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- 2-17 Consider the accompanying breakeven graph for an investment, and answer the following questions. $40 $35 $30 Total Revenue $25 $20- Total Cost $15 $10 -- $5 $0 0. 250 500 750 1000 1250 1500 1750 Output (units/year) (a) Give the equation for total revenue for x units per year. (b) Give the equation for total costs for x units per year. (c) What is the "breakeven" level of x? :11 ou hove a Dollars (X104)Which projects are worth funding if the market interest rate is 8%? Project Cash Cash inflows Annualiz (productivity of the investment) outflows ed rate of (amount you'd need to borrow) $250,000 today $50,000 return $25,000 per year for 15 years A 2.74% $11,000 per year for 5 years 1.92% today $100,000 $60,000 per year C 9.54% today for 2 years $800,000 today $84,000 per year D 0.49% for 10 years C В A B2- Find Profit for the project, which its cash flow is shown below 95 x 10° L 700,000 U دفعات شهرية 0 0 0 0,0 50 1 2 3 4 $ 8 9 10 11 12 13 14 15 16 150 x 10° U دفعات سنوية 1050 1x 1 x 10° U i=15%
- A start up business is considering two types of equipment - data are as follows: TYPE A TYPE B First Cost P200,000.00 P300,000.00 Annual operating cost 32,000.00 24,000.00 Annual labor cost 50,000.00 32,000.00 Insurance and property taxes 3% 3% Payroll taxes 4% 4% Estimated life 10 10 The minimum required rate of return is 15%. What is the exact rate of return? ANSWER: Blank 1 Blank 1 Add your answerYou are given the cash flow series for two projects, Alt. A and Alt. B. YEAR 1 2 3 4 5 6 Alt. A - F1 X X X + S1 Alt. B - F2 Y Y Y Y Y Y + S2 Assume that F2 > F1, and X, Y, S1, and S2 are positive; the incremental rate of return (i*) on the additional investment in Alt. B can be calculated with the following expression: = - = - = - · F2 + Y (P/A, i*, 6) + S2(P/F, i*, 6) (F2 F1) + (Y - X)(P/A, i*, 5) + (S2 - S1)(P/F, i*, 6) (F2 F1)(F/P, i*, 6) + (Y - X)(F/A, i*, 6) + (S2 - S1) (F2 F1)+(Y - X) + (Y + S2) - (X + S1) 0 = (F1 F2)(F/P, i*, 6) + (X - Y)(F/A, i*, 6) + (S2-S1) == 0 = F1 + X(P/A, i*, 6) + S1(P/F, i*, 6) 0F2+Y(P/A, i*, 6) + S2(P/F, i*, 6) 0 = - 0 = - F1 + X(P/A, i*, 5) + S1(P/F, i*, 6) F2+ Y(P/A, i*, 5) + S2(P/F, i*, 6)A company that makes clutch disks for race cars has the annual net cash flows shown for one department. Year NCF, $1000 0 −65 1 30 2 84 3 −10 4 −12 (a) Determine the number of positive roots to the rate of return relation. (b) Calculate the internal rate of return. Is there a negative root? How is it treated? (c) Calculate the external rate of return using the return on invested capital (ROIC) approach with an investment rate of 15% per year (as assigned by your instructor, solve by hand and/or spreadsheet).
- The following table shows the past profits of Company X that has just come for sale to the public this month: Year Profit (in thousands $) 2018 140 2017 130 2016 110 2015 120 2014 100 9. If the investment is held at perpetuity, the PV is: a) 1,000 b) 500 c) 800 d) 700A 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 pumpingEconomics Four projects are given in the table below. Assume MARR = 12% and n = 8 for all projects shown. A C D Investment 7500 8000 5800 5000 Annual Return 1500 1700 1200 1000 Salvage Value 1000 1500 1500 1200 a. What is the PW of Project B? Round to the nearest integer. b. In what order should you compare the alternatives? c. Calculate the value for IRR(A-C). Round your answer to the nearest percentage. d. Which of the projects are defenders at some point in determining the project to pursue? e. Which project do you recommend pursuing?
- You have collected EV, AC, and PV data from your project for a five-month period. Complete the table. Calculate SPIC and CPIC. Compare the cost and schedule performance for the project on a month-by-month basis and cumulatively. How would you assess the performance of the project? (All values are in thousands $) EV EVC AC ACC PV PVC SPI SPIC CPI CPIC April 8 10 7 May 17 18 16 June 25 27 23 July 15 18 15 August 7 9 8A start up business is considering two types of equipment - data are as follows: TYPE A ΤΥΡE Β First Cost P200,000.00 P300,000.00 Annual operating cost 32,000.00 24,000.00 Annual labor cost 50,000.00 32,000.00 Insurance and property taxes 3% 3% Payroll taxes 4% 4% Estimated life 10 10 The minimum required rate of return is 15%. Using present worth cost method, determine the value of alternative A and alternative B: ANSWER for ALTERNATIVE A: Blank 1 ANSWER for ALTERNATIVE B: Blank 2 Blank 1 Add your answer Blank 2 Add your answerPART 2 - C PROBLEM SOLVING PROBLEM NO.1 Compute the PW: $3500 market value productivity attributable to equipment per year (Operating costs have already been deducted fron the revenue) $8500 $8500 $8500 $8500 $8500 1 2 3 End of Year i= 18%/yr $23500 investment cost 5.