Question

Consider a project with a capital investment of $47,600, useful life of 9 years, annual revenue...

Consider a project with a capital investment of $47,600, useful life of 9 years, annual revenue of $1,720, and salvage value of $7257 at the end of its useful life. The MARR is 20%. Compute the B/C ratio of the project based on the AW.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Consider the following mutually exclusive alternatives: Alternative A Alternative B Capital investment Net annual receipts $702,000...
Consider the following mutually exclusive alternatives: Alternative A Alternative B Capital investment Net annual receipts $702,000 $123,550 $1,656,000 $276,200 Both alternatives have a useful life of 12 years and no market value at that time. The MARR is 12 % per year. Determine the annual worth (AW) of the most profitable course of action. (Enter your answer as a number without the dollar sign.)
A) The depreciation deduction for year 9 of an asset with a 20-year useful life is...
A) The depreciation deduction for year 9 of an asset with a 20-year useful life is $4,900. If the salvage value of the asset was estimated to be 2,500 and straight line depreciation was used to calculate the depreciation deduction for year 9, what was the initial cost of the asset? B) A lumber company purchases and installs a wood chipper for $205,000. The chipper is classified as MACRS 7-year property. The chipper’s useful life is 9 years. The estimated...
Consider the three mutually exclusive alternatives below. At the end of their useful lives, Alternatives X...
Consider the three mutually exclusive alternatives below. At the end of their useful lives, Alternatives X and Z will be replaced with identical replacements so that a 10-year service requirement is met. If the MARR is 3% per year, which alternative (if any) should be chosen based on the annual worth method? Alt X Alt Y Alt Z Capital investment $300,000 $425,000. $500,000. Annual savings $68,750 $108,750. $188,750. Salvage value $90,000 $125,000. $140,000. Life, years 10 20 5
Croce, Inc., is investigating an investment in equipment that would have a useful life of 9...
Croce, Inc., is investigating an investment in equipment that would have a useful life of 9 years. The company uses a discount rate of 16% in its capital budgeting. The net present value of the investment, excluding the salvage value, is −$578,586. (Ignore income taxes.) Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. How large would the salvage value of the equipment have to be to make the investment...
U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of...
U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Project Bono Project Edge Project Clayton Capital investment $168,000 $183,750 $202,000 Annual net income: Year 1 14,700 18,900 28,350 2 14,700 17,850 24,150 3 14,700 16,800 22,050 4 14,700 12,600 13,650 5 14,700 9,450 12,600 Total $73,500 $75,600 $100,800 Depreciation is computed by the straight-line method with no salvage value. The company’s cost of...
Company is considering a long-term capital investment project called ZIP. ZIP will require an investment of...
Company is considering a long-term capital investment project called ZIP. ZIP will require an investment of $120,000, and it will have a useful life of 4 years. Annual net income is expected to be: Year 1, $42,000; Year 2, $40,000; Year 3, $38,000, and Year 4, $36,000. Depreciation is computed by the straight-line method with no salvage value. The company’s cost of capital is 12%. Required: Compute the net present value for the project. (10 pts)
Your company is considering two​ projects, A and B. Neither project has a salvage value. Project...
Your company is considering two​ projects, A and B. Neither project has a salvage value. Project A                                            Project B Initial Investment ​$10,000 ​$15,000 Annual Revenue ​$2,000 ​$4,000 Annual Cost ​$400 ​$1,200 Useful Life 15 years 18 years Given a MARR of​ 10%, and uing the cotermination assumptions and a study period of 15​ years, answer the following​ questions: ​a) What is the imputed market value of Project B at the end of the study​ period? ​b) What is the present...
Consider a project with an initial investment of $50,000 and a salvage value at the end...
Consider a project with an initial investment of $50,000 and a salvage value at the end of 10 years of $10,000. The study period is 6 years and the MARR is 10%. Determine the imputed market value at the end of the study period.
A flood control project with a life of 13 years will require an investment of ​$55000...
A flood control project with a life of 13 years will require an investment of ​$55000 and annual maintenance costs of ​$5500. The project will provide no benefits for the first three years but will save ​$28000 per year in flood damage starting in the fourth year. The appropriate MARR is 12​% per year. What is the modified​ B-C ratio for the flood control​ project? a. 1.25 b.5.72 c. 1.41 d. 2.05 e. 1.86
Evaluate the following investment project: - Initial Investment = $ 30 million - Useful life =...
Evaluate the following investment project: - Initial Investment = $ 30 million - Useful life = 7 years - Salvage value = $ 3 million - Net Cash Flows: Years 1-7: $ 9 million The capital structure of the company requires financing: 40% with long-term debt through a bond, and 60% with its own capital, starting with Retained Earnings and if necessary, carry out a new share issue which will cost 3% more than Retained Earnings. Some additional information: -...