10. Bonus ·A company is considering purchasing a machine. They have narrowed theirchoices to the following two machines:Machine AMachine BOriginal CostScrap Value$C$C$0$5000Lifetime10 years$08 years$0Annual MaintenennceWhen the cost of capital is ji = 10%, the two mạchines have the same capitalized cost. Whatis the value of C? (Answer to the nearest dollar)

Machine A Machine B Overall Cost $C $C Scrap Value $0 $5000 Lifetime 10 years 8 years…

Answered: When the cost of capital is jı = 10%,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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12.
How did you find this amount because thourgh Excel spreeshit it gives another sum Now, let's address Rhule's concern about the cost of capital being off 300 basis points (3%): If the cost of capital is off by 300 basis points (10% -3% = 7%), we would recalculate the NPV using the new discount rate of 7% and check if the project still yields a positive NPV. NPV (at 7 %) = [( $6.77 million * ((1 - (1 + 0.07)^(- 10)) / 0.07)] - $16.5 million NPV (at 7%) = [$6.77 million * (1 - 0.508) / 0.07] - $16.5 million NPV (at 7%) = [$ 6.77 million *0.492/0.07] - $16.5 million Explanation: NPV (at 7%) = $34.6512 million - $16.5 million NPV ( at 7%) = $18.1512 million With a cost of capital of 7%, the NPV of the project is still positive at $18.1512 million. This indicates that even if the cost of capital is off by 300 basis points (3%), the project remains financially feasible and attractive.:;
Using a financial calculator, calculate the value of 1308 to the power of 3/8. The value is approximately is --
(b) Find the time path of capital K(t) given the following rates of net investment flow functions (i) I(t) = 10t2 +5 K(0) = 50 (ii) I(t) = 18t5 - 2 K(0) = 24 (iii) I(t) = 30t4 K(0) = 35 %3D (iv) I(t) = 23t K(0) =15
This graph shows the net present value of an investment with annual cash flows of -$1,000, $100, $300, $400, and $675 as a function of different costs of capital (interest %). Note that this cash flow returns increasing amounts after the initial investment. Drag left or right on the graph to move the cursors to see the net present value (NPV) for different costs of capital. The point where the curve crosses the X-axis determines the internal rate of return (IRR). (Note: due to limited pixel resolution, it is sometimes difficult to get to that precise point.)
Please good answer and not handwritten, you may use excel formulas but do all parts and explain, thanks!
1- Find the internal rate using the method of Internal Rate of Return (IRR) if i= 15%, for the table shown below. If the initial cost is (220,000 U) Cost (U) 350 380 400 500 550 470 780 650 690 450 Revenue 0 0 500 1000 770 450 880 660 890 770 (U) 1 2 3 Year 4 5 6 7 8 9 10
In a few sentences, answer the following question as completely as you can. The notion that money has time value is based on the existence of a non–zero opportunity rate (i.e., a rate of return at which it is possible to invest). Why is the opportunity rate so important? Construct an example that shows, with an opportunity rate of 0%, that the value of $1 received today will be $1 in the future.
Determine the present value of the following single amounts. Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) 1. 2 3. 4. Future Amount $ $ $ $ 32,000 26,000 37,000 52,000 i= 5% 6% 11% 10% n = 11 19 40 13 Present Value
Given mutually exclusive projects, which project should be selected given the MARR - 9%? Note that the actual rate of return for each of the project is greater than or equal to the MARR. The notation shows the project with the higher first cost minus the project with the lower first cost. (i.e. Ain-A = 8.2%neans that Project B has the higher first cost). The projects in order of smallest to largest first costs are Project A, then Project B and lastly Project C. Ain-A = 8.2% Aic-A = 10.1% Aie u = 10.5% O Project A O Project 8 O Project C

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When the cost of capital is jı = 10%, the two machines have the same capitalized cost. What is the value of C? (Answer to the nearest dollar)