Find the present value of the following scenarios

Assignment Help Accounting Basics
Reference no: EM13178415

  1. Find the Present Value of the following scenarios:
    a. An Annual Payment of $1500 over 6 years with an interest rate of 5%.
    b. A final payment, in 6 years, of $4500, with an interest rate of 6%.
  2. You are considering a project with initial investment of $91000, annual operating expenses of $10500 and annual revenue of $23500, and a decommissioning/disposal expense of $10000 at the end of life. MARR = 8.5%. Project life = 12 years. Does this project have an acceptable Present Value?
  3. A project is estimated to produce the following cash flow events:
    Initial investment of $30,000, and
    Annual operating cost of $21,000 and
    Annual operating revenue of $29,500 and
    has a service life of 9 years with a salvage value of $2500 at the end of the service life.
    For an interest rate of 7% find:
    a. The Present Value of the project.
    b. The Internal Rate of Return.
  4. A company is considering engineering proposals P1, P2, and P3 with 6 year lives and estimated money flows:

 

Proposal

P1

P2

P3

Investment

$700,000

$320,000

$380,000

Annual revenue

$350,000

$150,000

$280,000

Annual cost

$200,000

$90,000

$120,000

Salvage value

$5,000

$20,000

$10,000

 

The budget limit is $1,100,000.
a.         Develop the matrix of the investment alternatives, indicating which ones are not feasible, and give the reasons.
b.         Find the Present Value of the feasible alternatives. Interest rate 7.5%.
c.         Find the IRR for each feasible alternative.

 

  1. A company is considering engineering proposals P1, P2, and P3 with 5 year lives and estimated money flows:

 

Proposal

P1

P2

P3

Investment

$520,000

$340,000

$380,000

Annual revenue

$230,000

$210,000

$250,000

Annual cost

$100,000

$90,000

$120,000

Salvage value

$10,000

$7,000

$4,000

 

The budget limit is $1,000,000. P2 and P3 are mutually exclusive.
a.          Develop the matrix of the investment alternatives, indicating which ones are not feasible, and give the reasons.
b.          Develop the composite money flows for the feasible alternatives.
c.          Find the preferred alternative for a MARR of 7% using incremental analysis.

Reference no: EM13178415

Questions Cloud

Purpose of the german-russian reinsurance treaty : How did Bismarck's system of alliances help maintain peace?  What was the purpose of the German-Russian Reinsurance Treaty? Why did it end in 1890?  What were the reasons for Britain and Germany's love-hate relationship?
Major underlying assumptions of a biopsychology : Explore the major underlying assumptions of a biopsychology approach write 200-300 words
Enron case, relationship between power, politics, conflict : Enron Case,  Reflect on the relationship between power, politics and conflict and how it may have impacted the Enron scandal. Then, consider how HRM approaches may have assisted through conflict resolution or the application of new approaches to chan..
Power and politics in your organisation : Power and Politics in Your Organisation please wrote 1000 words,  Think about the potential influences that power and politics may have on your scenario organisation. Consider all perspectives, including the organisation's employees, managers and hum..
Find the present value of the following scenarios : Find the Present Value of the following scenarios: a. An Annual Payment of $1500 over 6 years with an interest rate of 5%. b. A final payment, in 6 years, of $4500, with an interest rate of 6%.
Effective project management : Write a report on  Effective project management. include APA style and references. Target the report on mainly  Effective project management.
Do a target market segmentation-overview of gr green : Do a target market segmentation (1 page) POSSIBLE FOCUS: middle upper class; rich cities; demographic; geographic; behavioural;
Internal rate of return and company : Calculate the Net Present Value and Internal Rate of Return and company is considering the acquisition of equipment that would radically change its manufacturing process.
State specific gravity bottle and the metal pieces together : A student found that the mass of an empty specific gravity bottle was 21.431 g. Metal pieces were added to the dry bottle. The specific gravity bottle and the metal pieces together

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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