Equivalent worth-ror and payback period analyses

Assignment Help Business Economics

Reference no: EM131159562

Problem - Equivalent Worth, ROR, and Payback Period Analyses

a) Separately for each of part (a) and part (b) of Problem 5 above perform the following analyses. Whenever applicable, you can do your calculations only with Excel functions.

b) Plot the PW, AW, and FW of the project (on the same plot) versus a reasonably wide range of the MARR that covers positive and negative values of these metrics.

c) Calculate the IRR of the project, and discuss its implication for the project’s acceptability by comparing to the plot.

d) Calculate the ERR of the project assuming an external borrowing/re-investment rate e equal to the MARR= 0.8%. Discuss the project’s acceptability, and also compare and discuss the ERR value versus the IRR value.

e) Perform a simple payback period analysis for the project, supporting it by a plot of the cumulative net cash flow versus the year into the project.

f) Perform a discounted payback analysis of the project, supporting it by a plot of the cumulative net discounted cash flow versus the year into the project.

g) Compare and discuss your results in parts (e) and (f).

Reference no: EM131159562

Questions Cloud

Outlook for the national economy was topic of discussion : At a monthly staff planning meeting, the outlook for the national economy was a topic of discussion. During the discussion, one participant noted that gross domestic product (GDP) was expected to increase only slightly for the coming year. Another co..

Identified by the national bureau of economic research : Pick the last 2 business cycles as identified by the National Bureau of Economic Research. Explain the behavior of the following variables during each of these cycles- unemployment, inflation, GDP Growth.

Function of savings-depreciation rate-population growth rate : Consider an economy described by the production function: Y = F (K, L ) = K1/2L1/2 where the depreciation rate is δ and the population growth rate is n. Find the per worker production function. Find the steady-state capital stock per worker as a func..

Issues with economic growth and instability : Use the AS-AD model to graph the following issues with economic growth and instability:

Equivalent worth-ror and payback period analyses : Separately for each of part (a) and part (b) of Problem 5 above perform the following analyses. Whenever applicable, you can do your calculations only with Excel functions. Plot the PW, AW, and FW of the project (on the same plot) versus a reasonably..

Expected revenue from auctioning item with reserve price : You hold an auction on eBay and expect two bidders to show up. You estimate that each bidder has a value of either $5 or $8 for the item, and you attach probabilities to each value of 50%. Your own value for the item is zero. You can set a reserve pr..

Why they led to the inflation and unemployment : Research two periods in history, one where the United States experienced an increase in inflation and the other an increase in unemployment. Write a paper discussing the causes and outcomes. Use the aggregate demand and supply models to analyze the c..

Determine which industries would grow the most rapidly : Suppose the U.S. government was able to determine which industries would grow the most rapidly over the next 20 years. Explain why this doesn’t necessarily mean there should be a policy to support the growth of these industries. Analyze the disadvant..

Benefited the most from international trade : Identify which countries have benefited the most from international trade over the last few decades. What policies do these countries have in common? Do their experiences lend support to the infant industry argument or argue against it? To support yo..

User Account

All Pages