What is the annual worth of each option

Assignment Help Financial Management

Reference no: EM131510842

Parker County Community College (PCCC) is trying to determine whether to use no insulation or to use insulation that is either 1 inch thick or 2 inches thick on its steam pipes. The heat loss from the pipes without insulation is expected to cost $1.30 per year per foot of pipe. A 1-inch thick insulated covering will eliminate 89% of the loss and will cost $0.25 per foot. A 2-inch thick insulated covering will eliminate 92% of the lost and will cost $0.85 per foot. PCCC Physical Plant Services estimates that there are 110,000 feet of steam pipe on campus. The PCCC Accounting Office requires a 10 % year return to justify capital expenditures. The insulation has a life expectancy of 10 years.

What is the annual worth of each option?

No insulation: ____ $

1-inch insulation: ____$

2-inch insulation: ____ $

Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±20. Show a negative amount preceded by a minus sign.

Reference no: EM131510842

Questions Cloud

What is the bonds price-stated as a percent of par : The bond is currently priced to yield 3.6%. What is the bond's price, stated as a percent of par?

What kinds of factors affect the expected return of a stock : What kinds of factors affect the expected return of a stock? Does international diversification affect innovation similarly in all industries? Why or why not?

Assess the impact of changes in the market return on asset : A firm wishes to assess the impact of changes in market return on asset that has beta of 1.7. Would this asset be considered more or less risky than market?

Project has an initial requirement : A project has an initial requirement of $198,955 for new equipment and $10,880 for net working capital. What is the project's NPV if the tax rate is 37%?

What is the annual worth of each option : Parker County Community College (PCCC) is trying to determine whether to use no insulation. What is the annual worth of each option?

What is the operating cash flow : ABC, Inc., is considering purchase of a new equipment. what is the operating cash flow?

The final payment the bank will require you to make : what final payment will the bank require you to make so that it is indifferent to the two forms of payment?

Calculate the value of new value bond : ABC Corp. has been forced to file for bankruptcy. Calculate the value of a new $1,000 par value bond assuming a yield to maturity of 10%.

Nominal cost of trade credit-effective cost of trade credit : Cost of Trade Credit What is the nominal and effective cost of trade credit under the credit terms of 1/15, net 30?

User Account

All Pages