2. 4.2 Calculate the value of X that makes the two alternatives equally desirable if the MARR is 9%. Hint: the two alternatives' NPV should be the same. A B Cost 70000 53000 Uniform Annual Benefit 3200 X Salvage Value 26700 16600 Useful Life, in years 8 7
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- Asume you invest $3,500 today in an iveestment that promises to return $7,700 in exactly 10 years. a. Use the present value technique to estiate the IRR on this investment. b. if a minimum anual return of 9% is required would you recommed this investment.For this question, use the following information: A В D E Initi al Investment -3,300 -6,500 -5,000 -8,000 -4,000 Annual Benefit 700 1,200 900 1,400 850 Salvage Value 100 400 300 1,000 200 Useful life 10 10 10 10 10 IRR 16.85% 13.49% 12.86% 12.67% 17.01% E-A C-A В-А D-A D-B Delta IRR 17.74% 4.63% 9.92% 9.76% 9.47% С-Е В-Е D-E В-С D-C Delta IRR -7.43% 7.50% 8.31% 15.52% 12.38% Which alternate should be selected if MARR is 9% (mutually exclusive)?Fill in the missing values: QP TC TB Tprofit MC MB Mprofit ATC AFC AVC 16 500-50 ΝΑ ΝΑ ΝΑ ΝΑ ΝΑ ΝΑ 16 132 16 16 156 16 186 0 5 6 7 8 16 9 16 272 10 16 332 16 224
- (9) The mangement of Small marketing manager inpoimation Joniable Cost= $ 3/0nit units Der year and BEP( Percent Capacily) Company is thinking g intacoluce a new in a Stale markel ' The produclion mariges and the have agreed on the pollowing quanlitative fixed Cos príce= $6/ ünit biing and plant Capacily=See0 relating to the new Product $ 12.00/ year, こ Find Breakeven' pornts in BEP (quantily), BEVIdoilars) oGraphically and analyticallyAnswwwwerECLO-51 An airways company plans to invest now in order to be able replace aging airorat that wil be deivered 5 years from wo much w th compeny net to t nw the cost of replacing the aging aireraft is S30 million and the companys interest rate i o per yeart O s3.736.500 O 137.365.000 O SIL626.000 sU6.260.000
- It is estimated that a certain piece of equipment can save $22,000 per year in labor and materials costs. The equipment has an expected life of five years and no market value. If the company must earn a 5% annual return o0.such investments, how much could be justified now for the purchase of this piece equipment? 6.A flood control pumping station is being designed. Three possible pumping scheme are proposed and the relevant costs are shown in Table Q 2 What is the most economical range of pumping times in hours'year for each scheme? Figure Q2 shows the frequency of pumping demand. What is the most economical scheme? The cost of capital may be taken as 20%. Table Q 2 Costs of alternative scheme Scheme A в Cost of pumps (RM) Life (years) 120,000 180,000 230,000 15 15 20 5, 000 220,000 5, 500 200 ,000 5, 500 Maintenance per annum (RM) Cost of pipes (RM) Life (years) Cost of pumping (RM/hour) 150, 000 20 20 20 50 80 80 10% 30% 40% 20% 1000 2000 3000 4000 5000 Annual pumping hours Frequency of pumpingEany compay expected s mfacting cet to decee becaue of lcned productivity, howethe able tep lcot tate ofper yea closest to 4. 31 1year 950 cost 17A O 2. 740 770 I ago 630 800 a90/ 920 2.0 O
- 3 Your company plans to raise price on product A by 5% per year. Due to competition, sales volume from product A is expected to decline at 10% per year. Revenue will be $5M for this year. Alternatively, based on the projection from the marketing department, you may reduce the sales volume decline from 10% to 5% if the price is kept unchanged. The product will be discontinued at the end of year 5 for both scenarios. If the firm's TVOM is 10%, Determine the revenue cash flow streams for both alternatives. What is the Excel financial function to compute PW of the revenue streamsE The cot of platiumto be purchased to port August prodction is A S198000 B S200,160 C S19540 D. S39180 E None of the answers are comect4. Consider four mutually exclusive alternatives: Initial Cost, $ A $770.00 Uniform annual benefit, $ per 420.00 year B 1406.30 830.00 с 4 2563.30 1600.00 D 8 0 Useful life, years 2 The analysis period is 8 years. At the end of 2, 4, and 6 years, Alt. A will have an identical replacement. Alternative B will have a single identical replacement at the end of 4 years. Choose the best alternative using incremental ROR analysis with MARR = 7%. 0 0