Answer fast Suppose that Engie has sent their energy engineers like Bryce across campus and theyhave developed a list of potential energy conservation measures. Knowing that theyhave a $50 million budget to spend next year on CAPEX, what independent projectswould you recommend for them. Select all that you recommend to maximize the totalvalue to the university.Project Number/Title1. North Rec HVAC Improvement2. Old Med Center Building Energy Savings3. South Campus old residence hall upgrades4. West Campus Greenhouse systems enhancements5. Sports training complex Solar6. Central Chilled Water delivery to Innovation District7.. Hot water insulation in OSU Central coreCAPEX $ Millions Project NPV$9.60$0.50$14.20$10.30$9.30$2.10$1.70$2.50$6.60$0.25$16.20$6.60$0.66$0.80

The predetermined budget will be used for the projects that provide the highest NPV (Net Present…

Answered: Suppose that Engie has sent their…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 2TP: Austins cell phone manufacturer wants to upgrade their product mix to encompass an exciting new...

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Russell Trent was recently tasked with evaluating projects for Stan's No Touch Car Wash. The company recently decided to use NPV as its primary criterion for approving projects. To be selected, a project must have a positive NPV. Russell is currently evaluating a project with the following estimated investment requirements ($ millions) by year (starting in year 0): \ Investment Year Investment 0 16 1 10.1 2 12.5 The estimated revenues ($ millions) from the project, expected to begin at time 2, are given in the table below: Investment Year Investment 0 11.1 1 11.3 2 8.2 3 14.3 4 11.9 To account for the different risk characteristics throughout the project's life, Russell has determined that a hurdle rate of 23% should be used beginning at time 0, while 37% should be used beginning in period 4. Determine the NPV for the project. NPV=
A local university decides to install motion detection light switches in the faculty offices. The cost savings associated with these switches is $1.44 per year for each year of a switch’s 15 year life. This gives a total cost savings of $21.60 per switch. The purchase cost of each light switch was $20. What should the university keep in mind about this decision to install motion-detection light switches in the faculty offices?
Citco Company is considering investing up to $512,000 in a sustainability-enhancing project. Its managers have narrowed their choices to three potential projects. • Project A would redesign the production process to recycle raw materials waste back into the production cycle, saving on direct materials costs and reducing the amount of waste sent to the landfill. Project B would remodel an office building, utilizing solar panels and natural materials to create a more energy-efficient and healthy work environment. Project C would build a new training facility in an underserved community, providing jobs and economic security for the local community. Required: 1. Assuming the cost of capital is 12%, complete the table below by computing the payback period, NPV, profitability index, and internal rate of return. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) 2. Based strictly on the economic analysis, in which project should they invest?…
The city of Oak Ridge is evaluating three mutually exclusive landscaping plans for refurbishing a public greenway. Benefits to the community have been estimated by a landscaping committee, and the costs of planting trees and shrubbery, as well as maintaining the greenway, are summarized below. The city’s cost of capital is 8% per year, and the planning horizon is 10 years. Which landscaping plan will you recommend based on B/C ratio analysis? Landscaping plan A B C Initial planning cost $75,000 $50,000 $65,000 Annual maintenance expense 4,000 5,000 4,700 Annual community benefits 20,000 18,000 20,000
The city of Oak Ridge is evaluating three mutually exclusive landscaping plans for refurbishing a public greenway. Benefits to the community have been estimated by a landscaping committee, and the costs of planting trees and shrubbery, as well as maintaining the greenway, are summarized below. The city's discount rate is 10% per year, and the planning horizon is 10 years. Use the Incremental benefit cost (B/C) analysis to determine the best option. Note: Use the same excel sheet that you downloaded in the previous question to solve this question. Solve it in a new sheet in the same document. Annual benefits, Annual disbenefits, Plan Initial cost, $ Annual cost, $/year $/year $/year 50,000 3,000 20,000 500 90,000 4,000 30,000 2,000 C 200,000 6,000 61,000 2,100
The city of Columbus has identified three options for a public recreation area suitable for informal family activities and major organized events. As with most alternatives today, there are benefits, disbenefits, costs, and some savings. These have been estimated with the help of an external planning consultant and are identified in the table below. In each case, these are annualized over a 10-year planning horizon. Solve, a. Determine the B/C ratio for each project. Can you tell from these ratios which option should be selected? b. Determine which option should be selected using the incremental B/C ratio. c. Determine which option should be selected using B − C for each option. d. At what value of Option 2 costs are you indifferent between Option 1 and Option 2?
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Please set the following capital budgeting problem up in excel. Upload your answer. Include formulas where appropriate. You are responsible to make a recommendation to the college regarding the upcoming capital projects. Be sure to evaluate each project using payback, NPV, IRR and PI capital budgeting techniques. We do not have enough money to do both projects, please evaluate both and make your recommendation. Both projects will require an original cash investment of $1,500,000. We are considering a renovation to the classrooms (project A) and a renovation to the library (Project B). The classroom update will provide revenue of $700,000 and the library $900,000 year one. For the classroom update, cash inflow will be $300,000 years 1 & 2, $400,000 years 3 & 4 and $100,000 each year 5 and beyond. The library will have cash inflow of $500,000 years 1, 2, &3 and 100,000 each additional year after that. The college has a payback policy of 5 years and our cost…
Q2: A farmer must decide what combination of seed, water, fertilizer, and pest control will be most profitable and environmentally conscious for the coming year. The local agricultural college did a study of this farmer's situation and prepared the following table. Plan Direct Cost/Acre Extra-market Cost/Acre Income/Acre A $750 B C D 800 1000 1300 $150 450 250 200 $1200 1400 1500 1650 The last page of the college's study was torn off, and hence the farmer is not sure which plan the agricultural college recommends. Which plan should the farmer adopt considering (Criteria: Maximizing the profit-Income-Cost): (a) only the direct costs, (b) both the direct and extra-market costs?
Prepare the financial section of a business case for the Cloud-Computing Case that is listed above this assignment in Canvas. Assume that this project will take eight months to complete (in Year 0) and will cost $600,000. The costs to implement some of the technologies will be $300,000 for year one and $200,000 for years two and three. Estimated benefits will start in year 1 at$400,000 and will be $600,000 for years 2 and 3. There is no benefit in year 0. Use the business case spreadsheet template (business_case_financials.xls) template provided below this assignment in Canvas to calculate the NPV, ROI, and the year in which payback occurs. Assume a 7 percent discount rate for the template. notes* Payback occurs in the first year that there is a positive value for cumulative benefits - costs. (*Negative values are presented in parenthesis) Financial Analysis for Project Name Created by: Date: Note: Change the inputs, shown in green below (i.e. interest rate, number of…
Required information. [The following information applies to the questions displayed below) The following information is provided for each Investment Center. Investment Center Cameras Phones Computers Income $ 4,500,000 1,500,000 800,000 Average Assets $ 20,000,000 12,500,000 10,000,000 Compute return on investment for each investment center. Which center performed the best based on return on investment? Complete this question by entering your answers in the tabs below. Return on Performance Investment Based on ROI Compute return on investment for each investment center. Note: Round your final answer to 1 decimal place. Investment Center Cameras Phones Computers Income $ 4,500,000 $ 1,500,000 800.000 Average Assets 20,000,000 12,500,000 Return on Investment % % 10,000,000 %

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