For the cash flows shown, use an annual worth comparison and an interest rate of 8% per year and detemine which service alternativeshould be selected.BInitial cost, $300000680000Annual cost, S/yearS000030000Annual cost started at year 4, S/year15000Extra cost every 6 years, $40000Salvage value, $50000150000Life, Years8.AW of alternative A is:AW of alternative B is:Which alternative will be selected?

Annual worth is the equivalent & uniform annual value of all the cash flows of an investment.

For the cash flows shown, use an annual worth comparison and an interest rate of 8% per year and deteine which service alternative should be selected. B Initial cost, $ 300000 680000 Annual cost, S/year 50000 30000 Annual cost started at year 4, S/year 15000 Extra cost every 6 years, $ 40000 Salvage value, S 50000 150000 Life, Years 8. 00 AW of alternative A is AW of alternative B is: Which alternative will be selected?

For the cash flows shown, use an annual worth comparison and an interest rate of 8% per year and deteine which service alternative should be selected. B Initial cost, $ 300000 680000 Annual cost, S/year 50000 30000 Annual cost started at year 4, S/year 15000 Extra cost every 6 years, $ 40000 Salvage value, S 50000 150000 Life, Years 8. 00 AW of alternative A is AW of alternative B is: Which alternative will be selected?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The cash flows for four mutually exclusive alternatives are provided in the table below. If the useful life is 10 years for each alternative, find the best alternative using incremental rate of return analysis. MARR = 10% PQRS Initial Cost 19,000 16,000 11,000 8,500 EUAB 3,500 3,100 2,200 1,350 A. Alt. S B. Alt. P C. Alt. Q D. Alt. R
A project has the following cash flows set out below. What is the profitability index of this project if the relevant discount rate is 2 percent? Enter your final answer to two decimal places. Year Cash flow 0 -1,745 1 537 2 2,066 3 3,912
Find the profitability index for Oman Air conditioner Company if the initial investment is 4000 OMR and the cash Inflows are as follows: Year 1 =1350 OMR; Year 2 =1400 OMR; Year 3=1450 OMR and Year 4=1500 OMR. Use discount rate as 5%. Select one: a. None b. 1.69 c. 1.83 d. 1.26 e. 1.48
Find the profitability index for Oman Air conditioner Company if the initial investment is 4000 OMR and the cash Inflows are as follows: Year 1=1350 OMR; Year 2 =1400 OMR; Year 3-1450 OMR and Year 4=1500 OMR. Use discount rate as 5%. Select one:
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For each requirement, change the values of the given information as shown and keep all other original data the same. Then enter your updated final answers for each scenario. Scenario A: Future value to be received $ 10,000 Future date received 3 years Discount Rate 6% 10% 16% Scenario B: Annual Cash Receipt $ 5,000 Number of Years 6 years Discount Rate 6% 10% 16% Scenario C: Discount Rate 8% Investment Project Cash Flow Initial Investment $ (6,500) Year 1 $ 700 Year 2 $ 800 Year 3 $ 1,400 Year 4 $ 3,600 Year 5 $ 6,800 Required: a. A company is expecting to receive a lump sum of money at a future date from now. Using the PV formula in Excel, what is the Present Value of that money at three different rates? (Round your answers to 2 decimal places.)
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