Determine which project should be selected

Assignment Help Econometrics
Reference no: EM13199512

A large profitable corporation is considering two mutually exclusive capital investments:

Alt A.
Initial Cost: 11,000
Uniform Annual Benefit: 3,000
End of depreciable life salvage value: 2,000
Depreciation method: SL
End of useful life salvage value obtained: 2,000
Depreciable life, in years: 3
Useful life, years: 5

Alt B.
Initial Cost: 33,000
Uniform Annual Benefit: 9,000
End of depreciable life salvage value: 3,000
Depreciation method: SOYD
End of useful life salvage value obtained: 5,000
Depreciable life, in years: 4
Useful life, years: 5

If the firms after-tax minimum attractive rate of return is 12%, and its combined incremental income tax rate is 34%, which project should be selected?

Reference no: EM13199512

Questions Cloud

Explain sewing machines use similar devices called feed dogs : Sewing machines use similar devices, called feed dogs, to move the cloth beneath the presser foot. The motion of the feed dogs can be simulated using fuctions of the type abs(sinkt)/ sinkt in place of sines and cosines.
Compute the before tax rate of return : A special power tool for plastic produces costs 400, has a 4 year useful life, no salvage value and a 2-year-before tax payback period. Assume uniform annual end of the year benefits. A. Compute the before tax rate of return
Determine a formula for this particular aircraft : Determine a formula for this particular aircraft that gives the takeoff roll as an exponential function of airport elevation. (Note: Use the general exponential function.)
State which property allows to switch the position of terms : sandra would like to switch the positions of terms so that like terms follow each other in the expression. Which property allows her to switch the position of terms?
Determine which project should be selected : A large profitable corporation is considering two mutually exclusive capital investments: Alt A. Initial Cost: 11,000Uniform Annual Benefit: 3,000 End of depreciable life salvage value: 2,000 Depreciation method: SL End of useful life salvage value
Find the volume of s as a function of r and theta : let s be the solid obtained by intersecting two cylinders of radius r whose axes intersect at an angle theta. find the volume of S as a function of r and theta.
What would be the effect on us gdp : Suppose that an auto company owned entirely by german citizens opens a new factory in south carolina. What sort of foreign investment would this represent Would the effect pm the U.S. GDP be larger or smaller
Write an equation for the orbit of mars : at its closest point, mars is 128.5 million miles from the sun. at its farthest point, mars is 155.0 million miles from the sun. write an equation for the orbit of mars. assume that the center of the orbit is the origin, the sun lies on the x-axis..
What was the speed on each part of the trip : During the first part of a trip, a canoeist travels 48 miles at a certain speed. The canoeist travels 19 miles on the second part of the trip ata speed 5 mph slower. The total time for the trip is 2 hrs. What was the speed on each part of the trip..

Reviews

Write a Review

Econometrics Questions & Answers

  What would be the deadwieght loss associated

Suppose the demand for Cardinal's World Series tickets is Qd = 48, 061 ? 2.4P (for the purposes of this problem, we will suppose that fans do not care where they sit). The Cardinals play at Busch Stadium, which has a seating capacity of 46,861. Th..

  What is profit maximizing quantity and price for media cable

Explain why a monopolist, such as Media Cable, faces a downward-sloping demand curve Explain why the marginal revenue from an additional sale is less than the price of the service Suppose Media Cable currently charges $70 for its service. If it lo..

  Explain how you would test the joint null hypothesis

Explain how you would test null hypothesis that b1=0 in the multiple regression model, Y=b0+b1*X1+b2*X2+b3*X3+u. Also, explain how you would test the joint null hypothesis that b1=b2=0

  Calculate the rate of inflation

For the consumer price index (CPI) values shown, calculate the rate of inflation in each year from 1930 to 1933. Year: 1929 1930 1931 1932 1933 CPI: 51.3 50.0 45.6 40.9 38.8

  What is the average annual rate of growth of real gdp

This is for a Macro class I am taking a test prep and I need like a step by step guide as to how i can do this using excel (the data must be found online) I apreciate as much help as possible! Question 1- Using a spreadsheet program, download the..

  Maximizing total output vs output per worker

You have given the following data about the amount your firm can manufacture per day given the number of workers it hires.

  Gross domestic product effect on computer hardware industry

Make an in depth analysis on how your prediction of indicators Gross Domestic Product, Producer Price Index and Retail Sales or PC Retail Sales will effect the Dynamic Random Access Memory industry.

  What is the eight-firm concentration ratio

What is the four-firm concentration ratio for this industry? ___74%_ b) What is the eight-firm concentration ratio for this industry? _____98% Suppose that the distribution of sales within an industry is as shown in the table.

  Determine the total tax paid by producer

Suppose the demand for a product is given by P = 50 - Q. Also, the supply is given by P = 10 + 3Q. If a $12 per unit excise tax is levied on the buyers of a good, after the tax,what is the total quantity of the good sold.

  Find t-calculated values for the respective coefficients

Interpret the following regression equation together with all the supporting statistics where Yt is the number of new cars sold (millions of units), X1t is the disposable income of consumers ($B), X2t is the price of a new car ..

  Identify any economic issues of special concern

Research the current value of the following economic indicators: Analyze the current macroeconomic situation. Discuss expectations of changes in economic, financial, and international conditions in the near future. Identify any economic issues of ..

  Question about price ceiling

Acme Water is a privately owned firm that is sole supplier of water to a rural town in Pennsylvania. The owner of company has provided the manager of firm an incentive to maximize company's profits,

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd