The Templeton Manufacturing and Distribution Company of Tacoma, Washington, is contemplating the purchase of a new conveyor belt system for one of its regional distribution facilities. Both alternatives will accomplish the same task but the Eclipse Model is substantially more expensive than the Sabre Model and will not have to be replaced for 10 years, whereas the cheaper model will need to be replaced in just 5 years. The costs of purchasing the two systems and the costs of operating them annually over their expected lives is provided below:
Year Eclipse Sabre
0 $(1,350,000) $(750,000)
1 $(26,000) $(51,000)
2 $(29,000) $(51,000)
3 $(29,000) $(57,000)
4 $(29,000) $(57,000)
5 $(43,000) $(78,000)
6 $(43,000)
7 $(43,000)
8 $(43,000)
9 $(43,000)
10 $(43,000)
a. Templeton typically evaluates investments in plant improvements using a required rate of return of 11% What are the NPVs for the two systems?
b. Calculate the equivalent annual costs for the two systems.
c. Based on your analysis of the two systems using both their NPV and EAC, which system do you recommend the company pick? Why?
In: Finance
A researcher claims the mean age of residents of a small town is
more than 38 years. The age (in years) of a random sample of 30
sutdents are listed below. At alpha=0.10, is there enough evidence
to support the researcher's claim? assum the population standard
deviation is 9 years.
Ages (in years)
41
33
47
31
26
39
19
25
23
31
39
36
41
28
33
41
44
40
30
29
46
42
53
21
29
43
46
39
35
33
42
35
43
35
24
21
29
24
25
85
56
82
87
72
31
53
31
33
54
60
31
81
32
40
26
52
37
71
a) Identify the claim and state Ho and Ha
(b) Determine whether the hypothesis test is left-tailed,
right-tailed, or two-tailed and whether to use a z-test, a t-test,
or a chi-square test. Explain your reasoning
(c)Choose one of the options Option 1: Find the critical value(s),
identify the rejection region(s), and find the appropriate
standardized test statistic. Option 2: Find the appropriate
standardized test statistic and the P-value
(d) Decide whether to reject or fail to reject the null
hypothesis
(e) Interpret the decision in the context of the original
claim.
In: Math
You have been given a project to evaluate. The upfront cost is $100,000. The project will then generate $40,000 in year one, $50,000 in year two, and then $60,000 for the last 3 years of the project. If your cost of capital is 11%, what is the NPV? IRR? Show Calculations.
In: Finance
Two airplanes in a show are performing an act called a near miss, in which they start over opposite ends of the show (in the air), head directly toward one another, and then roll at the last second to avoid collision. Suppose the roll is supposed to happen in front of the announcer
In: Physics
On January 15th 2019 A and B agreed on a 1 year swap with quarterly settlement and the swap rate at 7% p.a. on notional principal of $1m. A is the payer. The floating rate was set at BBSW which was 8% p.a. on January 15, 8.5% in April, 7% in July, 6.5% in October and 5% in January 2020. Calculate the swap cash settlements between the two parties
In: Finance
From this Sample
No A. B.
1. 7. 4.
2. 8. 5.
3. 9. 3.
4. 5. 6.
5. 7. 2.
6. 6. 4.
Test of hypothesis for difference of two means by using
1. t Test
2. ANOVA
Take 5% type 1 error, then compare the results.
Show that t² is equal to f.
In: Statistics and Probability
The tool in AutoCAD that allows you to adjust the properties of layers in one drawing so that they match the properties of another drawing is the A. Layer Transform. B. Properties Transform. C. Layer Translator. D. Property Match.
In: Mechanical Engineering
Calculate the requested statistics for the following sample data:
11, 13, 5, 13, 7, 8
Give the answer to the proper number of decimal places
outlined below •.
.
(a) mean =
(b) median =
(c) mode =
(d) range =
(e) variance =
(f) standard deviation =
Rounding Rules:
• Mean, Standard Deviation, and Variance: Your
answer should be rounded to one more decimal place than the raw
data.
• Median: If you have to take the mean of two
numbers then round that result to one more decimal place than the
raw data. If one of the elements of the data set is the median,
then use that number as is.
• Intermediate Steps: When performing intermediate
steps to do something like calculate the standard deviation, it is
best to round to at least one extra decimal place than will be used
in the final answer.
In: Statistics and Probability
In: Statistics and Probability
V. Rahr and Sons is a Fort Worth brewery founded by Fritz Rahr, a Neeley undergraduate and MBA. Currently the company makes Rahr Blonde Lager, Rahr’s Red, and Ugly Pug brews. They are considering a new beer, Frog Princess, with which to celebrate their ties to TCU. The project includes an initial outlay of $750,000 for the purchase of capital equipment that will be depreciated straight line to zero over six years.
Sales are expected to be $400,000 in years 1-3 and $600,000 in years 4-6. Production costs during years 1-6 are as follows: fixed costs (not including depreciation) are expected to be $150,000 per year; variable costs per year will be 40% of sales. The project will require an initial investment in NWC of 200,000 in year 0.
Beyond year six, the company expects that sales and unlevered net income in year seven will be 4% higher than that in year 6, and will continue growing at 4% per year infinitely. Additionally, in year 7 and beyond, new capital expenditures net of depreciation, and increases in NWC, combined, will be 6% of sales. Assume the marginal tax rate is 21%. The appropriate discount rate is 8%.
What is the NPV of the project? What is the IRR? Should the project be undertaken?
I've asked this question three times now and gotten three different answers so I want to see if this will confirm the right one. Thanks
In: Finance