! Required information A government-funded wind-based electric power generation company in the southern part of the country has developed the following estimates (in $1000) for a new turbine farm. The MARR is 10% per year and the project life is 25 years. Benefits: $45,000 in year 0; $27,000 in year 6 Government savings: $2,000 in years 1 through 20 Cost: $48,000 in year O Disbenefits: $3000 in years 1 through 10 NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. Calculate the conventional B/C ratio. The conventional B/C ratio is

! Required information A government-funded wind-based electric power generation company in the southern part of the country has developed the following estimates (in $1000) for a new turbine farm. The MARR is 10% per year and the project life is 25 years. Benefits: $45,000 in year 0; $27,000 in year 6 Government savings: $2,000 in years 1 through 20 Cost: $48,000 in year O Disbenefits: $3000 in years 1 through 10 NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. Calculate the conventional B/C ratio. The conventional B/C ratio is

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 17EA: Gardner Denver Company is considering the purchase of a new piece of factory equipment that will...

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Required information (The following information applies to the questions displayed below] A local farming company is considering an investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 14%. The project would provide net operating Income in each of five years as follows: Sales Variable expenses $2,867,000 1,125,000 Contribution margin 1,742,000 Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation $706,000 571,000 Total fixed expenses Net operating income 1,277,000 $ 465,000 Click here to view Exhibit 148-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using table. What is the present value of the project's annual net cash inflows? (Round your final answer to the nearest whole dollar amount.) Present value
Required information A government-funded wind-based electric power generation company in the southern part of the country has developed the following estimates (in $1000) for a new turbine farm. The MARR is 10% per year and the project life is 25 years. Benefits: $45,000 in year 0; $31,000 in year 4 Government savings: $2,000 in years 1 through 20 Cost: $64,000 in year O Disbenefits: $3000 in years 1 through 10 NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. Calculate the Pl value. The Pl value is 1.025
iNFLATION An engineering project team., expects to receive $70,000 each year for 5 years from the sale of its newest design, OnGuard. There will be an initial investment in new equipment of $160,000. The expenses of manufacturing and selling the design will be $17,500 per year. Straight-Line Depreciation is to be used with $5,000Salvage Value. Annual income tax rate is at 30%.a. Compute the ATCF for the 5-year period using the tabular method (Show YEAR,BTCF, DEPRECIATION, TAXABLE INCOME, INCOME TAX, ATCF).b. If the MARR for We-Clean-U is 12%, is OnGuard a worthwhile investment?
n: A water system is to be build to serve a newly developed subdivision. This subdivision will use 300,00,000 liters of water per year. the facilities to be installed cost P1,500,000 and it is estimated that the operations and maintenance of the system will cost P70,000 annually. Operating taxes will be P24,000 per year and income taxes will be 25% of the first P100,000.00 net revenue 35% of the net revenue over P100,000.00. The life of the water system properties is 80 years ang 5% sinking fund is to be established for deprecation. at what rate per cu. meter must be the water be sold to return an annual net profit of 6% after income taxes on the original investment?
Saved Required information Pollution control equipment for a pulverized coal cyclone furnace is expected to cost $190,000 two years from now and another $120,000 3 years from now. If Monongahela Power wants to set aside enough money now to cover these costs, how much must be invested at an interest rate of 9% per year compounded weekly? NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. Solve using spreadsheet functions. The spreadsheet function used is PV(0.1731%, 104, -190000) + PV(0.1731%, 156,-120000)✓ The amount that must be invested by Monongahela Power is $
U3 Company Is considering three long-term capital investment proposals. Each Investment has a useful llfe of 5 years. Relevant data on each project are as follows. Project Bono Project Edge Project Clayton Capital investment $169,600 $185,500 $214,000 Annual net income: Year 1 14,840 19,080 28,620 2 14,840 18,020 24,380 3 14,840 16,960 22,260 4 14,840 12,720 13,780 5 14,840 9,540 12,720 Total $74,200 $76,320 $101,760 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) [Use the factor table.] 1) Compute the cash payback period for each project. (Round to two decimals.) 2) Compute the net present value for each project. (Round to nearest dollar.) 3) Compute the annual rate of return for each project. (Round to nearest dollar.)
12. An electric company is considering a proposal to supply power to a small town, Initial capital investment is P18M plus another P25M spread out evenly over a five year period. The project will last for 15years and income generated is expected to be P7.5M per year starting at the end of the fourth year. Determine the feasibility of the proposal using the ERR method with a 14% MARR and a 15% reinvestment rate. (Ans. Proposal is not feasible, 13%)
1. CB Electronix needs to expand its plant. It is considering an alternative plan that will last indefinitely. The MARR is 15%. Please determine the capitalized cost of the alternative. Alternative: Expand by 20 000 square feet First cost = $2 000 000 Annual Maintenance costs = $10 000 per year starting in year 3 Periodic maintenance costs = $15 000 every 15 years, starting in 20 years
4. A city is planning to invest $710,000 for a water treatment plant and need to select projects from the following list. Select any or all of the following independent projects using a MARR of 10% per year (HINT: Calculate PW for all feasible bundles, show PW values for all feasible bundles in the solution and select the bundle). What is the largest PW value? Project Initial Annual cost Salvage Value Life, Investment years 4 A -140,000 -300,000 50,000 45,000 В 90,000 150,000 -10,000 4 -590,000 100,000
Locations under consideration for a border patrol station have their costs estimated by the federal government. Use the B/C ratio method at an interest rate of 8% per year to determine which location to select, if any. Location North N South S Initial Cost. $ 960,000 2,900,000 Annual Cost, $ per Year 480,000 450,000 Disbenefits, $ per Year 70,000 60,000 00 Life, Years 00 The AB/C ratio is Select location (Click to select) v
2. A new electric power generation plant is expected to cost $42,000,000 to complete. The revenues generated by the new plant are expected to be $3,875,000 per year, while operational expenses are estimated to be $2,000,000 per year. The plant will last 40 years, and the electric authority uses a 3% interest rate. Determine if the plant will be able to recover its investment using the following methods: a. IRR (show your solution for interpolation; use 5 decimal places for the interpolation procedure) b. Payback period
Four mutually exclusive projects are being considered for a new 2-mile jogging track. The life of the track is expected to be 85 years, and the sponsoring agency's MARR is 10% per year. Annual benefits to the public have been estimated by an advisory committee and are shown below. Use the B-C method (incrementally) to select the best jogging track. Alternative A C D $150,000 $20,000 $51,000 $56,000 $9,500 $64,000 $10,500 Initial cost Annual benefits $8,000 B-C ratio 1.33 1.57 1.70 1.64 ..... Perform the incremental B-C Analysis. Fill-in the table below. (Round to two decimal places.) Alternative Inc. B-C ratio Is the alternative acceptable? B 1.57 Yes