A mining company plans to mine a beach for rutile. To do so will cost $15 million up front and then produce cash flows of $8 million per year for five years. At the end of the sixth year the company will incur shut-down and clean-up costs of $7 million. If the cost of capital is 12%, then what is the MIRR for this project?
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- Quèstion 12 A company has an export transaction with the payment term D/P T/R at 15 days after sight. Assuming the documents mailing period is 7 days, and the date of collection is July 1st (without considering the reasonable working hours of the bank). The date of payment is O July 1st July 8th O July 15th O July 22ndYou are considering an open-pit mining operation. The cash flow pattern issomewhat unusual since you must invest in some mining equipment, conductoperations for two years, and then restore the sites to their original condition.You estimate the net cash flows to be as follows: N Cash flow 0 -$1,600,0001 1,500,0002 1,500,0003 -700,000 What is the approximate rate of return of this investment?(a) 25%(b)38%(c) 42%(d)62%points A project requires an investment of $1,000,000 at year zero, It will pay $100,000 per year forever. What is the present worth of this project? The interest rate is 15% per year Da PW$1,333,333 1 PW 52,333,333 Oc PW-$1,666,667 Od PWS1.333,333
- Axis Corp. is studying two mutually exclusive projects. Project Kelvin involves an overhaul of the existing system; it will cost $52,500 and generate cash inflows of $25,000 per year for the next 3 years. Project Thompson replaces the existing system; it will cost $265,000 and generate cash inflows of $61,000 per year for 6 years. Using a(n) 9.13% cost of capital, calculate each project's NPV, and make a recommendation based on your findings. The NPV of project Kelvin is $ (Round to the nearest cent.)Question 1 A design firm is considering multiple independent projects for the upcoming quarter. For a MARR of 6.5% per quarter. What is your recommendation to the company based on a PW analysis? Project Initial Payment Monthly Costs (Today) A $1,500,000 $170,000 B $245,000 $200,000 C $300,000 $150,000 Payments are inflows for the design firm. Costs are outflows for the design firm. Payment at month 12 of $1,000,000 Costs at month 9 of $100,000 None Final Payment (At end of project) $3,000,000 Project Length Other Cash flows 2 years $3,000,000 18 months $4,000,000 30 monthsQuestion 10: Consider the following cash flow profile and assume MARR is 12%/year. End of Year 1 2 3 Cash Flow -1000 3400 -5700 3800 a. What does Descartes' rule of signs tell us about the IRR (s) of this project? b. What does the Norstrom's criterion tell us about the IRR (s) of this project? c. Determine the ERR for this project. Is this project economically attractive?
- Question 3 A project with the following costs are under consideration to determine its profitability. Using the IRR comparison, and an annual MARR of 10% compounded semiannually, determine if the project should be executed First cost $45,000 Semiannual operating cost $10,000 Semiannual income $20,000 Salvage value $20,000 Life in years 4 years Oa. IRR = 17% semiannual Ob. IRR= 18.7% semiannual O IRR = 16.9% semiannual Od. IRR 15.3% semiannualRetainer 0 1 Expenses 2 Revenue N Years How much can you afford to spend on the first year expenses on a project with the above cash flow?, given; Your MARR is 10.00%, the client has given you a retainer of $5,700, annual revenues are expected to be $2,750, the external rate of return required for this project is 19.5% and the entire project will last 8 years. (Round your answer to the nearest penny)An engineering firm has identified five ways to cut costs in its main office. Only one of the options can be implemented, however, since each involves significant training time for staff engineers. Data are provided in the table. Each option has a lifetime of seven years, and the firm sets a MARR at 15%. Option A B C D E Capital cost ($ million) 2.713 0.375 1.650 0.088 0.950 Annual cost ($ million/yr 0.093 0.275 0.132 0.147 0.228 Annual benefit ($ million/yr) 0.890 0.288 0.841 0.312 0.505 a) Solve by present worth analysis. b) Solve by annual cash flow analysis. c) Solve by incremental benefit-cost ratio analysis. d) Solve by an incremental rate of return analysis using the full detailed procedure
- -Two alternatives are shown in the table below. If the MARR is 20%, which alte mative should be selected and why? Remember to show your work!) (Estimated Rasponse Times for Awarage Student: 7 minutes) Year C C Altemative A $3.000) $1,200 $1,300 $1,300 Alemative B $1.500 $1.500 $1,500 a. Choose Altemative B because the incremental rate of retum is 18.22%, which is less than the MARR, therefore the more expensive aftemative should be selected b. Choose Altemative B because it has an IRR of 11.25% where as Alternative A only has an IRR of 9.70% c. Choose Altemative A because the incremental rate of retum is 1.54%, which is less than the MARR, therefore the cheaper alternative should be selected d. Choose Altemative A because the incremental rate of retum is 18.22%, which is less than the MARR, therefore the cheaper altemative should be selected e. Choose Altemative B because the incremental rate of retum is 1.54%, which is less than the MARR, therefore the more expensive altemative should…Brand A B 5:21 PM C D 2 years 3 years $13 4 years $17 5 years Which brand should the engineer select if the MARR is 9% a year? Cost m October 7, 2023 17:17 $7 2. An electrical engineer has to choose one brand of light bulbs among four available brands. The following information are available; lifetime $9 VPN G 4G+ LTE 22 8 0(a) You are trying to decide the plant size for a new chemical production process. By considering three alternative plant sizes, estimate the minimum plant size to achieve a 14% Discounted Cash Flow rate of return using the data given in TABLE Q2 (When choosing alternative plant sizes, it is suggested to use +50,000 t y') TABLE Q2 Current capital cost of a 100 000 t y1 plant Construction time €160 million 1 Net income Plant life Plant scale factor year 400 € per tonne 5 years 0.67