Reference no: EM132233647
Assignment
QUESTION 1:
A project has a net present worth of -$60,000 as of January 1, 2025. If a 7% interest rate is used, what is the project NPW as of December 31, 2018?
QUESTION 2:
A machine costs $300,000 to purchase and will provide $72,000 a year in benefits. The company plans to use the machine for 12 years and then will sell the machine for scrap, receiving $20,000. The company interest rate is 10%. Should the machine be purchased?
QUESTION 3:
You are considering purchasing a new injection-molding machine. The machine will have an estimated life of 10 years with a negligible salvage value. Its annual operating cash flows are estimated to be $65,000. At an11% required rate of return on investment, what would be the maximum amount that should be spent on purchasing the injection-molding machine?
QUESTION 4:
A company is considering investing $5 million in a new commercial building. The yearly expected revenue from this investment is $450,000 for 10 years. At year 10 the commercial building would have a salvage value of %85 of its initial investment. The company is looking for a return of 6%. Is this investment worth undertaking?
QUESTION 5:
Use an 8-year analysis period and a 10% interest rate to determine which alternative should be selected.
|
A |
B |
| Initial Cost |
$10,000 |
$20,000 |
| Uniform Annual Benefits |
$4,000 |
$4,800 |
| Useful Life |
4 years |
8 years |
QUESTION 6:
A new bridge project is being evaluated at i = 15%. Recommend an alternative based on the capitalized cost for each.
|
Construction Cost |
Annual O&M |
Life (years) |
| Concrete |
$50 million |
$250,000 |
70 |
| Steel |
$40 million |
$500,000 |
50 |