ty is considering a replacement for its police radio. The benefits and costs of the replacement are shown below. Purchase Cost: $7,200 Annual Savings: $1,500 Annual Costs: $300 Life: 15 years What is the replacement’s benefit-cost ratio if th
Q: Self-Supporting Growth Rate Maggie's Muffins Bakery generated $2 million in sales during 2019, and…
A: concept. growth rate = (Profit margin×Retention ratio×Current sales)(Current total assets−Current…
Q: Which of these gives the highest effective rate of interest? - 16.35% compounded twice every month -…
A: There are two unrelated questions visible on the screen. Only the first question has been answered.…
Q: 1. Caden visits a bank and wanted to borrow some money to start for a printing press business. He…
A: Information Provided: Option 1: Loan of 50,000 @10% for 3 years Option 2: Loan of 30,000 @5% for 10…
Q: Deposits other than customer payments are entered using: a. Receive Payments b. Pay Bills c. Bank…
A: A bank account is an account with a bank that is used to deposit money and withdraw money. The…
Q: Shelley borrowed $1021.00 from the Central Bank at 8.9% per annum calculated on the monthly unpaid…
A: GIven, Interest rate per annum = 8.9% Interest rate per month = 8.9%/12 = 0.741667% Balance after…
Q: your view, what is the most important prediction of the Capital Asset Pricing Model? Among the…
A: 1) Capital asset pricing model is a model used to determine the required rate of return of an asset…
Q: From the chart below, what is the correct Total Asset Turnover? Current Assets $1,350 Total Assets…
A: Total asset turnover ratio is firm's ability to generate sales using its total assets. It is a…
Q: eBook The real risk-free rate, r*, is 1.7%. Inflation is expected to average 1.5% a year for the…
A: The yield on a bond is the required rate of return by the investors for investing in such bonds.…
Q: homeowner, Ms. Dee Young, needs to decide whether to install R-11 or R-19 insulation in the attic of…
A: Future value analysis is based on the future value of the initial investment and future value of…
Q: Find the interest rate that an ordinary annuity pays, if the annuity pays $312 per month with its…
A: An annuity pays regular and constant payments over a period of time. Here the annuity amount is $312…
Q: Given the indicated maturities listed in the following table, assume the following yields for US…
A: Data given: Maturity Years Yield Curve 1 3.60% 5 5.5% 10 5.5% 20 4.20% 30 4.00%
Q: This morning, you observe in the markets that the nominal interest rate is 6%, which includes…
A: This is a case of nominal rates, inflation rates and real rates. Hence Fisher equation will be used…
Q: Explain in words the following future- value formula: F₁ = P(1 + r)". n
A: Fn = P( 1 + r)n Where, Fn = Future Value after n time period P = Principal amount borrowed or…
Q: You are the vice president of finance for a manufacturer of scuba diving gear. The company is…
A: We have an expenditure in future whose value in today's dollar is known. We have to find the…
Q: How much would you be prepared to pay for a share in 3 years’ time that pays a $3.51 dividend each…
A: Annual dividend (D) = $3.51 Required return (r) = 0.0517 Stock price in 3 years = ? When…
Q: There are three explanations for the shape of the yield curve i.e. Unbiased expectations theory,…
A: The term structure of interest rates is a function of the terms of the bonds and the variation in…
Q: Molly Slate deposited $35,000 at Quazi Bank at 6% interest compounded quarterly. What is the…
A: To calculate the effective rate we will use the below formula Effective rate = (1+(r/m))m-1 Where…
Q: 4. find the periodic payemnt R required to amortize a loan of P dollars over T years with interest…
A: The periodic payment is made at regular intervals and the amount of period payment for each period…
Q: What interest rate must Bertha earn on her savings if she plans to make equal semiannual savings…
A: Data given: pmt= $12941 period= semiannual N=9 years nper=9*2=18 FV= $ 359,268
Q: Suppose you are thinking of purchasing the Luna Co.’s common stock today. If you expect Luna to pay…
A: Fair value of the share price today is the present value of all future payments.
Q: 9. Consider a 4-year zero-coupon bond with a par value of $1,000 selling for $871.442. What is the…
A: Note: Question 3 posted does not relate to Finance subject. Hence, question 9 and 10 is answered.…
Q: What is the incremental cash flow for a company that pays $5000 to a consulting firm to undertake a…
A: Payment to consulting firm = $5,000 Net cash inflows = $25,000 Incremental cash flow = ?
Q: bod od ducull PRINCESS Processing Company has two products. The actual sales data for the past two…
A: Product AB Product CD Units Unit Price Units Unit Price 2019 25,000.00 ₱…
Q: The Wonder Company uses only the IRR method for capital budgeting. Suppose it is considering a…
A: Initial Cost = -$93 Cash Flow in Year 2 = $108
Q: 12. Cameron Industries is purchasing a new chemical vapor depositor in order to make silicon chips.…
A: Incremental free cashflows for year 2 =[ ( Gross Profits - Associated costs - depreciation ) * (1…
Q: The Alabi corp is considering a project which requires an expenditure of $100,000 at t=0 intially,…
A: First, we need to determine the Operating Cash flow (OCF) using the formula below: Net Income =…
Q: The total return is enter your response here%. (Do not round until the final answer. Then round to…
A: Return The profit or loss received by the investor from the investment is known as return. Return…
Q: Broussard Skateboard's sales are expected to increase by 15% from $8.8 million in 2019 to $10.12…
A: Buiness wants to grow and for maintaining growth there is need of investment because assets and…
Q: The cost of debt for firm XYZ is 6%. It's tax rate is 40%. The cost of retained earnings is 12% and…
A: Always money is limited and so we can not do all projects so we need to sort the project and select…
Q: (a) For Loan A, the interest rate is 6.15% per year and the loan term is 7 years. Find the total…
A: Information Provided: Loan amount = $7500 Loan A & B rate = 6.15% Loan A Period = 7 years Loan…
Q: Calculate the amount of money that must be invested today for an individual to receive the future…
A: Information Provided: Period = 30 years Yearly payments = $3000 Future value = $250,000 Interest…
Q: You just bought a newly issued bond which has a face value of $1,000 and pays its coupon once…
A: Price at which the bond is purchased is the present value of all the expected cash flows in the form…
Q: BadRock Corp is evaluating a project with revenues will be $3.5 million and cash expenses will be…
A: Free Cash Flow refers to the concept which dictates the cash which a company is generating after…
Q: Compute the IRR, NPV, PI, and payback period for the following two projects. Assume the required…
A: Given, Cashflows of Project A Cashflows of project B
Q: You need a P70, 000.00 per year for four years to go to college. Your father invested an amount of…
A: Investment amount = P100,000.00 Interest rate = 7% Future value period = 22 years Annual withdrawal…
Q: Find the savings plan balance after 9 months with an APR of 4% and monthly payments of $150. The…
A: Information Provided: APR = 4% Monthly payment = $150 Period = 9 months
Q: Find the present worth (at time 0) of the cash flows shown in the diagram below. Assume i=10% per…
A:
Q: On 1st of December 2020, Mohamed entered in a Forward rate agreement 2*4 FRA with a fixed rate of…
A: As per the given information: Forward rate agreement Fixed-rate - 6.00% Notional amount - $2,000,000…
Q: PowerTech Co. has issued bonds with a fifteen-year maturity that are paying a coupon of 5%. Rates…
A: Yield to Maturity = Coupon Payment +( Face Value - Market Price)/Years to Maturity/Face Value +…
Q: Hedgers can enter into an insurance policy, also known as a financia contract, also known as a…
A: There are mainly three types of derivative contracts. They are – futures, options and swaps.
Q: Country Day's scholarship fund receives a gift of $ 135000. The money is invested in stocks, bonds,…
A: Lets;s consider Stocks = S Bonds = B CDs = C So, Total Investment , S + B + C = 135,000…
Q: Which of the following statements is false? The equivalent annual value of a project is equal to…
A: Several statements have been given. We have to find the one that is FALSE.
Q: The cc risk free rate r = -0.15% (yes, r ≤ 0). The spot price for TFS is So = 42.50, the cc dividend…
A: Given: cc risk free rate (r) = -0.15%(yes,r<0)S0= 42.50cc dividend rate = 8%annual volatility (σ)…
Q: c. Compare the amounts of money that Mitch and Bill deposit into their accounts. Mitch deposits…
A: Data given: Mitch began depositing $1400 per year into a savings account for the first 10 years.…
Q: Consider a coupon bond x with value at maturity 150 euro, maturity 10 years, annually paid coupon of…
A: Duration of bond shows that how much are going to be change in price of bond with change in interest…
Q: Stephanie Carter has been gifted a sum of $50,000 by her grandparents on completing her graduation…
A: Given: Particulars Pan Elixir Rebound Cheers Think local Last year dividend $2.50 $0.50 $1.00…
Q: A person purchased a $143,305 home 10 years ago by paying 15% down and signing a 30-year mortgage…
A: Given, Cost of loan is $143,305 Term of loan is 30 years Down payment is 15%
Q: Smitty's pays $423.73 to a wholesaler for each DVD player they buy. Their operating expense is 33%…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: If the debt is being amortized by equal payments, what is the amortization schedule ?
A: As calculated, Annual installment is $ 88,094.54 Closing Balance = Opening balance + Interest on…
Q: The Wild Rose Company has $1,000 par value (maturity value) bonds outstanding at 9 percent interest.…
A: Current price of the bond is the sum of the present value of all the expected cash flows as coupon…
A City is considering a replacement for its police radio. The benefits and costs of the replacement are shown below.
Purchase Cost: $7,200
Annual Savings: $1,500
Annual Costs: $300
Life: 15 years
What is the replacement’s benefit-cost ratio if the effective annual interest rate is 8%?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- A major equipment purchase is being considered by Metro Atlanta. The initial cost is determined to be $1,000,000. It is estimated that this new equipment will save $100,000 the first year and increase gradually by $50,000 every year for the next 6 years. MARR=10% a. Using Benefit- Cost analysis, what is the Benefit/Cost ratio for this equipment purchase? b. Based on the Benefit/Cost analysis should Metro Atlanta purchase the equipment?Elm City is considering a replacement for its police radio. The benefits and costs of the replacement are shown below. What is the replacement’s benefit-cost ratio if the effective annual interest rate is 8%? Purchase Cost: $7,000 Annual Savings: $1,500 Life: 15 years. a. 3.21 b. 1.83 c. 1.76 d. 1.34.Use Annual Worth method to calculate the benefit/cost ratio at i = 6% for a new library. The first cost is $500K, and O&M costs are $100K per year. There is no salvage value after 30 years. Community benefits are estimated to be $130K per year. Is the library economically justified? Write a brief interpretation of your answer
- A city is spending $20.8 million on a new sewage system. The expected life of the system is 40 years, and it will have no market value at the end of its life. Operating and maintenance expenses for the system are projected to average $0.8 million per year. If the city's MARR is 12% per year, what is the capitalized worth of the system? The study period is 100 years. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. The capitalized worth of the system is S million. (Round to two decimal places.)The city council of Morristown is considering the purchase of one new fire truck. The options are Truck X and Truck Y. The appropriate financial data are as follows (shown): The purchase is to be financed by money borrowed at 12% per year. Use this information to answer, What is the conventional B–C ratio for Truck X? (a) 1.41 (b) 0.87 (c) 1.64 (d) 1.10 (e) 1.15.The general city population is set to benefit in travel-time savings from a municipal road project amounting to $80,000. The local government will incur an initial spending of $2,500,000 and an operating and maintenance cost of $30,000 per year. This new road will reduce accidents, representing medical savings of $135,000. Consider a 15- year period and an interest rate of 5%. What is the modified benefit-cost ratio of this project?
- A flexible pavement construction project is proposed. The estimated service life is 20 years. The initial cost is estimated at $205,000, and it would have a salvage value of $34,000 at the end of its useful life. The yearly maintenance is estimated at $2,505. What would be the present worth of life-cycle costs? What will be the user cost savings annually to justify the pavement construction ? Use interest rate of 5%.Happy Trails Senior Living Community is considering investing in solar panels to save on utility costs. The initial cost of the panels, including installation, is $250,000. The expected reduction in utility costs are noted below. Utility costs savings for the next five years are: Year 1: $65,000 Year 2: $68,250 Year 3: $71,663 Year 4: $75,246 Year 5: $79,008 The current interest rate used to evaluate investment decisions is 6%. The inflation rate is expected to remain constant at 3% for the entire period. Instructions (a) Compute the present value of the expected cash flows (savings). (b) Should Happy Trails move forward with the investment?Suppose the costs of an environmental pollution-control program are expected to be equal to $80 per year, and that benefits will be $50 per year for 50 years, then $150 per year thereafter. At a discount rate of 4 percent, what are the net benefits of this program? What would the net benefits be at a discount rate of 2 percent? Comment on the difference.
- If a garden center is considering the purchase of a new tractor with an initial investment cost of $120,000, and the center expects a return of $30,000 in year one, $20,000 in years two and three. $15,000 In years four and five, and $10,000 in year six and beyond, what is the payback period?If a copy center is considering the purchase of a new copy machine with an initial investment cost of $150,000 and the center expects an annual net cash flow of $20,000 per year, what is the payback period?Conestoga Plumbing plans to invest in a new pump that is anticipated to provide annual savings for 10 years of $50,000. The pump can be sold at the end of the period for $100,000. What is the present value of the investment in the pump at a 9% interest rate given that savings are realized at year end?