Question
In: Finance
Mars Engineering Industries must choose between a gas-powered and an electric- powered generator for their factory....
Mars Engineering Industries must choose between a gas-powered
and an electric-
powered generator for their factory. Both generators perform the
same function. The
electric-powered generator will cost $20,000 and the gas-powered
generator will cost
$16,500. The life of each type of generator is estimated to be 5
years during which
time the net cash flow per year for gas-powered generator will be
$5,000 and that for
electric-powered generator will be $6,500. The cost of capital for
Mars is 13%.
Calculate IRR and MIRR for each generator and decide which to
recommend.
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in its factory.
Problem 10-9NPVs and IRRs for Mutually Exclusive ProjectsDavis Industries must choose between a gas-powered and an
electric-powered forklift truck for moving materials in its
factory. Since both forklifts perform the same function, the firm
will choose only one. (They are mutually exclusive investments.)
The electric-powered truck will cost more, but it will be less
expensive to operate; it will cost $21,000, whereas the gas-powered
truck will cost $17,230. The cost of capital that applies to both
investments is 11%. The...
Davis Industries must choose between a gas powered or an electric powered forklift truck for moving...
Davis Industries must choose between a gas powered or an
electric powered forklift truck for moving materials in its
factory. The electric powered truck will cost more, but it will be
less expensive to operate; it will cost $22,000 whereas the gas
powered will cost $17,500. The cost of capital is 12%. The life of
both trucks is expected to be six years. The net cash inflows for
the electric powered truck will be $6,290 per year and those for...
Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in...
Davis Industries must choose between a gas-powered and an
electric-powered forklift truck for moving materials in its
factory. Because both forklifts perform the same function, the firm
will choose only one. (They are mutually exclusive investments.)
The electric-powered truck will cost more, but it will be less
expensive to operate; it will cost $21,000, whereas the gas-powered
truck will cost $17,230. The cost of capital that applies to both
investments is 11%. The life for both types of truck is...
Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in...
Davis Industries must choose between a gas-powered and an
electric-powered forklift truck for moving materials in its
factory. Because both forklifts perform the same function, the firm
will choose only one. (They are mutually exclusive investments.)
The electric-powered truck will cost more, but it will be less
expensive to operate; it will cost $21,500, whereas the gas-powered
truck will cost $17,960. The cost of capital that applies to both
investments is 13%. The life for both types of truck is...
Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in...
Davis Industries must choose between a gas-powered and an
electric-powered forklift truck for moving materials in its
factory. Because both forklifts perform the same function, the firm
will choose only one. (They are mutually exclusive investments.)
The electric-powered truck will cost more, but it will be less
expensive to operate, it will cost $22,000, whereas the gas-powered
truck will cost $17,500. The cost of capital that applies to both
investments is 15%. The life cycle for both types of truck...
PLEASE COMPLETE IN EXCEL Davis Industries must choose between a gas-powered and an electric-powered forklift...
PLEASE COMPLETE IN EXCEL
Davis Industries must
choose between a gas-powered and an electric-powered forklift truck
for moving materials in its factory. Because both forklifts perform
the same function, the firm will choose only one. (They are
mutually exclusive investments.) The electric-powered truck will
cost more, but it will be less expensive to operate, it will cost
$23,000, whereas the gas-powered truck will cost $14,500. The cost
of capital that applies to both investments is 13%. The life cycle...
Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in...
Davis Industries must choose between a gas-powered and an
electric-powered forklift truck for moving materials in its
factory. Because both forklifts perform the same function, the firm
will choose only one. (They are mutually exclusive investments.)
The electric-powered truck will cost more, but it will be less
expensive to operate; it will cost $21,500, whereas the gas-powered
truck will cost $17,960. The cost of capital that applies to both
investments is 13%. The life for both types of truck is...
Dev Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in...
Dev Industries must choose between a gas-powered and an
electric-powered forklift truck for moving materials in its
factory. Because both forklifts perform the same function, the firm
will choose only one. (They are mutually exclusive investments.)
The electric-powered truck will cost more, but it will be less
expensive to operate; it will cost $21,000, whereas the gas-powered
truck will cost $17,230. The cost of capital that applies to both
investments is 11%. The life for both types of truck is...
Marvin Industries must choose between an electric-powered and a coal-powered forklift machine for its factory. Because...
Marvin Industries must choose between an electric-powered and a
coal-powered forklift machine for its factory. Because both
machines perform the same function, the firm will choose only one.
(They are mutually exclusive investments.) The electric-powered
machine will cost more, but it will be less expensive to operate;
it will cost $102,000, whereas the coal-powered machine will cost
$69,500. The cost of capital that applies to both investments is
10%. The life for both types of machines is estimated to be...
Marvin Industries must choose between an electric-powered and a coal-powered forklift machine for its factory. Because...
Marvin Industries must choose between an electric-powered and a
coal-powered forklift machine for its factory. Because both
machines perform the same function, the firm will choose only one.
(They are mutually exclusive investments.) The electric-powered
machine will cost more, but it will be less expensive to operate;
it will cost $102,000, whereas the coal-powered machine will cost
$69,500. The cost of capital that applies to both investments is
10%. The life for both types of machines is estimated to be...
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