Reference no: EM132492245
A new furnace for your small factory will cost $37,000 and a year to install, will require ongoing maintenance expenditures of $2,500 a year. But it is far more fuel-efficient than your old furnace and will reduce your consumption of heating oil by 3,400 gallons per year. Heating oil this year will cost $3 a gallon; the price per gallon is expected to increase by $0.50 a year for the next 3 years and then to stabilize for the foreseeable future. The furnace will last for 20 years, at which point it will need to be replaced and will have no salvage value. The discount rate is 8%.
Question a. What is the net present value of the investment in the furnace? (Do not round intermediate calculations. Round your answer to the nearest whole dollar.)
Question b. What is the IRR? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Question c. What is the payback period? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Question d. What is the equivalent annual cost of the furnace? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Question e. What is the equivalent annual savings derived from the furnace? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Question f. Compare the PV of the difference between the equivalent annual cost and savings to your answer to part (a). Are the two measures the same or is one larger?
Explain the relationship between the marginal cost
: Explain the relationship between the marginal cost and average total cost figures.
|
Compute what cash proceeds received from the issuance
: How many years must Romeo wait to receive $76,000? (Round answer to 0 decimal places, e.g. 25.) What rate of interest will Andreas investment be earning
|
Find the total revenue function for the company
: Precision Machine Company produces a unique and high-quality machinefor sale. The company is a price maker in the domestic market. The total cost
|
Relationship between the actual unemployment rate
: Australia's output gap at present, and what does this indicate with respect to the relationship between the actual unemployment rate and the full-employment rat
|
What is equivalent annual savings derived from the furnace
: What is the equivalent annual savings derived from the furnace? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
|
Happens to employers and employees
: Briefly explain what happens to employers and employees when the CPI is upwardly biased (i.e. estimated to be higher than what it should be).
|
Discuss about connectivity across multiple availability zone
: Last week, you discussed GIG, Inc.'s benefits and concerns with moving to the cloud. This week, you will create a high-level diagram in Microsoft Visio.
|
Question - VIX Index and Variance Risk Premium
: Question 3 - VIX Index and Variance Risk Premium. Compute, on each day, the average realized variance over the next 21 days
|
What is the amount foley should invest
: What is the present value of $25,200 to be received at the end of each of 11 periods, discounted at 8%? (Round answer to 2 decimal places, e.g. 25.25.)
|