Engineering Fundamentals
6th Edition
ISBN: 9780357112144
Author: Saeed Moaveni
Publisher: MISC PUBS
expand_more
expand_more
format_list_bulleted
Question
Chapter 20, Problem 46P
To determine
Check whether the company will invest in the project or not using the Excel function.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Q.4
A company is planning to expand its business after 5 years from now. The expected money required for the expansion
program is $50 000 000. The company can invest $5 000 000 at the end of every year for the next five years. If the
assured rate of return of investment is 10% for the company, check whether the accumulated sum in the account would
be sufficient to meet the fund for the expansion program. If not, find the difference in amounts for which the company
should make some other arrangement after 5 years?
The cash flows and initial investment for two different projects are given below.
Calculate the internal rate of return for the projects. Based on IRR identify which
project should be accepted. (Higher rate take value between 18% & 20%.
Years
Project X Project Y
130,000 85,000
1
25,000 40,000
2
35,000 35,000
3
45,000 30,000
4
50,000 10,000
5
55,000 5,000
Cost of capital 12%
12%
Show complete solution
You are faced with making a decision on a large capital investment proposal. The capital investment amount is $640,000. Estimated annual revenue at the end of each year in the eight year study period is $180,000. The estimated annual year-end expenses are $42,000 starting in year one. These expenses begin decreasing by $4,000 per year at the end of year four and continue decreasing through the end of year eight. Assuming a $20,000 market value at the end of year eight and a MARR = € =12% per year, answer the following questions. Using FW, AW and PW, determine whether this proposal is acceptable.
Chapter 20 Solutions
Engineering Fundamentals
Ch. 20.4 - Prob. 1BYGCh. 20.4 - Prob. 2BYGCh. 20.4 - Prob. 3BYGCh. 20.4 - Prob. 4BYGCh. 20.4 - Prob. 5BYGCh. 20.4 - Prob. BYGVCh. 20.5 - Prob. 1BYGCh. 20.5 - Prob. 2BYGCh. 20.5 - Prob. 3BYGCh. 20.5 - Prob. BYGV
Ch. 20.8 - Prob. 1BYGCh. 20.8 - Prob. 2BYGCh. 20.8 - Prob. 3BYGCh. 20 - Prob. 1PCh. 20 - Prob. 2PCh. 20 - Prob. 3PCh. 20 - Prob. 4PCh. 20 - Prob. 5PCh. 20 - Prob. 6PCh. 20 - Prob. 7PCh. 20 - Prob. 8PCh. 20 - Prob. 9PCh. 20 - Prob. 10PCh. 20 - Prob. 11PCh. 20 - Prob. 12PCh. 20 - Prob. 13PCh. 20 - Prob. 14PCh. 20 - Prob. 15PCh. 20 - Prob. 16PCh. 20 - Prob. 17PCh. 20 - Prob. 18PCh. 20 - Prob. 19PCh. 20 - Prob. 20PCh. 20 - Prob. 21PCh. 20 - Prob. 22PCh. 20 - Prob. 23PCh. 20 - Prob. 24PCh. 20 - Prob. 25PCh. 20 - Prob. 26PCh. 20 - Prob. 27PCh. 20 - Prob. 28PCh. 20 - Prob. 29PCh. 20 - Prob. 30PCh. 20 - Prob. 31PCh. 20 - Prob. 32PCh. 20 - Prob. 33PCh. 20 - Prob. 34PCh. 20 - Prob. 35PCh. 20 - Prob. 36PCh. 20 - Prob. 37PCh. 20 - Prob. 38PCh. 20 - Prob. 39PCh. 20 - Prob. 40PCh. 20 - Prob. 41PCh. 20 - Prob. 42PCh. 20 - Prob. 43PCh. 20 - Prob. 44PCh. 20 - Prob. 45PCh. 20 - Prob. 46PCh. 20 - Prob. 47PCh. 20 - Prob. 48PCh. 20 - Prob. 49PCh. 20 - Prob. 50PCh. 20 - Prob. 52PCh. 20 - Prob. 53PCh. 20 - Prob. 54P
Knowledge Booster
Similar questions
- Bawal Gumamit ng Excel( Don't use Excel) A small company purchased now for 1.15M will lose 75,000 each year for the first 4 years. An additional P400,000 invested in the company during the 4th year will result in a profit of 27,500 from the 5th year through the 15th year. At the end of 15 years, the company can be sold for 1.65M.a. Show the Cash Flow Diagram?arrow_forwardShow complete solution with cash flow diagram.The annual income from a rented house is $12.000. The annual expenses are $3000. If the house can be sold for $145,000 at the end of 10 years, how much could you afford to pay for it now, if you considered 18% to be a suitable interest rate?arrow_forwardSuppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 12 percent, and that the maximum allowable payback and discounted payback statistics for your company are 2.5 and 3.0 years, respectively. Time: Cash flow: 0 1 2 3 -$227,000 $65,000 $83,200 $140,200 4 $121,200 5 $80,400 Use the payback decision rule to evaluate this project. Note: Round your answer to 2 decimal places. Payback yearsarrow_forward
- Q2: Being a senior citizen you decide to invest $200,000 say for period 24 months, then describe what is the value you would expect to receive? Deposit rate (recurring deposit) available for various periods is given below.arrow_forwardQuestion 2 5 Points For a 20-year geometric cash flow progression increasing at 2% per year, the first-year amount is P1.020 and the interest rate is 10% per year. find its PW. ANSWER: Blank 1 Blank 1 Add your answerarrow_forwardFind the amount at the end of 3 years and 6 months if P7,000 is invested at 30% compounded quarterly, using simple interest for anytime less than a year interest period.arrow_forward
- Solve for each problems. Show your solution legible and neatly. Write the question, the given(also what is the given?), what to find and a cash flow diagram. Answers should be in 2 decimal places, unless stated otherwise. Solution should be hand-written. Question can be hand-written or type-written. Answer should be in 2 decimal places. If P8,000 shall accumulate for 10 years at 12% compounded quarterly. Find the compound interest at the end of 10 years.arrow_forwardWhat is the equivalent annual worth of the cash flow given in the accompanying figure? Assume i = 8% .arrow_forwardWhat is the equivalent present worth of the cash flow given in the accompanying figure? Assume i = 8%.arrow_forward
- Solve Problem 20.5 using Excel.arrow_forwardENGINEERING ECONOMICS Dr. Max borrowed P3, 500, 000 at 8% for 10 years. The loan stipulated that the following payments have to be made: P150, 000 at the end of the 1styear to the 3rd year; P200, 000 at the end of the 4th to the 5th year; P300, 000 at the end of the 6th to the 7th year; P400, 000 at the end of the 8th to the 9th year; and a final payment at the end of the 10th year. What should be the amount (Q) of the final payment?arrow_forward1. If P500,000 is deposited at a rate of 11.25% compounded monthly, determine the compounded interest after 10 years and 7 months. Enter your answer 2. Which of these gives the highest effective rate of interest? - 16.35% compounded twice every month - 17.45% compounded every 4 months - 15.85% compounded monthly - 16.95% compounded bi-monthly Enter your answer 3. Find how many times does 8.50% yields a 8.85% is compounded annually.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Engineering Fundamentals: An Introduction to Engi...Civil EngineeringISBN:9781305084766Author:Saeed MoaveniPublisher:Cengage Learning
Engineering Fundamentals: An Introduction to Engi...
Civil Engineering
ISBN:9781305084766
Author:Saeed Moaveni
Publisher:Cengage Learning