Two mutually exclusive alternatives have the estimates shown below. Use annual worth analysis to determine which should beselected at an interest rate of 15% per year.QR$-44,000$-11,000$3,000$-84,000$-6,000 in year 1, increasing by $1,000 per year thereafter$10,000First CostAOC per YearSalvage ValueLife2 years4 yearsAlternative (Click to select) vshould be selected.(Click to select)Q

Annual worth analysis: It is the computation of the equivalent annual worth of a project or an…

Two mutually exclusive alternatives have the estimates shown below. Use annual worth analysis to determine which should be selected at an interest rate of 15% per year. Q R First Cost AOC per Year Salvage Value Life $-44,000 $-11,000 $3,000 $-84,000 $-6,000 in year 1, increasing by $1,000 per year thereafter $10,000 2 years 4 years Alternative (Click to select) v should be selected. (Click to select) R

Two mutually exclusive alternatives have the estimates shown below. Use annual worth analysis to determine which should be selected at an interest rate of 15% per year. Q R First Cost AOC per Year Salvage Value Life $-44,000 $-11,000 $3,000 $-84,000 $-6,000 in year 1, increasing by $1,000 per year thereafter $10,000 2 years 4 years Alternative (Click to select) v should be selected. (Click to select) R

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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Consider the three small mutually exclusive investment alternatives in the table below. The feasible alternative chosen must provide service for a 10-year period. The MARR is 12% per year, and the market value of each is 0 at the end of useful life. State all assumptions (repeatablity/co-terminated at 5 year study period) you make in your analysis. Which alternative should be chosen? A B Capital Investment PhP 2,000 PhP 8,000 PhP 20,000 Use IRR (FW equation) analysis. Annual revenues less expenses 600 2,200 3,600 Useful life (years) 5 5 10 ANSWER: IRRA = 15.24% ; IRRB = 11.65% ; IRRC = Blank 3% ; Choose alternative Blank 4 %3D %3D Do not use comma and any unit of measure. Use two decimal places in the Final answer.
Provide solution please
Compare the alternatives C and D on the basis of a present worth analysis using an interest rate of 10% per year and a study period of 10 years. Alternative C First Cost $-40,000 $-11,000 $-24,000 AOC, per Year Annual Increase in Operating Cost, per Year Salvage Value Life, Years $-2,000 $-200 $-500 $6,000 $200 10 The present worth of alternative C is $ and that of alternative D is $ (Click to select) voffers the lower present worth.
Can someone please solve this question using hand calculations only? PLEASE AND THANK YOU!!!
Using incremental rate of return, consider the 3 alternatives below and a Minimum Attractive Rate of Return of 7 %, which alternative is preferred? Each have a useful life of 20 years and no Salvage value. A В C Initial $55,000 $27,000 $20,000 Investment Annual $5,600 $2,700 $2,200 income 8% 7.75% 9.06% Alt A Alt B Alt C
The equivalent annual worth of alternative A over an infinite time period is closest to:a. $-25,000b. $-27,200c. $-31,600d. $-37,100
The equivalent annual worth of alternative A is closest to:a. $-25,130b. $-37,100c. $-41,500d. $-42,900
A company is investigating two production options of the manufactured switches that have the estimated cash flows shown. Which orne should be selected on the basis of a present worth analysis at 10% per year? In-house Contract First cost, P Annual cost, P per year Annual income, P per year 3,000,000 400,000 1,400,000 200,000 0: 200,000 3,100,000 Salvage value, P Life, years 5
An investor is considering the development of a recreational complex with the following relevant data initial cost is P54M estimated life is 15 years salvage value is P2 5M yearly costs for operations and maintenance is P3 5M annual property tax is 4% of first cost insurance premium (payable at the start of the year) is 2% of first cost expected yearly revenue is P15M If the investor applies a 10% MARR determine the annual worth of this venture
Compare three alternatives on the basis of their capitalized costs at /= 8% per year and select the best alternative. Alternative E F G $-460,000 $-30,000 $90,000 4 First Cost AOC, per Year Salvage Value Life, Years $-80,000 $-65,000 $40,000 2 The capitalized cost of alternative E is $ The best alternative is (Click to select) ▼ alternative F is $ $-960,000 $-3,000 $450,000 ∞0 and alternative G is $
With the estimates shown below, Sarah needs to determine the trade-in (replacement) value of machine X that will render its AW equal to that of machine Y at an interest rate of 8% per year. Determine the replacement value. Machine X Machine Y 90,000 Market Value, S -40,000 for year 1,increasing by 2000 per year thereafter. 24,000 Annual Cost, $ per Year -59,500 Salvage Value Life, Years 19,500 The replacement value is $
Two investment opportunities are as follows: A B First cost $150 $115 Uniform annual benefit $26 $20 End-of-useful-life salvage value $O SO Useful life, in years 10 10 If the MARR is 13%, which alternative should be selected?

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