Margaret has a project with a $30,000 first cost that returns $5,600 per year over its...
Margaret has a project with a $30,000 first cost that returns $5,600 per year over its 10-year life. It has salvage value of $3,800 at the end of 10 years. If the MARR is 15 %.
(Use 5 significant figures for your calculations, and round your answers to the nearest dollar. Indicate losses as a negative value.)
(a) What is the present worth of this project?
(b) What is the annual worth of this project?
(c) What is the future worth of this project after 10 years?
Homework Answers
a ) Ans: the present worth of this project is -$954
Explanation:
P = $30,000
Annual return (A) = $5,600
Rate of interest ( i ) = 15%
Number of interest period ( n ) = 10
Salvage value ( F ) = $3,800
PW = - 30,000 + 5600 ( P / A , i ,n ) + 3800( P / F , i ,n )
= -30,000 + 5600 ( P / A , 15% , 10 ) + 3800( P / F , 15% ,10 )
= -30,000 + 5600 ( 5.019 ) +3800( 0.2472 )
= -30,000 + 28106.4 + 939.36
= - 30,000 + 29045.76
= - $954.24
b ) Ans: the annual worth of this project is -$192
Explanation:
P = $30,000
Annual return (A) = $5,600
Rate of interest ( i ) = 15%
Number of interest period ( n ) = 10
Salvage value ( F ) = $3,800
AW = -30,000 ( A / P , i ,n ) + 5600 + 3800 ( A / F , i ,n )
= -30,000 ( A / P , 15% , 10 ) + 5600 + 3800 ( A / F , 15% ,10 )
= -30,000 ( 0.1993 ) + 5600 + 3800 ( 0.0493)
= - 5979 + 5600 +187.34
= - 5979 + 5787.34
= - $191.66
c ) Ans: the future worth of this project is -$3878
Explanation:
P = $30,000
Annual return (A) = $5,600
Rate of interest ( i ) = 15%
Number of interest period ( n ) = 10
Salvage value ( F ) = $3,800
FW = -30,000 ( F / P , i ,n ) + 5600 ( F / A , i ,n ) + 3800
= -30,000 ( F / P , 15% ,10 ) + 5600 ( F / A , 15% ,10 ) + 3800
= -30,000 ( 4.046 ) + 5600 ( 20.304 ) + 3800
= -121380 + 113702.4 + 3800
= -121380 + 117502.4
= - $3877.6
Add Answer to:
Margaret has a project with a $30,000 first cost that
returns $5,600 per year over its...
Please show code if you use excel thank you. Project A has a first cost of...
Please show code if you use excel thank you. Project A has a first cost of $3,500, annual operating and maintenance costs of $1,900, annual savings of $2,300, and a salvage value of $1,800 at the end of its 5 year useful life. Project B has a first cost of $6,000, annual operating and maintenance costs of $1,600, annual savings of $2,500, and a salvage value of $2,000 at the end of its 7 year useful life. Using a MARR...
Determine the FW of the following engineering project when the MARR is 17% per year. Is...
Determine the FW of the following engineering project when the MARR is 17% per year. Is the project acceptable? Investment cost Expected life Market (salvage) value Annual receipts Annual expenses Proposal A $9,500 6 years -$1,100 $7,000 $4,000 A negative market value means that there is a net cost to dispose of an asset. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 17% per year. The FW of the following engineering...
A project your firm is considering for implementation has these estimated costs and revenues: an investment...
A project your firm is considering for implementation has these estimated costs and revenues: an investment cost of $57,673, maintenance costs that start at $5,000 at end-of-year (FOY) one and increase by $1,000 for each of the next four years, and then remain constant for the following five years; savings of $23,331 per year (EOY 1-10); and finally a resale value of $29,564 at EOY 10. If the project has a 10-year life and the firm's MARR is 10% per...
A project has a first cost of $113,164, will produce a $65,390 net annual benefit
A project has a first cost of $113,164, will produce a $65,390 net annual benefit, and has annual maintenance costs of $25,793 over its 25-year life. It has a salvage value of $36,264 at the end of its life. Using a MARR of 2%, what is the benefit-cost ratio of the project? Enter your answer as: 1.23 (Calculate to 2 decimal places only.)
Determine the FW of the following engineering project when the MARR is 15% per year. Is...
Determine the FW of the following engineering project when the MARR is 15% per year. Is the project acceptable? Project Investment Cost $10,000 Expected life 5 years Market (Salvage) Value* -$1,000 Annual Receipts $8,000 Annual Expenses $4,000 * A negative market value means that there is a cost to dispose of an asset.
A project has an initial cost of $200,000 and uniform annual benefits of $35,000. At the...
A project has an initial cost of $200,000 and uniform annual benefits of $35,000. At the end of its 8-year useful life, its salvage value is $50,000. At a 10% interest rate, the net present worth of the project is approximately what amount? $30,250 $130,000 $10,050 $34,825
Compare alternatives A and B with the present worth method if the MARR is 10% per year. Which one would you recommend? Assume repeatability and a study period of 20 years $15,000 $45,000 Capital Inve...
Compare alternatives A and B with the present worth method if the MARR is 10% per year. Which one would you recommend? Assume repeatability and a study period of 20 years $15,000 $45,000 Capital Investment Operating Costs $4,000 at end of year 1 and increasing by $400 per year thereafter $4,000 every 5 years 20 years $8,000 at end of year 1 and increasing by $800 per year thereafter None Overhaul Costs Life 10 years Salvage Value $8,000 if just...
Quillen Company is performing a post-audit of a project completed one year ago. The initial estimates...
Quillen Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $244,230, would have a useful life of 9 years, zero salvage value, and would result in net annual cash flows of $46,700 per year. Now that the investment has been in operation for 1 year, revised figures indicate that it actually cost $228,895, will have a total useful life of 11 years, and will produce net annual cash...
Quillen Company is performing a post-audit of a project completed one year ago. The initial estimates...
Quillen Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $227,000, would have a useful life of 9 years, zero salvage value, and would result in net annual cash flows of $43,700 per year. Now that the investment has been in operation for 1 year, revised figures indicate that it actually cost $231,000, will have a total useful life of 11 years (including the year just completed), and...
Quillen Company is performing a post-audit of a project completed one year ago. The initial estimates...
Quillen Company is performing a post-audit of a project
completed one year ago. The initial estimates were that the project
would cost $224,000, would have a useful life of 9 years, zero
salvage value, and would result in net annual cash flows of $44,900
per year. Now that the investment has been in operation for 1 year,
revised figures indicate that it actually cost $228,000, will have
a total useful life of 11 years (including the year just
completed), and...
Determine the FW of the following engineering project when the MARR is 17% per year. Is the project acceptable? Investment cost Expected life Market (salvage) value Annual receipts Annual expenses Proposal A $9,500 6 years -$1,100 $7,000 $4,000 A negative market value means that there is a net cost to dispose of an asset. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 17% per year. The FW of the following engineering...
Compare alternatives A and B with the present worth method if the MARR is 10% per year. Which one would you recommend? Assume repeatability and a study period of 20 years $15,000 $45,000 Capital Investment Operating Costs $4,000 at end of year 1 and increasing by $400 per year thereafter $4,000 every 5 years 20 years $8,000 at end of year 1 and increasing by $800 per year thereafter None Overhaul Costs Life 10 years Salvage Value $8,000 if just...
Quillen Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $244,230, would have a useful life of 9 years, zero salvage value, and would result in net annual cash flows of $46,700 per year. Now that the investment has been in operation for 1 year, revised figures indicate that it actually cost $228,895, will have a total useful life of 11 years, and will produce net annual cash...
Quillen Company is performing a post-audit of a project
completed one year ago. The initial estimates were that the project
would cost $224,000, would have a useful life of 9 years, zero
salvage value, and would result in net annual cash flows of $44,900
per year. Now that the investment has been in operation for 1 year,
revised figures indicate that it actually cost $228,000, will have
a total useful life of 11 years (including the year just
completed), and...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago