A firm is considering the following two mutually exclusive alternatives as a part of a production improvement program as follows: If MARR = 10%, compare the alternatives, and select the best one. A B Capital investment $25,000 $32,000 AOC $230 $200 Annual Taxes $120 $130 Annual revenues $ 4000 for the first 6 years and $5800 (from year 7 thereafter) $6500 Salvage value $2500 Useful Life 30 Infinity
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- A firm evaluates all of its projects by applying the IRR rule. If the required return is 14 percent, should the firm accept the following project? Input area: Required Return Year 0 Year 1 Year 2 Year 3 (Use cells A6 to B10 from the given information to complete this question.) Output area: 14% ($41,000) $20,000 $23,000 $14,000 IRRAn interior design studio is trying to choose between the following two mutually exclusive design projects: Year 0 1 2 3 Cash Flow Cash Flow (0) -$64,000 31,000 31,000 31,000 a-1 If the required return is 10 percent, what is the profitability index for both projects? (Round your answers to 3 decimal places. (e.g., 32.161)) Project I Project II -$18,000 9,700 9,700 9,700 Profitability Index a-2 If the company applies the profitability index decision rule, which project should the firm accept? O Project I O Project II Project I Project II b-1 What is the NPV for both projects? (Round your answers to 2 decimal places. (e.g., 32.16)) O Project I Project II NPV b-2lf the company applies the NPV decision rule, which project should it take?Connor Corporation is considering two projects (see below). For your analysis, ass rate of return of 10%. Based on your analysis, which is the best choice? Initial Investment Cash Flow Year 1 PV NPV Profitability Index IRR Project A -465,000 510,000 463,636.364 ($1,363.64) $1.00 ANSWER 10% Project B -700,000 You can change the i 850,000 772,727.273
- Hello, can you please answer this problem with excel and formulas, thank you! Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has historically used a three-year cutoff for projects. The required return is 10 percent. Year Project F Project G 0 –$135,000 –$205,000 1 60,000 40,000 2 50,000 55,000 3 60,000 90,000 4 55,000 120,000 5 50,000 135,000 a. Calculate the payback period whitout PV for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 8,732.16) b. Calculate the NPV for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 8,732.16)c. Which project, if any, should the company accept? just write the letter.A company is considering two projects. The discount rate is 10 percent, and the projects' cash flows would be: 01 2 3 Years Project A -$700 $500 $300 $100 Project B -$700 $100 | $300 $600 a. Calculate the projects’ NPVS. b. If the two projects are independent, which project(s) should be chosen? c. If the two projects are mutually exclusive, which project should-be chosen?Two mutually exclusive investment altematives for implementing an office automation plan in an engineering design firm are being considered. If the firm's MARR is 10% per year, which alternative should be selected? Compare the altematives shown below on the basis of Incremental Analysis. Investment A Investment B Capital Investment, S 920,000 660,000 Annual Expenses, S/ yr. 167,000 133,000 Salvage value, S 410,000 330,000 Life, years 10 10 Determine IRR on incremental analysis, using 7% and 13% rates. Oa.86% Ob 11.1% 10.9% Od.95%
- A company is considering two projects. The discount rate is 10 percent, and the projects’ cash flows would be: Years 0 1 2 3 Project A -$700 $500 $300 $100 Project B -$700 $100 $300 $600 Calculate the projects’ NPVs and IRRs. Project (A): NPV= =777.61-700=77.61 IRR= =18.005% Project (B): NPV= =789.63-700=89.63 IRR= =15.559% If the two projects are independent, which project(s) should be chosen? If the two projects are mutually exclusive, which project should be chosen?Of the following mutually exclusive alternatives, select the best one by rate-of-return analysis method, if the MARR is 10% per year and the projects have a useful life of 15 years. Make individual investment and extraordinary investment analysis. Would appreciate if Excel is not used! 1 2 3 4 5 6 7 250,000 Initial inversion $ Annual maintenance cost. S 190,000 240,000 265,000 255,000 240,000 265,000 15,000 16,000 14,000 17,000 18,000 13,000 12,000 Annual Income $ 52,000 49,000 68,000 50,000 81,000 77,000 45,000Consider the following Table: 1. Draw the chash flow diagrams for (A, B and C) alternatives 2.Compare (A, B and C) alternatives and choose the best one
- Compute the IRR, NPV, Pi, and payback period for the following two projects. Assume the required return is 10%. Year Project A Project B 0 $-200 $-150 1 $200 $50 2 $800 $100 3 $-800 $150 Please show inputs from the BAII Plus Financial calculator of how to get these answersCoore Manufacturing has the following two possible projects. The required return is 12 percent. Year Project Y Project Z 0 -$27,500 -$55,000 1 13,500 19,500 234 2 11,900 26,000 3 14,300 17,500 9,900 24,000 a. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. Which, if either, of the projects should the company accept? a. Project Y Project Z 1.38 ง b. Project Y 3 decimal places required. Project Z c. Accept project xA company is considering two projects. The discount rate is 10 percent, and the projects' cash flows would be: Years 1 3 Project A -$700 $500| $300 $100 Project B -$700 $100| $300 $600 a. Calculate the projects' NPVS and IRRS. b. If the two projects are independent, which project(s) should be chosen? с. If the two projects are mutually exclusive, which project should be chosen?