3) Consider the cash flows for the two alternatives assuming Interest rate 10% A B $2500.00 5000.00 1 $1000.00 1800.00 2 1800.00 1800.00 3 1000.00 2000.00 400.00 2000.00 Suppose that project A and B are mutually exclusive which project would you select based on: Future worth analysis.
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Use the future worth formula please!!!
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- You are the boss of a consulting firm. One of your clients has brought to you a new project. The client s asking for an initial investment of $35,000. The project will return $5,000 for the next 4 years. If the company has a MARR set at 12%, what method would you use to evaluate this project? O Present Worth Method O Annual Worth Method O Future Worth Method O Internal Return Rate O External Return Rate question 2 you are a consultant at Brinkley & co .you are responsible for evaluating projects introduced by surrounding engineering firms. the current project you are evaluating requires an initial investment of $35,000 and that returns $5000 for the next 1O years. if the MARR is 12% what is this a good investment?You are the boss of a consulting firm. One of your clients has brought to you a new project. The client s asking for an initial investment of $35,000. The project will return $5,000 for the next 4 years. If the company has a MARR set at 12%, what method would you use to evaluate this project? O Present Worth Method O Annual Worth Method O Future Worth Method O Internal Return Rate O External Return RateThe present worth of an alternative is zero. What do we know about the value of the future worth? Select one: a. FW = zero b. Cannot be determined without cash flows c. FW is greater than zero d. FW is less than zero
- The city of St. John's is intalling a new swimming pool in the east end recreation centre. One design being considered is a reinforced concrete pool that will cost $5,400,000 to install. Thereafter, the inner surface of the pool will need to be refinished and painted every 5 years at a cost of $440,000 per refinishing. Assuming that the pool will have essentially an infinite life, what is the present worth of the costs associated with the pool design? The city uses a MARR of 10%. If the installation costs, refinishing costs, and MARR are subject to 5% or 10% increases or decreases, how is the present worth affected? (NOTE: Text answers are case sensitive and every field in this question is worth equal value) All calculations are performed using 4 significant figures. (a) Complete the table below: Sensitivity Analysis Calculated Values Parameter Construction Costs Refinishing Costs MARR [%] -10% -5% Base Case 5,400,000 440,000 10 +5% +10%Eddie’s Precision Machine Shop is insured for $700,000. The present yearly insurance premium is $1.00 per $100 of coverage. A sprinkler system with an estimated life of 20 years and no salvage value can be installed for $20,000. Annual maintenance costs for the sprinkler system are $400. Ifthe sprinkler system is installed, the system must be included in the shop’svalue for insurance purposes but the insurance premium will reduce to $0.40 per $100 of coverage. Eddie uses a MARR of 15%/yr. Solve, a. What is the internal rate of return of this investment? b. What is the decision rule for judging the attractiveness of investments based on internal rate of return? c. Is the sprinkler system economically justified?K Most likely estimates for a project are as follows. MARR Useful life Initial investment Receipts - Expenses (R-E) Determine whether the statement "This project (based upon the most likely estimates) is profitable." is true or false. 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 15per year. Choose the correct choice below. False True 15% per year 4 years $3,500 $1,600/year TUB
- a company is considering the purchase of a new Lathe, where there are 3 alternative Lathes with brands D, E and F with economic value for each Lathe as follows; Lathe Machine D Lathe Machine E Lathe Machine F Initial Cost (Million Rp) 530 540 480 Maintenance Cost (MillionRp) 90 80 100 Residual Value (Million Rp) 60 130 80 Operating Life 10 10 10 Question: Do a Present Worth Analysis to be able to determine the Alternative chosen from the three Generators with MARR = 13%?Question 4 A local company is considering in investing in new, more productive equipment Data concerning the three best aternatives are show below. The useful life of the equipment is 20 years and MARR =9K What is the incremental return on the first incremental pair (ahen andered by increasing investment) RRI Ars What is the incremental IRR on the second pair? Ars Which alternative would you select? Ans. X B C Initial S66.000.00 $55,000.00 $23.500.00 $17,32000 investment $7.830.00 Annual net $6.093.00 $3.177.00 $165300 income Salvage value $4.500.00 $3.23200 $1.73a0 1237% S8.230.00 10.40% 7.465 9.35% IRRQuestion 3 A project with the following costs are under consideration to determine its profitability. Using the IRR comparison, and an annual MARR of 10% compounded semiannually, determine if the project should be executed First cost $45,000 Semiannual operating cost $10,000 Semiannual income $20,000 Salvage value $20,000 Life in years 4 years Oa. IRR = 17% semiannual Ob. IRR= 18.7% semiannual O IRR = 16.9% semiannual Od. IRR 15.3% semiannual
- Compute for the Annual Worth of MEA1 and explain. Compute using the Annual Worth formula and WITHOUT using Excel sheets. Thank you. MARR = 12%Given cash flows for two alternatives as shown in table below, choose the most attractive alternative if MARR = 8%. Year 0 1 2 3 through ∞ Alt. A -$42K $3.6K $3.6K $3.6K Alt. B -$54K $4.7K $4.7K $4.7K Group of answer choices Alt. A Alt. B Select neither Select eithera. The AW is the value of all cash flows converted to an equivalent uniform annual series of cash flows over a 5-year period b. The AW may provide a different decision than when present worth or future worth is calculated c. The AW will result in the same decision as the present worth or future worth analysis d. The AW is rarely used by individuals to determine the value of their investment portfolio in the future, such as for retirement