- solve, dont use excel. dont write the answer in a paper becuse of the handwriting. thanksarrow_forwardBased on ΔIRR and the information below, if the MARR is 20% and n = 5 years, Alternative ________should be selected. It's individual IRR is_______. Alternative_______has the lowest individual IRR at_______. Alternative w: Initial Cost, $2000; Annual Benefit, $700 Alternative x: Initial Cost, $1000; Annual Benefit, $330 Alternative y: Initial Cost, $2410; Annual Benefit, $840 Alternative z: Initial Cost, $3000; Annual Benefit, $1000arrow_forwardPlease do not give solution in image format thankuarrow_forward
- Nonearrow_forwardCalculate the result of NPV for project A with discount rate = 10%, the best solution is: Year 0 123 + 4 Select one: a. 95.5 b. 127.3 O b. O C. c. -181.8 O d. d. -136.4 A -800 100 200 300 200 B -200 50 70 80 240arrow_forwardConsider these mutually exclusive alternatives. MARR = 8% per year, so all the alternatives are acceptable. Solve, a. At the end of their useful lives, alternatives A and C will be replaced with identical replacements (the repeatability assumption) so that a 20-year service requirement (study period) is met. Which alternative should be chosen and why? b. Now suppose that at the end of their useful lives, alternatives A and C will be replaced with replacement alternatives having an 8% internal rate of return. Which alternative should be chosen and why?arrow_forward
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