A mining property is offered for sale for P5.7 M. On the basis of estimated production, an annual return of P800,000 is foreseen for a period of 10 years. After 10 years, the property will be worthless. What annual rate of return is in prospect?
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- An equipment which can be purchase for P700,000 is expected to generate a net cash flow of P200,000 annually for five years which is the estimated service life of the equipment. Its salvage value at the end of the service life is estimated to be 5% of its purchased cost. a. What is the rate of return of the initial investment? b. What is the simple pay-back period? c. If the company's minimum attractive rate of return(MARR) is set at 15%, using NPW is this investment acceptable? d. What is the internal rate of return(IRR) of this machine? e. What is the external rate of return(ERR) at the 15% MARR?A property produces a first year NOI of $80000 which is expected to grow by 2.0 percent per year. If the property is expected to be sold in Year 10, what is the expected sale price based on a terminal capitalization rate of 5.5 percent applied to the 11 year NOI? O $2,216,353 $2,039,045 O$1,773,083 O $1,329,812 O $1,861,737A project is estimated to cost P110,000, last 8 years and have a P15,000 salvagevalue. The annual gross income is expected to average P24,000 and annualexpenses, excluding depreciation, will total P6,000. If capital is earning 10% beforeincome taxes, determine if this is a desirable investment using A. Present Worth Method :B. Future Worth MethodC. Payback Period in years
- The exit price of an asset is RO 10,000 and the cost of disposal of the asset is RO 150. The asset is estimated to yield a future cash flow of RO 1000 per annum for the next five years. The Net realizable value of the asset under current cost accounting is a. RO 10,850 b. RO 11,150 c. RO 9500 d. RO 9850Note: Give me solution in Excel otherwise leave it. Thank you What is the payback period at an interest rate of 10% per year for an asset with initial cost of $ 16,000 ; salvage value of $ 18,000 whenever it is sold and annual revenue of $ 2,000 per year?A mining company brings up a land purchase project for 61,000 TL in order to extract coal.The annual net income of the coal mine is estimated at TL 20,000.At the end of the 10-year useful life, the company is obliged to spend 150.000 TL to make the land suitable for agriculture. Is the project suitable since the annual interest rate is i=10%? Solve according to Net Present Value analysis.
- Using DBM, when is the t year with a book value of P5,653 if the asset is bought at a price of P19,044.00 and a salvage value of P2,193.00? The economic life is expected within 7 years.Supposed amarriedcouple wishesto acquire aluxurious condominium in Tagaytay.Thiscan be acquired by a downpayment of P700,000and a yearly payment of P150,000 at the end of each year for a period of 10 years, starting at the end of 5 years from the date of purchase. If money is worth 15% compounded annually, what is the cash price of the property?Alternative X has a first cost of 19000 an annual operating cost of 3500 , and a salvage value of 5325 after 18 year. Alternative Y has a first cost of 20000 an annual operating cost of 3600 , and a salvage value of 7800 after 18 year. If MARR of 18% per year, approximately what is the PW of each alternative?
- A mining firm is offered for sale for Php 5.7M. On the basis of estimated production, an annual rate of return is expected to be 6.7% in which after 10 years, the firm will be worthless. What annual payment is needed?A piece of equipment has a first cost of $75000, a maximum useful life of 4 years, and a market (salvage) value described by the relation Sk = 60000 – 10500k, where k is the number of years since it was purchased. The AOC series is estimated using AOC = 30000 + 4500k. The interest rate is 9% per year. When should the company replace this asset?What is the value of the FW for an alternative which is at an interest rate of 8% per year if first cost is -23000, annual operating cost is -4000 per year, Salvage value 3000 and life is 3 years?
