Reference no: EM131499035

Question 1:

What would be the present value of an item that has a salvage value of $25,000 at the end of four years? Assume a discount rate of 2.8% for an end-of-year factor. Carry interim calculations to four decimal places and round your answer to the nearest dollar.

$21,535
$20,747
$24,085
$22,386

Question 2: If an alternative has monthly payments of $12,000 a month for three years with a purchase price of $75,000 at the end of year three, what would the cash flow diagram look like? Select the correct choice from each pair of answers.

$144,000 EOY 1
$144,000 MOY 1
$144,000 EOY 2
$144,000 MOY 2
$144,000 EOY 3
$144,000 MOY 3
$75,000 EOY 3
$75,000 MOY 3

Question 3: An alternative has a discounted project cost of $4,185,000 with no salvage value. The estimate was in constant dollars and the discounting used mid-year factors. While the period of analysis is 5 years, the alternative only provides benefits for the last 3 years. Calculate the uniform annual cost.

$1,525,813
$1,592,861
$1,648,027
$1,759,148

Question 4: An alternative requires $12500 to be paid monthly over the course of year 1, year 2, year 3 and year 4. All values are in constant dollars. Using the tables in the chapter, compute the NPV of this alternative. Round intermediate calculations to two decimal places.

$562,070
$533,412
$570,750
$546,045

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