Q: Which capital investment methods require the use of a present value table?
A: Net Present Value: It is a measure of profitability for a project used primarily in capital…
Q: Which is the accounting rate of return using the average investment?
A: Summary of the relevant information as provided in the question : cost of investment = £…
Q: Describe the Project Cost of Capital: Risk-Adjusted Discount Rate Approach?
A: The cost of capital is the return required to make a capital budgeting venture advantageous, for…
Q: what is the discounted payback period for the investment?
A: Payback Period is the calculation of periods or years within which cost of investment is recovered.…
Q: How can we determine which projects are pure investments?
A: A pure investment project refers to an investment wherein the firm borrows money from the project…
Q: Should the economic engineers make capital-expenditure decisions based on a prediction about the…
A: The question is based on the concept of capital expenditure decision making, which is investment of…
Q: Are there sources of value in an investment? what they are? and give an example for both?
A: Yes, there are various sources of value in an investment. An investment is a stock or a bond. People…
Q: What are the two sources of value in an investment? Given an example of each.
A: An investment is a process where the investors gives or outlays his or her capital in return of…
Q: How capital expenditure(investment) analysis helps in making long term decision to determine…
A: Capital Expenditure Decisions include those decisions which require deciding on the purchase of…
Q: future value of the investment.
A: Investment Proposal: Investment proposal is a type of document containing the business terms and the…
Q: What are the benefits and corresponding risks of Financial Investment?
A: Financial Investments are investments that are made with the expectation to receive future financial…
Q: Why is it necessary to determine how long you can expect to reap benefit from the investment?
A: Individuals as well as firms often make investment and specify the time limit for which this…
Q: If the net present value of a proposed investment is positive
A: Net present value method (NPV): Net present value method is the method which is used to compare the…
Q: what would be the purchasing power of the total return on their investment
A: Purchasing Power: Purchasing power refers to the actual power of buying the goods of services with…
Q: Discuss the advantages and disadvantages of using (a) payback, (b) net present value and (c )…
A: Payback Period: It refers to the period in which the project's or investment's initial cost is…
Q: Understand the strategic role of capital investment analysis.
A: The capital investment analysis is an analysis that is done by the investors to know the potential…
Q: What are investment returns?
A: Investment returns are a performance measure used to evaluate a speculation’s adequacy or to think…
Q: Explain the meaning and composition of the "return" of a financial investment
A: Financial Investment Funds invested for the purpose of earning returns over a specified period of…
Q: Evaluate the net present value of the investment at the company's MARR. State w
A: Net present value(NPV) is the capital budgeting method used for finding the profitability of the…
Q: why net present value is considered to be superior to internal rate of return as an investment…
A: Investment- The purchase of an asset in order to generate income or capital gain is referred to as…
Q: What are the best short-term and long-term investment strategies going forward into the future?
A: Short term investment strategy – Those investment that are usually traded for upto a span of 3 years…
Q: r expected return on this investment?
A: Expected return on investment refers to the rate of return that an investor is expecting on an…
Q: effective interest rate earned on this investment.
A: Effective Interest rate is the rate that determines the return on the investment. On an investment…
Q: ear. Calculate the rate of return of the investment.
A: Rate of return is the internal rate of return earned. Rate of return = 20.00%
Q: The net present value of an investment represents the difference between the:
A: The Answer :
Q: Explain how a net present value (NPV) profile is used to compare capital projects. How does this…
A: The net present value is the sum of the present value of all the cash flows in the future subtracted…
Q: Describe the affects of the present value of an investment.
A: Present value of the investment: Present value of the investment is calculated using the cash flows…
Q: Explain Cumulative Investment Return Patterns?
A: Answer: Introduction: Cumulative return is the total amount of money that an individual has…
Q: Factors affecting investment decisions
A: Introduction: The Investment decision is the decision taken by shareholders or top-level management…
Q: Illustrate the method of investment risk: Investment?
A: Following are the methods of investment risk: Investment: Standard deviation: Standard deviation…
Q: What is the initial investment plus interest?
A: The total of initial investment and interest will give the total value or worth of the investment…
Q: Which approach to investment analysis is "best" in terms of accounting for both the timing and…
A: Capital budgeting is a tool or technique that helps to analyze the profitability of the project.…
Q: How can I calculate the NPV of an investment?
A: Net present value:- Net present value is the investment evaluation technique, where we evaluate…
Q: How can we measure the true rate of return of any internal portion of an investment project?
A: True rate of return means real rate of return on investment. It is the actual return earned on an…
Q: The present value that must be invested
A: Interest charged on the principal amount at a fixed rate for a fixed period of time is known as…
Q: discuss the importance of considering risk when analyzing investments?
A: Risk refers to the probability of uncertainties about future .Risk may also be termed as volatility…
Q: Describe the process of Incremental-Investment Analysis?
A: The question is based on the concept of Incremental analysis, the method is a problem-solving…
Q: How do we use the computed figure when evaluating an investment alternative?
A: There are various computations available for evaluation of investment alternatives. The rate of…
Q: What is meant by an investment project’s internal rate of return? How is the internal rate of return…
A:
Q: Compare short-term and long-term investment strategies.
A: Investment strategies can be defined as those strategies which consist of various methodologies and…
Q: why do we need to quantify the investment risk and returns?
A: Almost all investments possess certain risks and return.
Q: Discuss and evaluate the use of the payback period as an investment criterion.
A: Payback Period: It refers to the period in which a project or an investment recovers its initial…
Q: Explain Yields on Investment Annuities?
A: The question is based on the concept of calculation yield, which describes the returns to the…
Q: Illustrate investment risk?
A: Investment risk is the risk associated with the probability of losses occurring in relation to the…
Q: a) Explain the Net Present Value relating to investment of funds in long term investments. b)…
A: Net Present Value: While making decision the net present value of Project is calculated to determine…
Q: Which of the following is a present value method of analyzing capital investment proposals? Uaverage…
A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…
Q: The future benefits received from investing in a project are the projects? Net cash flows Net…
A: Net cash flows are the returns from the project generated and received in the future.
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- The initial cost of a new machine is $10,000. The annual operating cost is $1,000/yr for first 3 years, and then becomes $3,000/yr after that. The machine needs a major repair at the end of 5th year, which costs $5,000. The machine has 10 years useful life with salvage value of $4,000. Calculate EUAC for keeping the machine for 10 years. (i=10%/yr)A retrofitted heating system is being considered for an office building. The system can be purchased and installed for $ (501,000), and it will save an estimated (101,000) kilowatt-hours (kWh) of electric power each year over a 6-year period. A kilowatt-hour of electricity costs $1.164. The market value (MV) of the system will be $ (8,100) at the end of six years, and the annual operating and maintenance expenses (O&M) for the system are $ (5,100). MARR is15% per year. (a) Use the conventional benefit-cost (B/C ratio) for Present Worth method to make a recommendation. (i) (ii) Compute the conventional B/C ratio. Round your answer to 2 decimal places. Should this system be purchased? Why? (b) Use the modified benefit-cost (B/C ratio) for Present Worth method to make a recommendation. (i) Compute the modified B/C ratio. Round your answer to 2 decimal places. Should this system be purchased? Why? (ii) (c) Assume that the electricity costs will increase at the inflation rate of 3% per…Two techniques can be used to produce expansion anchors. Technique A costs $90,000 initially and will have a $12,000 salvage value after 3 years. The operating cost with this method will be $33,000 in year 1, increasing by $2600 each year. Technique B will have a first cost of $113,000, an operating cost of $7000 in year 1, increasing by $7000 each year,and a $43,000 salvage value after its 3-year life. At an interest rate of 13% per year, which technique should be used on the basis of a present worth analysis? Notice that there are no revenues. Please work out and do not use excel, however if you use excel please show how to input everything needed down to the formula, thank you!
- A commercial 3D printer is purchased for $350,000. The salvage value of the printer decreases by 30% each year that it is held. The cost to operate and maintain the machine the first year it is used is $14,000; these costs increase by $5,000 each year. What is the optimal replacement interval and minimum EUAC for the printer, assuming a MARR of 13% is used? Click here to access the TVM Factor Table Calculator. years ORI: EUAC*: $ Carry all interim calculations to 5 decimal places and then round your final answers to a whole number. The tolerance is ±5 for the EUAC*.An engineer has designed 2 alternative systems to cater for customer's plant operation. System 1 will need initial investment of $150,000 and will have an annual operating cost of $20,000 with salvage price of $5,000 after 4 years. System 2 will need an investment of $180,000 and the annual operating cost will be $15,000. System can be salvaged for $8,000 after 6 years. At an interest rate of 10% per year, which system should be proposed by the engineer on the basis of a present worth analysis? Use equations to solve this problem.An injection molding system has a first cost of $200,000 and an annual operating cost of $85,000 in years 1 and 2, increasing by $4,500 per year thereafter. The salvage value of the system is 25% of the first cost regardless of when the system is retired within its maximum useful life of 5 years. Using a MARR of 9% per year, determine the ESL and the respective AW value of the system. The ESL is year(s) and AW value of the system is $
- A conveyor system costs $110,000 to install. The salvage value of the conveyor system decreases by $20,000 each year until its salvage value is $0, at which point it no longer decreases. The cost to operate and maintain the conveyor system the first year is $20,000; this cost increases by 7% per year. What is the optimal replacement interval and minimum EUAC for the conveyor system, assuming a MARR of 15% is used? Click here to access the TVM Factor Table Calculator. years ORI: EUAC*: $ Carry all interim calculations to 5 decimal places and then round your final answers to a whole number. The tolerance is ±10 for the EUAC*. eTextbook and Media Hint Assistance Used Construct an Excel® table that computes the EUAC for different values of n. This will help you to find EUAC*, from which you can deduce the optimal replacement interval.A small utility company is considering the purchase of a powerdriven post hole digger. The equipment will cost $8,000 and have an estimated life of 8 years and a salvage value of $1,000 at that time. Annual maintenance costs for the digger are estimated to be 15% of the first cost regardless of its level of usage. Operations costs are $40 per day with an output rate of 25 holes per day. At present, holes are manually dug at a rate of 1.5 per day by a laborer whose marginal cost is $11.20 per day. Determine the break-even value in holes per year. MARR is 8%.An investment of $20,000 for a new condenser is being considered. Estimated salvage value of the condenser is $5,000 at the end of an estimated life of 6 years. Annual income each year for the 6 years is $8,500. Annual operating expenses are $2,300. Assume money is worth 15% compounded annually. Determine the internal rate of return and whether or not the condenser should be purchased.
- Two methods can be used to produce expansion anchors. Method A costs $70,000 initially and will have a $11,000 salvage value after 3 years. The operating cost with this method will be $22,000 in year 1, increasing by $2600 each year. Method B will have a first cost of $123,000, an operating cost of $8000 in year 1, increasing by $6500 each year, and a $33,000 salvage value after its 3-year life. At an interest rate of 15% per year, which method should be used on the basis of a present worth analysis? The present worth for method A is $ The present worth for method B is $[ Method (Click to select) is used to produce expansion anchors.A new robot has a first cost of $380,000, and an annual operating cost of $88,000 in years 1 and 2, increasing by $10000 per year thereafter. The salvage value of the system is $25,000 regardless of when the system is retired within its maximum useful life of 5 years. Using a MARR of 14% per year, determine the ESL and the respective AW value of the system ESL: a) 1 year b) 4 years c) 5 years d) 3 years AW value of system: a) $204,860 b) $336,284 c) $97,953 d) $496,200Two methods can be used to produce expansion anchors. Method A costs $ 70, 000 initially and will have a $15,000 salvage value after 3 years. The operating cost with this method will be $36,000 in year 1, increasing by $3200 each year. Method B will have a first cost of $ 116,000, an operating cost of $10000 in year 1, increasing by $10000 each year, and a $46, 000 salvage value after its 3 year life. At an interest rate of 8% per year, which method should be used on the basis of a present worth analysis?