System X System Y First cost, $ -45,000 -65,000 Annual operating cost, $ -21,800 -14,000 Salvage value, $ Life, years 3,000 6,000 5 5
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- MANAGEMENT OF TECHNOLOGY Project Selection Based on Economic Analysis 0.1 = MARR' Technology "A" Year Cost Income Net NPV IRR 0 -$650,000 $0 -$650,000 $148,621 17% 1 $0 $125,000 $125,000 2 $0 $175,000 $175,000 3 -$275,000 $300,000 $25,000 4 $0 $400,000 $400,000 5 $200,000 $200,000 $400,000 Technology "B" Year Cost Income Net NPV IRR 0 -$750,000 $0 1 $0 $175,000 2 $0 $200,000 3 -$370,000 $225,000 4 $0 $375,000 5 $300,000 $350,000 Technology "C" Year Cost Income Net NPV IRR 0 -$808,300 $0 1 $0 $200,000 2 $0 $225,000 3 -$265,000 $250,000 4 $0 $400,000 5 $202,000 $325,000 Increment B-A Year Cost Income Net NPV IRR 0 -$100,000 $0 -$100,000 -$23,453 5% 1 $0 $50,000 $50,000 2 $0 $25,000 $25,000 3 -$95,000 -$75,000 -$170,000 4 $0 -$25,000 -$25,000 5 $100,000 $150,000 $250,000 Increment C-A Year Cost Income Net NPV IRR 0 -$158,300 $0 1…12:09 pm a Bll 36% O 4 58346850211... Assignment- project analysis and evaluation Business management -ext -3d year 2021 g.c Ex: 1. A company is considering to appraise two projects. Two projects are available X and Y each costing $ 50, 000. the annual cash flows are expected as below, ACFS Year Plant X Plant Y 1 $ 15, 000 $ 5, 000 20, 000 15, 000 3 25, 000 20, 000 4 15, 000 30, 000 5 10, 000 20, 000 The cost of capital is 10%. Calculate 3) Profitability Index 4) Internal Rate of Return Scanned by CamScannerWhat is the most appropriate Analysis Period for the four different alternatives shown below? Item First Cost Uniform Annual Benefit Salvage Value Useful Life in Years Machine 1 $1,244,565 $273,804 $124,456 12 Machine 2 $2,297,397 $413,531 $229,740 20 d. 60 years e. 12 years Machine 3 $8,585,814 $1,416,659 $858,581 60 Machine 4 $3,737,193 $672,695 $373,719 30 Incremental Analysis (AIRR) b. 12 years for Machine 1; 20 years for Machine 2; 60 years for Machine 3; and 30 years for Machine 4 c. The average of the useful lives of the different alternatives, in this case, 30.5 years
- 12:09 pm l 36% 4_58346850211... Assignment- project analysis and evaluation Business management –ext -3d year 2021 g.c Ex: 1. A company is considering to appraise two projects. Two projects are available X and Y each costing $ 50, 000. the annual cash flows are expected as below. ACFS Year Plant X Plant Y 1 $ 15, 000 $ 5, 000 20, 000 15, 000 3 25, 000 20, 000 4 15, 000 30, 000 5 10, 000 20, 000 The cost of capital is 10%. Calculate 1) Pay back period 2) Net present value 3) Profitability Index 4) Internal Rate of Return Scanned by CamScanner ...What is the IRR of Project A? Year Project A 0 -3000 1 1000 2 1000 3 2500 18.54% 19.54% 23.54% 29.54% unansweredQuestion 1: For the given data which alternative is better using present worth analysis? Use i- 12% A $10,000 $4500 Initial Cost $12,000 $15,000 $4950 $4800 $400 $4500 Annual benefit Annual O&M cost $450 $375 Salvage value Useful life $2500 $4000 2 4 $ 3P86.24 -4.617.29 3.992.35 $ 357871 $ 2,132 55 What is PW of Alternative A? What is PW of Alternative B? -8.092.50 What is PW of Alternative C?
- Conduits made of Steel First Cost Php 80,331 Estimated Life 40 years Scrap Value none Annual Maintenance Php 237 Interest 0.074 What is the Capitalized Cost? *4 decimal points*A new machine with a purchase price of $90,021, with transportation costs of $9,593, installation costs of $6,472, and special acquisition fees of $2,612, would have a cost basis of a. $108,698 b. $96,493 Oc. $90,021 d. $99,105A Initial Cost + Installation $25,000 $15,000 Uniform end of year maintenance $2,000 $4,000 Overhaul, end of 3rd year $3,500 Salvage value $3,000 Service Lifetime 4 уrs 6 yrs Calculate the capitalized cost
- Given the problem: Conduits made of Timber First Cost $ 50,025.34 Estimated Life 13 years Scrap Value $ 2,992 Annual Maintenance $ 1,301 Interest 0.086 What is the Capitalized Cost?nuN-ntips%253A%252F%252Flms.mheducation.com%2521 Saved the Internal Rate Net Present Project Investment Required $160,000 $44 ,323 $135,000 $42,000 $100,000 Ş35,035 $175,000 $ 38,136 (years) of Return 18% Project Value A 7 16% 20% 12 7 D 3 228 The net present values above have been computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the project profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, project profitability index and internal rate of return. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the project profitability index for each project. (Round your answers to 2 decimal places.) Project Project Profitability Index tv MacBook Air 80 88 F2 F3 F4 F5 F6 F7 F9 F10 @ #3 $ % & 2 4 7 8. W E T Y D J K * CO 品:INGT202502 202223 Saved to this PC V Animations 1 BIUS ab AV - Aa- Slide Show Record Review View Help Accessibility. Investigate $ R Font % 5 T AAAEE G 2A Search Paragraph Drawing DCF Example: A company is considering the launch of a new product: ■ Investment required in equipment: £150000; Project life cycle: 5 years, Value of equipment in year 6: £10000, Cash inflow as follows: . E W 6 Year 1 2 3 4 5 An existing product can be discontinued immediately or retained instead of the new product for five years. If retained a cash inflow of £12000 p.a would be expected. Discount rate (cost of capital) is 15% p.a. Calculate the expected net present value of the new product (NPV=£67,000) Advise the company whether to launch the new product or retain the existing one. (New product generates NPV = £67k + £10k equipment value at end; NPV of exisitng product = £40k - advise launch new product) 4 & H 7 * U 8 Text Direction Align Text Convert to SmartArt £000 60 62 65 70 70 11 M 9 JU K Shape Fill…