Q: then the present value factor of the lumpsum is:
A: Time value of money (TVM) is used to measure the value of money at different point of time in the…
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A:
Q: future
A: Introduction: The term future value refers to the sum of money that would be earned after the end of…
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A: The worth of a present asset at a future date based on an expected rate of growth is known as future…
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A: Honor code: Since you have posted a question with multiple sub-parts, we will solve the first three…
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A: “Since you have posted multiple questions, we will solve first question for you. If you want any…
Q: what is its present value? Its future value?
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A:
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A: Present value of money: The money having today has more value than future receivable.
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A: Future Value = Present Value ( 1 + r )n
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A: In the given question we require to calculate the present value of the stream of cashflows.
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A: Note: As per our guidelines, we can only solve three subparts at once. We will answer the first…
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A: Therefore, the present worth is $57,595.10.
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A: Given: Real interest rate = 2% Default risk premium = 3% Liquidity risk premium = 1%
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A: “Hey, since your question has multiple sub-parts, we will solve first three sub-parts for you. If…
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A: given, pv = $10,000 r= 0.2% n = 8 years = 8 x 12 = 96 months
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A: Present value = Future value/(1+pir)^n Where N = number of periods = 18 years Pir = periodic…
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A: Formulas:
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- Compare the projects below using future worth analysis at i=16% per year. Apply LCM method, Write formula, use compound interest table for extracting factors, show your calculation step by step, and find final result. Draw cash flow diagram for both projects Project 1 Project 2 First cost Annual operating cost Salvage value Life, years -9000 -8000 -800 -800 700 1000 5 101. Compare the following alternatives using the Net Present Worth (NPW) method. Rate 5% per year. Construction $ Benefits $/yr Life years A 400,000 200,000 5 700,000 220,000 10 2. Solve the same problem using the Net Equivalent Uniform Annual (NEUA) method. What do you conclude?Calculate Net Present Value of minitor that costs $ 35,000.00 Amortization period 5 years with savings of 8000 per year with a hurdle rate of 12%, 5%. Which investment is more attractive?
- Compare the alternatives shown below on the basis of their present worth, using an interest rate of 18% per year. Highlight the best option. Alternative L M N Initial costs $238,000 $213,000 $253,000 Annual revenues $69,000 in year 1,increasing by $190each year $60,000 $69,000in years 1 to 5,$69,570in years 6 to 16 Life, years 16 16 16Evaluate the following using the present worth comparison method. Use an annual interest rate of 10% and a period of 20 years for both cases. a) An initial cost of $87,000,000 investment with a first-year operation and maintenance (O&M) cost at $2,000,000, increasing by $250,000 annually. The expected revenue in the first year is $6,900,000, increasing by 8% annually. b) An initial cost of $101,000,000 investment with a first-year operation and maintenance (O&M) cost at $2,300,000, increasing by $300,000 annually. The expected revenue in the first year is $8,800,000, increasing by 8% annually. c) Which option is better?Alternative B may be replaced with an identical item every 20 years at the same cost and annual benefit. Using a 9% interest rate and an annual cash flow analysis, which alternative should be selected? Cost Uniform annual benefit Useful life, in years A $100,000 30,000 B $150,000 45,000 20
- Given the financial data for three mutually exclusive alternatives in the table below, determine the best alternative using the annual cash flow analysis for a interest rate of 8% per year. A B c First cost $45,000 $25.000 $20,000 O &M Cost/ year 10,000 4,000 1,900 Benefit/year 18,000 13,000 9,000 Salvage value 3,000 6,000 4,600 Life in years 5 for all 3 alternativesAn investment of P100,000 is expected to yield a regular annual net income of P25,000 per year for 10 years. Determine the conventional benefit cost ratio using present worth with an interest rate of 10%? ANSWER: Blank 1 Blank 1 Add your answerTwo mutually exclusive alternatives are being considered. Both have lives of ten years. Alternative A has a first cost of $10,000 and an annual benefit of $4500. Alternative B costs $15,000 and has annual benefits of $8800. 7-65 If the MARR is 6%, which alternative should be selected? Solve the problem by: (a) Present worth analysis (b) Annual cash flow analysis (c) Rate of return analysis
- A Three-year project with Initial investment: $1,000 Interest rate: 10% The 1st year cash flow: $700 The 2nd year cash flow: $900 Question: Which of the following is the NPV of this two-year project? What is the payback period for this project? The profitability index (PI) will be approximately calculated as ________ (Show and label all calculations.)A project has an initial cost of $18,400 and expected cash inflows of $7,200, $8,900, and $7,500 over Years 1 to 3, respectively. What is the discounted payback period if the required rate of return is 11.2%? Select one: A. 2.57 years B. Never C. 2.45 years D. 2.87 years E. 2.31 yearsConsider alternatives A and B as shown below. The interest rate is 9%. For parts a) and b), let X = $250. For parts a) and b), which alternative is preferred: a) by equivalent annual worth analysis? b) by payback period? c) Compute the value of X that makes the two alternatives equally desirable. Initial cost Uniform annual benefit Salvage value Useful life, in years A $500 200 100 5 B $900 X 120 5