Question
In: Economics
Three mutually exclusive projects are being consid ered by Sesame Street Productions (SSP). SSP U a...
Three mutually exclusive projects are being consid ered by Sesame Street Productions (SSP). SSP U a MARR of 8%. SSP has heard about your excellent analysis skills and wants you to help them make a decision. Using a B/C analysis, which project do you recommend to SSP? Assume all benefits and costs repeat for Project A.
Project A $300 Initial cost Annual benefits $200 Project life (years) 2 B/C ratio 1.19
Project B $450 Initial cost Annual benefits $190 Project life (years) 4 B/C ratio 1.40
Project C $765 Initial cost ,Annual benefits $300 Project life (years) 4 B/C ratio 1.3
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
1. Three mutually exclusive projects are being considered. The cash flows for each and corresponding rate...
1. Three mutually exclusive projects are being considered. The
cash flows for each and corresponding rate of return are list
below. MARR = 8% can any project eliminated? Using functional
notation to solve for the incremental rate of return.
1
2
3
0
-20000
-25000
-29000
1
2000
2500
3000
2
5000
6200
7000
3
8000
9900
11000
4
11000
13600
15000
ROR
9%
8.7%
7.4%
2. Which project must you choose based on the information provided
below using conventional...
Three mutually exclusive earth-moving pieces of equipment are being considered for several large building projects in...
Three mutually exclusive earth-moving pieces of equipment are
being considered for several large building projects in India over
the next five years. The estimated cash flows for each alternative
are given below. The construction company's MARR is 18% per year.
Which of the three alternatives, if any, should be adopted?
Assume repeatability is appropriate for this comparison.
Caterpillar
Deere
Case
Capital investment
$22,000
$26,400
$17,500
Net annual revenue
$6,500
$9,000
$5,200
Salvage value
$4,500
$5,000
$3,750
Useful life
4 years...
Three mutually exclusive projects are being considered: A B C First cost $1000 $2000 $3000 Uniform...
Three mutually exclusive projects are being considered:
A
B
C
First cost
$1000
$2000
$3000
Uniform annual benefit
250
350
525
Salvage value
200
300
400
Useful life (years)
5
6
7
Assume identical replacements.
(b)If 8% is the desired rate of return, which project
should be selected?
Explain why, if two mutually exclusive projects are being compared, the project that generates most of...
Explain why, if two mutually exclusive projects are being
compared, the project that generates most of its cash flows in the
beginning of its life might have the higher ranking under the NV
criterion if the required rate of return is high, whereas the
project that generates most of its cash flows toward the end of its
life might be deemed better if the required rate of return is low.
Would changes in the firms required rate of return ever...
Two projects being considered by a firm are mutually exclusive and have the following projected cash...
Two projects being considered by a firm are mutually exclusive
and have the following projected cash flows:
Year
Project A
Project B
0
($100,000)
($100,000)
1
39,500
0
2
39,500
0
3
39,500
133,000
Based only on the information
given, which of the two projects would be preferred, and why?
Project A, because it has an even cash inflow stream.
Project B, because it has a higher IRR.
Indifferent, because the projects have equal IRRs.
Include both in the capital...
Two projects being considered by a firm are mutually exclusive and have the following projected cash...
Two projects being considered by a firm are mutually exclusive
and have the following projected cash flows: Project A Project B
Year Cash Flow Cash Flow
Proj A Project B
0 -$300,000 -$300,000
1 145,500 $150,000
2 145,500 -$ 40,000
3 145,500 $370,000
The firm’s cost of capital is 10 percent. Based only on
the information given,
What are the NPV for Project A and B? Which project do you
choose based on the NPV?
What are the payback periods...
There are three mutually exclusive alternatives being considered. One of the three must be selected, so this...
There are three mutually exclusive alternatives being
considered. One of the three must be selected, so this
is a set of three cost alternatives. MARR is 15% and the
life of each project is 12 years. These projects
are:
Project I
Capital Cost: $130,000
Revenue/Savings: 22,000
Expense/Cost: $12,000
Salvage: $25,000
Project II
Capital Cost: $100,000
Revenue/Savings: $10,000
Expense/Cost: $15,000
Salvage: $20,000
Project III
Capital Cost: $160,000
Revenue/Savings: $10,000
Expense/Cost: $20,000
Salvage: $40,000
please solve asap, thank you!
Four mutually exclusive projects are being considered for a new 2-mile jogging track. The life of...
Four mutually exclusive projects are being considered for a new
2-mile jogging track. The life of the track is expected to be 75
years, and the sponsoring agency's MARR is 9% 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
B
C
D
Initial cost
$54,000
$55,000
$62,000
$145,000
Annual benefits
$7,000
$8,500
$10,000
$19,000
B-C...
Two projects being considered are mutually exclusive and have the following cash flows: Year Project A...
Two projects being considered are mutually exclusive and have
the following cash flows:
Year
Project A
Project B
0
-$50,000
-$50,000
1
15,000
0
2
15,000
0
3
15,000
0
4
15,000
0
5
15,000
90,000
1) Calculate NPV of each project if
the required rate of return on these projects is 8 percent.
2) which would be chosen and why?
You are considering the following three projects. A & B are mutually exclusive while C is...
You are considering the following three projects. A
& B are mutually exclusive while C is independent.
Question: On one graph, plot the NPV profile
for Both projects, A&B.
please show how on excel
Following are their expected cash flows
year
project A
Project B
Project C
0
-60,000.00
-40,000.00
-20,000.00
1
0
40,000.00
35,000.00
2
82,000.00
40,000.00
30,000.00
3
60,000.00
20,000.00
2,000.00
4
20,000.00
10,000.00
-40,000.00
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