Answered: What is breakeven point for each…

What is breakeven point for each parameter if initial investment is £.30k, yearly revenue £20k, Yearly expenditure £5k, market value £1k while useful life is 5 years and MARR is 8%.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: A printed circuit board manufacturer will construct a new plant. The potential sites have the…

A: Site A (in Million) Site B (in Million) Initial Cost 30.7 34.2 Revenue/year 28.6 35.4…

Q: Most likely estimates for a project are as follows. MARR Useful life Initial investment Receipts -…

A: Initial Investment = 6500R-E = 1100 per yearn = 14,r = 10%

Q: An aerospace industry decides to purchase a new advanced machine.the cost of the machine are…

A: Given: To Find: The optimal machine:

Q: Current Attempt in Progress A new solid waste treatment plant is to be constructed in Washington…

A: Capitalized cost is a concept often used in finance and accounting, particularly in the context of…

Q: Economical solar energy and energy from fusion have been identified as two of engineering's grand…

A: Low-e windows Cost = $10,500 First-year Annual saving = $2,525Every year's increase in annual…

Q: Value Lodges owns an economy motel chain and is considering building a new 200-unit motel. The cost…

A: Given:- Cost to build motel=$80,00,000Average rental rate=$40No.of unit=200 To know:- Build…

Q: Two designs are suitable for housing track and field events. Design N costs $800,000 with annual…

A: Design N:- Initial Cost = 800,000 Annual Cost = 25,000/ year life = Infinite Design T:- Initial…

Q: Select the appropriate bundle of proposals using capital budgeting method. Here MARR is 12% per year…

A: To determine the best combination of proposals using the capital budgeting method, given the…

Q: A finance company advertises two investment plans. In Plan A, the company pays P10,500 after 12…

A: Present worth analysis refers to that method to measure viability of an investment in which we…

Q: For alternatives with unequal lives, LCM is not needed to analysis different alternatives based on…

A: We are going to use logical practices in Engineering Economics to answer this question.

Q: Miner's Mexican Grill Inc plans to open its 100th restaurant by the end of next year. The new…

A: here we calculate the annual worth of Miners Mexican Grill Inc. by using the given information and…

Q: Determine the FW of the following engineering project when the MARR is 16% per year. Is the project…

A: A project is acceptable only if it produces positive future worth. Given Information Investment…

Q: Future worth and annual cash flow analysis often require far less computation than rate of return…

A: There are various analytical tools to analyze different types of investment projects in the market,…

Q: (b) A project with an infinite life has the following details: Initial cost $6 million Annual…

A: A capitalized cost is an expense added to the cost basis of a fixed asset on a company's balance…

Q: Why is it okay to use Incremental IRR between two same life projects that has different first cost…

A: incremental IRR is important to work on the financial returns, with the two competition investment…

Q: You have an asset with a cost of investment (I) of $10,000 with a useful life (N) of 5 years, and a…

A: Given Initial investment I=$10,000 Salvage value (S)=$2000 Life of asset (N)=5 years Required:…

Q: QUESTION 10 Save Answer Determine the capitalized cost of an alternative that has a first cost of…

A: (Note:- Since you have posted multiple questions as per our policy we will solve only first question…

Q: A large telecom service provider has offered to one of its major industrial customer two alternative…

A: Given that, For Plan P, First cost (FC) = P 5,000,000 Time period (n) = 10 Years Net annual revenue…

Q: TRUE OR FALSE. If two investments are equal considering the time value of money, then they are said…

A: The concept that depicts that value of money today is considered to be worth more than the value of…

Q: Determine the FW of the following engineering project when the MARR is 17% per year. Is the project…

A: Future worth refers that value of any asset after a certain period of time with given return rate ,…

Q: Step by step solution for this question

A: Concurris Prototyping is committed to using the newest and finest equipment in its labs.…

Q: A project with an infinite life has the following details: Initial cost $6 million Annual operating…

A: A capitalized cost is an expense added to the cost basis of a fixed asset on a company's balance…

Q: There are two investment alternatives. Alternative A has an initial investment cost of 280000 TL.…

A: Present Worth (PW), also known as Present Value (PV) or Net Present Value (NPV), is a financial…

Q: An investment of 80,200 returned 20,000 per year over a five year useful life and then have a…

A: Given information Initial investment=80200 Return per year =20000 n=5 r=20% Annual cost=16500…

Q: Problem 03.019 Annual Worth Calculations Find the value of x that makes the equivalent annual worth…

A: Interest rate is the rate which is cost for borrower and it is reward for lender. It is the rate of…

Q: If you have the present worth of an alternative with a 5-year life, you can obtain its annual worth…

A: Time value of money: It refers to the value of money, which is more in the present time than the…

Q: Compare the alternatives C and D on the basis of a present worth analysis using an interest rate of…

A: The present worth of each option is the discounted value of future cash flows. It is the present…

Q: Most likely estimates for a project are as follows MARR Useful life Initial investment Receipts…

A: The objective of the question is to determine whether an initial investment of $3,450 is profitable…

Q: Determine the ERR of the engineering project shown below when the MARR is 18% per year and the…

A: * SOLUTION :- Given that , The MARR is = 18% The reinvestment rate is = 15%

Q: Value Lodges owns an economy motel chain and is considering building a new 200-unit motel. The cost…

A: Given:-Initial cost=$8,000,000Furnishing=$700,000Annual cost=$800,000MARR=12%To…

Q: Hospital is evaluating the purchase of new office equipment from three vendors. Assume MARR=15% and…

A: A financial term known as "present worth" refers to the value of a quantity of money now, taking…

Q: A company that manufactures brushless blowers invested $700,000 in an automated quality control…

A: The rate of return refers to the rate of discount that makes the net present value (NPV) for the…

Q: Three independent alternatives are given below. If MARR is 18%, what is your decision? A В Initial…

A: * SOLUTION :-

Q: For a certain potential investment project, we have the following estimates: Capital investment I…

A: Given information Initial capital=$100000 Annual revenue=$30000 Annual expenses=$9000 Market…

Q: Most likely estimates for a project are as follows. MARR 12% per year Useful life 9 years Initial…

A: Given, Initial Investment = 4000 R-E = 1100 per year

Q: If a project is evaluated using annual worth method, then we know that: Select one: a. Present…

A: If a project is evaluated using annual worth method, then we know that: Select one: a. Present worth…

Q: 5.15 An environmental engineer is considering three methods for disposing of a non-hazardous…

A: Answer a) To calculate annual worth AW = P(A/P,i,n) - A + F(A/F,i,n) Here, P = Initial Investment…

Q: The USDJPY spot price is 115.018 and the one month forward is 115.046. A one month expiration…

A: Following are the given values: Spot, USD/JPY = 115.018 Forward, USD/JPY = 115.046 Options, Call…

Question

What is breakeven point for each parameter if initial investment is £.30k, yearly revenue £20k, Yearly expenditure £5k, market value £1k while useful life is 5 years and MARR is 8%.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Two incinerators are being considered by a waste management company. Design A has an initial cost of $2,500,000, has annual operating and maintenance costs of $800,000, and requires overhauls every 5 years at a cost of $1,250,000. Design B is more sophisticated, including computer controls; it has an initial cost of $5,750,000, has annual operating and maintenance costs of $600,000, and requires overhauls every 10 years at a cost of $3,000,000. Using a 5%/year interest rate, determine the capitalized cost for each design and recommend which should be chosen.
I need the answer as soon as possible
Equipment needed at Valero Corporation refinery for the conversion of corn stock toethanol, a cleaner burning gasoline additive, will cost $175,000 and have net cashflows of $35,000 the first year, increasing by $10,000 per year over the life of 5 years.Develop a spreadsheet chart that plots AW vs interest rate to show where (what interestrate) the project switches from financially justified to unjustified. Use AW as the verticalaxis of the chart, and interest (i) as the horizontal axis of the chart. Use a range ofinterest rates spanning from 10% to 20%, and use increments of 1%. Label both axesand use a title for the chart.
Kim has $35057 to invest for 10 years. She has the following options: [A]term deposit at 5% compounded annually; [B] Shares, paying a rate of 4.98% per annum with dividend paid quarterly; and [C] A building society account, paying a return of 5.06% per annum with monthly rests. Advise Kim on which option to take if all the investments are equally secure. Calculate all the resulting values per situation
If the Savings function is S = -$300 + 0.75Y %3D Then the breakeven level of income is $1200. O True O False
Future worth and annual cash flow analysis often require far less computation than rate of return analysis Select one: True False
Consider the comparison between alternatives A and B. Using present worth method of analysis, and at an interest rate of 10% per year, the values of n that you should use in the uniform series factors to make a correct comparison are: A B First Cost ₱500,000 ₱900,000 Annual Operating Cost ₱100,000 ₱40,000 Salvage Value ₱130,000 ₱150,000 Life 3 years 6 years a. n=3 years for A and n=3 years for B b. n=3 years for A and n=6 years for B c. n=6 years for A and n=6 years for B d. n=6 years for A and n=3 years for B
The future worth of a project with initial cost P, positive annual cash flows of A, salvage value S, and interest rate of i over a life of n years can be calculated using which statement? (a) FW = −P(F/P, i%, n) + A(F/A, i%, n) + S(F/P, i%, n) (b) FW = P(F/P, i%, n) + A(F/A, i%, n) + S (c) FW = −P(P/F, i%, n) + A(F/A, i%, n) − A[(P/A, i%, n) + S (d) FW = −P(F/P, i%, n) + A(F/A, i%, n) + S?
Carlisle Company has been cited and must invest in equipment to reduce stack emissions or face EPA fines of $16,500 per year. An emission reduction filter will cost $75,000 and have an expected life of 5 years. Carlisle's MARR is 10%/year. Part a What is the future worth of this investment? $
Street cost 25 M now and 2 M annual maintenance. At i=10%, what is the capitalized cost?
Most likely estimates for a project are as follows. MARR Useful life Initial investment Receipts - Expenses (R-E) 10% per year 9 years $5,000 $1,200/year Click the icon to view the relationship between the PW and the percent change in parameter. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. (b) To which variable is the PW most sensitive to? OA. Receipts - Expenses OB. Usefule life OC. Initial Investment (a) Determine whether the statement "An initial investment of $6,000 keeps the investment economical." is true or false. O False O True
Value Lodges owns an economy motel chain and is considering building a new 200-unit motel. The cost to build the motel is estimated at $8.000.000; Value Lodges estimates furnishings for the motel will cost an additional $700.000 and will require replacement every 5 years. Annual operating and maintenance costs for the motel are estimated to be $800,000. The average rental rate for a unit is anticipated to be $40/day. Value Lodges expects the motel to have a life of 15 years and a salvage value of $900.000 at the end of 15 years. This estimated salvage value assumes that the furnishings are not new. Furnishings have no salvage value at the end of each 5-year replacement interval. Assuming average daily occupancy percentages of 50%, 60%, 70%, and 80% for years 1 through 4, respectively, and 90% for the 5th through 15th years, a MARR of 12%/year, 365 operating days/year, and ignoring the cost of land, should the motel be built? Base your decision on an internal rate of return analysis.…