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...
Develop a spreadsheet to determine the net present value or present worth of the following project:...
Develop a spreadsheet to determine the net present value or
present worth of the following project:
Bonus Depreciation: 0%
Investment: 140,000
Revenue/Savings: 25,000
Incremental Expense/Cost: 5,000
Salvage Value: 25,000
Project Life: 10 years
MACRS Schedule: 7 years
Tax Rate: 25%
MARR: 12%
Inflation: 3%
Is this a good investment to make?
Rework the problem with Bonus Depreciation of 50% and
100%
Determine the internal rate of return for the project in the
previous problem with all three levels of Bonus...
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
Determine the net present worth (NPW) of the cash flows given in table below for an...
Determine the net present worth (NPW) of the cash flows given in
table below for an investment opportunity being presented to a
company. MARR =10%. Year 0 1-10 11-15 16-25 26-30 Cash Flow -$100K
10K 20K -5K 30K
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
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