Mary, a project manager for ABC Ic., is reviewing a product quality improvement project. She has determined that the project's Annual Worth of $2,797. for a period of 8 years. She now has to calculate the IRR for the project but unfortunately she has lost some information about the cash flows She knows only that the project has: • a 8-year project life with an initial cost of $300,000. • a set of equal revenue cash flows occurred at the end of each year for 8 years, and • MARR used for calculation the Annual Worth was 8%. Find the annual revenue first and then calculate the IRR for the project = ? 14% < IRR (i*) < 15% 13% < IRR (i*) <14% 10% < IRR (i*)<11% 9% < IRR (i*) < 10% 8% < IRR (i*) < 9%

Mary, a project manager for ABC Ic., is reviewing a product quality improvement project. She has determined that the project's Annual Worth of $2,797. for a period of 8 years. She now has to calculate the IRR for the project but unfortunately she has lost some information about the cash flows She knows only that the project has: • a 8-year project life with an initial cost of $300,000. • a set of equal revenue cash flows occurred at the end of each year for 8 years, and • MARR used for calculation the Annual Worth was 8%. Find the annual revenue first and then calculate the IRR for the project = ? 14% < IRR (i) < 15% 13% < IRR (i) <14% 10% < IRR (i)<11% 9% < IRR (i) < 10% 8% < IRR (i*) < 9%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

YOUR FATHER PLANS TO INVEST P500,000.00 IN AN AUTO WASHING MACHINE WITH THE FF DATA: (20 PTS.) WASHING CAPACITY- 12 CARS/HR AT 8HRS OPERATION/DAY FOR 6DAYS A WEEK AND 50 WEEKS/YEAR CAR WASH CHARGE-P25/CAR MANUAL LABOR COST ( 2 WORKERS)-P25/HR PER WORKER PLUS A PAID VACATION BENEFITS OF 2 WEEKS PER YEAR MAINTENANCE COST-P8500.00/MONTH DESIRED RATE OF RETURN ON THE CAPITAL-20% PRESENTLY YOUR FATHER IS EARNING P25,000.00/MONTH AS A REGULAR EMPLOYEE AND WANTS TO CONCENTRATE ON THIS BUSINESS AND WANT TO RECOVER HIS INVESTMENT IN 5 YEARS. USING ROR AND AW METHOD OF ECONOMY STUDIES, SHOULD YOUR FATHER PROCEED WITH THE INVESTMENT?
The required investment cost of a new, large shopping center is $51 million. The salvage value of the project is estimated to be $18 million (the value of the land). The project's life is 12 years and the annual operating expenses are estimated to be $16 million. The MARR for such projects is 15% per year. What must the minimum annual revenue be to make the shopping center a worthwhile venture? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 15% per year. To make the shopping center a worthwhile venture, the minimum annual revenue must be $ million per year. (Round to three decimal places.) Reference Discrete Compounding; i=15% Single Payment Uniform Series Compound Amount Compound Sinking Fund Capital Recovery Factor Present Amount Present Factor Worth Factor Factor Worth Factor Factor To Find F To Find P To Find F To Find P To Find A To Find A Given P Given F Given A Given A Given F Given P N FIP PIF FA PIA AIF AIP 1.1500 0.8696 1.0000…
Click the icon to view the alternatives description. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. The FW of the Alternative 1 is $ (Round to the nearest dollar.) Ĵ Today, you have $40,000 to invest. Two investment alternatives are available to you. One would require you to invest your $40,000 now, the other would require the $40,000 investment two years from now. In either case, the investments will end five years from now. The cash flows for each alternative are provided below. Using a MARR of 10%, what should you do with the $40,000 you have? Click the icon to view the alternatives description. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. The FW of the Alternative 1 is S. (Round to the nearest dollar.)
Determine the IRR for this project
Mary, a project manager for ABC Ic., is reviewing a product quality improvement project. She has determined that the project's Annual Worth of $3,396. for a period of 8 years. She now has to calculate the IRR for the project but unfortunately she has lost some information about the cash flows. She knows only that the project has: a 8-year project life with an initial cost of $400,000. a set of equal revenue cash flows occurred at the end of each year for 8 years, and • MARR used for calculation the Annual Worth was 8%. Find the annual revenue first and then calculate the IRR for the project = ? O 14% < IRR (i*) < 15% O 13% < IRR (i*) < 14% O 10% < IRR (i*) < 11% O 9% < IRR (i*) < 10% O 8% < IRR (i*) < 9%
Question 1 A corporate jet costs $1,350,000 and will incur $200,000 per year in fixed costs (maintenance, licenses, insurance, and hangar rental) and $277 per hour in variable costs (fuel, pilot expense, etc.). The jet will be operated for 1,200 hours per year for five years and then sold for $650,000. The MARR is 15% per year. What is the EUAC of the jet? $838,710 $1000.45 $445.66 $1500
You have received the proposal to invest $1,000,000 in exchange for receiving income of $75,000 at the end of the first month that would decrease 0.3% each month starting from the 2nd month. Expenses are estimated at $25,000 at each end of the month, starting from the 1st month. Assume that the proposal will last 5 years and that the minimum acceptable rate of return (m) is 1.5% per month. What does the Present Value criterion recommend? Show your work. If flow patterns are found (uniform, arithmetic, exponential), use factors.
please answer all with complete solution and cash flow diagram,,, thank you....
Tim wants to know the value of a real estate company he's planning to invest with. He expects a cash return of BD1500 at the end of first year, BD 3250 at the end of third year, and 12500 at the end of fifth year when the property is sold. Determine the value of an asset with 15% required return.
Q15. For the cash flows shown, determine the incremental cash flow between machines B and A (a) in year 0, (b) in year 3, and (c) in year 6. Machine First Cost, $ A B -13,000 -25,000 AOC, $ per Year -1,300-400 Life, Years Salvage Value, $ 5,000 6,000 3 6 a) The incremental cash flow between machines B and A in year 0 is $ . b) The incremental cash flow between machines B and A in year 3 is $. c) The incremental cash flow between machines B and A in year 6 is $ .
A company is considering establishing a new machine to automate a meatpacking process. The machine will save $59,350 in labor annually. The machine can be purchased for $271,296 today and will be used for 8 years. It has a salvage value of $11,071 at the end of its useful life. The new machine will require an annual maintenance cost of $9,594. The corporation has a minimum rate of return of 9.4%. Calculate the NPW.
Question Number 5 You will deposit money into a bank account according to the following schedule: Today 4 year from today 6 years from today 8 years from today 12 years from today $182,000 $78,000 $136,000 $115,000 $94,000 After 12 years from today, what will be the purchasing power of the money in your bank account, expressed in today's dollars?. You bank pays interest at 7.000% per year, compounded annually. Inflation is expected to be 4.520% per year.