Southern Cement plans to open a new rock mining site. Two plans are suggested. Plan A: purchase two earth movers and an unloading pad at the plant. Plan B: construct a conveyor from mining site to the plant. MARR is effective 15% per year compounded monthly, and costs are given: First cost, $ Annual Operating cost, Salvage value, Life, years Mover 45,000 6,000 5,000 8 Plan A Compare two plans using AW method. Pad 28,000 300 2,000 12 Plan B Conveyor 175,000 2,500 10,000 24

Net present value is the most important concept of finance. It is used to evaluate the investment and financing decisions that involve cash flows occurring over multiple periods. The difference between the present value of cash inflow and cash outflow is…

The term investment refers to allocating money with the intention of getting positive returns in the future period. For example, an asset would be acquired with the motive of generating income by selling the asset when there is a price increase.

Capital investment analysis is a way of the budgeting process that companies and the government use to evaluate the profitability of the investment that has been done for the long term. This can include the evaluation of fixed assets such as machinery, e…

Capital budgeting is a decision-making process whereby long-term investments is evaluated and selected based on whether such investment is worth pursuing in future or not. It plays an important role in financial decision-making as it impacts the profitab…