Question
In: Finance
Consider the investment projects given in Table P7.19. Assume that MARR = 13% in the following...
Consider the investment projects given in Table P7.19.
Assume that MARR = 13% in the following questions:
(a) Identify the i*('s) for each investment. If the project has more than one i*, identify all of them.
(b) Which project(s) is(are) a mixed investment?
(c) Compute the IRR for each project.
(d) Determine the acceptability of each project.
Table P.719
| n | Project 1 | Project 2 | Project 3 |
| 0 | -$8,500 | -$5,000 | -$1,500 |
| 1 | 10,000 | 10,000 | 6,000 |
| 2 | 10,000 | 30,000 | -6,000 |
| 3 | 0 | -40,000 | 0 |
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Consider two mutually exclusive investment projects, each with MARR = 8% as shown in figure A.On...
Consider two mutually exclusive investment projects, each with
MARR = 8% as shown in figure A.On the basis of the IRR criterion,
which alternative would be selected? B. Determine the discounted
payback period for each project.
Project's Cash Flow
n
A
B
0
-$20,000
-$25,000
1
$6,000
$10,000
2
$2,000
$3,000
3
$11,000
$8,000
4
$4,000
$2,000
5
$5,000
6
$11,000
7
$2,000
Consider two mutually exclusive investment projects, each with MARR = 8% as shown in figure A.On...
Consider two mutually
exclusive investment projects, each with MARR = 8% as shown in
figure
A.On the basis of the
IRR criterion, which alternative would be selected?
B. Determine the
discounted payback period for each project.
Project's Cash Flow
n
A
B
0
-$20,000
-$25,000
1
$6,000
$10,000
2
$2,000
$3,000
3
$11,000
$8,000
4
$4,000
$2,000
5
$5,000
6
$11,000
7
$2,000
Consider two mutually exclusive investment projects, each with MARR = 8% as shown in figure A.On...
Consider two mutually exclusive investment projects, each with
MARR = 8% as shown in figure
A.On the basis of the IRR criterion, which alternative would be
selected?
B. Determine the discounted payback period for each project.
Project's Cash Flow
n
A
B
0
-$20,000
-$25,000
1
$6,000
$10,000
2
$2,000
$3,000
3
$11,000
$8,000
4
$4,000
$2,000
5
$5,000
6
$11,000
7
$2,000
Consider the mutually exclusive alternatives given in the table below. MARR is 5 % per year....
Consider the mutually exclusive alternatives given in the table
below. MARR is 5 % per year. Assuming repeatability, what is the
equivalent annual worth of the most profitable alternative? (Do not
enter the dollar sign $ with your answer.)
_____________________________________________________________
X Y Z
_____________________________________________________________
Capital
investment $50,000
$25,000
$40,000
Annual
savings $15,000
$8,000
$12,000
Useful
life
(years) 10 15
20
_____________________________________________________________________________
If we are given the following investment opportunities, which is preferred at a MARR of 10%?...
If we are given the
following investment opportunities, which is preferred at a MARR of
10%? Be sure to use both IRR and incremental analysis.
Alternative
Investment A
Investment B
Investment C
Investment D
Initial Investment
$4,000
$15,000
$5,000
$19,000
Year 1 cash flow
0
0
0
0
Year 2 cash flow
$9,500
$22,100
$4,100
$25,700
1. Consider the investment projects given in the table below. Net Cash Flow of Project Year...
1. Consider the
investment projects given in the table below.
Net Cash Flow of Project
Year
A
B
C
0
($1,500)
($5,000)
($2,200)
1
$700
$3,000
$1,600
2
$2,500
$4,500
$2,600
a. Compute the IRR for each
project.
b. On the basis of IRR
criteria, if all three projects are mutually exclusive
investments, which project
should be selected at 15% MARR?
c. Create a set of decision
statements for varying MARR from 0% to 60%.
(Do
not provide statements...
Assume the following 2 projects and MARR, and that you can select only one of them....
Assume the following 2 projects and
MARR, and that you can select only one of them.
NCF per year
0
1
2
3
4
5
Project X
-120,000
40,000
48,000
56,000
64,000
72,000
Project Z
-145,000
40,000
48,000
57,600
80,000
96,000
MARR
10%
Fully describe the concept of Net Cash Flow per year, and why
there is a “year zero” in the timeline.
Describe the concept of Minimum Acceptable Rate of Return.
Describe the concept of Net Present Value.
Describe...
Given the following 4 alternatives, the best alternative using the incremental ROR analysis at MARR= 13%...
Given the following 4 alternatives, the best alternative using
the incremental ROR analysis at MARR= 13% is:
Dealer
1
2
3
4
First Cost, $
-5,000
-6,500
-10,000
-15,000
Annual Average Cost per repair, $
-3500
-3200
-3000
-2000
Close-out value, $
+500
+900
+700
+1000
Life, years
8
8
8
8
Group of answer choices
Alt. 1
Alt. 2
Alt. 3
Alt. 4
choosing between two projects. The cash flows for the projects are given in the following table...
choosing between two projects. The cash flows for the projects
are given in the following table ($ million):
Project Year 0 Year 1 Year 2 Year 3 Year 4
A negative $ 48
−$48 $ 24
$24 $ 21
$21 $ 19
$19 $ 15
$15
B negative $ 102
−$102 $ 20
$20 $ 41
$41 $ 48
$48 $ 58
$58
a. What are the IRRs of the two projects?
b. If your discount rate is
4.7 %...
Q3- For two mutually exclusive projects, the cash flows are given. If MARR is 10%, which...
Q3- For two mutually exclusive projects, the cash flows are
given. If MARR is 10%, which project should we select? please show
all steps and all work
N(year)
P1
P2
0
-$3000
-$12000
1
$1350
4200
2
1800
6225
3
1500
6330
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