Question
In: Finance
Determine the breakeven (based on net present worth) initial cost for a project with an interest...
Determine the breakeven (based on net present worth) initial
cost for a project with an interest rate of 6% and a useful life of
14 years with the following data:
Annual Cost (O&M): $7,500/ year with an annual increase of
$800/ year
Annual Revenue = $9,000/ year with an annual increase of $1,000/
year
Salvage Value: $50,000
Solutions
jeff jeffy answered 1 year agoRelated Solutions
A breakeven analysis for net present worth is performed with a MARR of 15% and a...
A breakeven analysis for net present worth is performed with a
MARR of 15% and a useful life of 20 years with the following
data:
Initial Cost: $750,000
Annual Cost (O&M): $60,000/ year with an annual increase of
$5,000 each year
Annual Revenue: $80,000/ year with an annual increase of $1,000
each year
Salvage Value: $475,000
Determine the following:
a. If the project is viable (i.e. if the profit is larger than the
cost using net present worth).
b. The...
Find the net present value of a project with initial cost of $5,876,000 and produces the...
Find the net present value of a project with initial cost of
$5,876,000 and produces the following cash flows: $3,200,000 at the
end of year 1; $2,973,000 at the end of year 2; and $2,525,000 at
the end of year 3. The required rate of return for the project is
15 percent.
A.
$814,852
B.
$1,634,917
C.
$723,100
D.
$487,286
A project costs $4,769,500 initially and produces the following
cash flows: $1,000,000 at the end of year 1; $1,500,000 at...
Find the present worth of the following project, using i = 10%/year. Cash Flows Initial cost...
Find the present worth of the following project, using i =
10%/year.
Cash Flows
Initial cost $20000
Annual benefit for years 1 ~ 10 $6000
Annual benefit for years 11 ~ 20 $8000
What is the net present value of this investment? INITIAL COST
What is the net present value of this
investment?
INITIAL
COST $500,000
PROJECT
LIFE 15
years
SALVAGE
VALUE $
20,000
ANNUAL NET CASH
FLOWS $120,000
DISCOUNT
RATE 15
%
a. $
203,684
b. $
204,142
c. $
205,669
d. $
206,263
e. $
208,721
Net present value. Quark Industries has a project with the following projected cash flows: Initial cost:...
Net present value. Quark Industries has a project with the
following projected cash flows: Initial cost: $210,000 Cash flow
year one: $25,000 Cash flow year two: $72,000 Cash flow year
three: $146,000 Cash flow year four: $146,000 a. Using a
discount rate of 11% for this project and the NPV model,
determine whether the company should accept or reject this project.
b. Should the company accept or reject it using a discount rate of
13%? c. Should the company accept...
Net present value. Quark Industries has a project with the following projected cash flows: Initial cost:...
Net present value. Quark Industries has a
project with the following projected cash flows:
Initial cost: $270,000
Cash flow year one: $24,000
Cash flow year two: $79,000
Cash flow year three: $155,000
Cash flow year four: $155,000
a. Using a discount rate of 10% for this
project and the NPV model, determine whether the company should
accept or reject this project.
b. Should the company accept or reject it using
a discount rate of 13%?
c. Should the company accept...
Net present value. Lepton Industries has a project with the following projected cash flows: Initial cost:...
Net present value. Lepton Industries has a
project with the following projected cash flows:
Initial cost: $460,000
Cash flow year one: $132,000
Cash flow year two: $200,000
Cash flow year three: $191,000
Cash flow year four: $132,000
a. Using a discount rate of 11% for this
project and the NPV model, determine whether the company should
accept or reject this project.
b. Should the company accept or reject it using
a discount rate of 13%?
c. Should the company accept...
Calculate the present worth of all costs for a newly acquired machine with an initial cost...
Calculate the present worth of all costs for a newly acquired
machine with an initial cost of $28,000, no trade-in value, a life
of 14 years, and an annual operating cost of $17,000 for the first
5 years, increasing by 10% per year thereafter. Use an interest
rate of 10% per year.
The present worth of all costs for a newly acquired machine is
determined to be
What is the net present value of a project that requires an initial investment of $76,000...
What is the net present value of a project that requires an
initial investment of $76,000 and produces net cash flows of
$22,000 per year for 7 years? Assume the discount rate is 15
percent.
a.
$91,520
b.
$15,520
c.
$78,000
d.
$167,474
What is the net present value of a project that has an initial cash outflow of...
What is the net present value of a project that has an initial
cash outflow of $-13,000, at time 0, and the following cash flows
for years 1-4? The required return is 10.0%. DO NOT USE DOLLAR
SIGNS OR COMMAS IN YOUR ANSWER. ENTER YOUR ANSWER TO THE NEAREST
DOLLAR (e.g. 1250). Year Cash Flows 1 $3,950 2 $3,750 3 $5,900 4
$6,400
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