The Pahang State Government is plan to provide a project to establish a large flood drainage culvert from the Chalet and RKT Homestay to Tasik Cini. The initial cost spent is RM 2,000,000 for the job and the cost and benefit items are shown in Table Q2(b). The MARR is 6% per year, and the project's life is 30 years. Evaluate this project based on; Table Q2(b): Cost and Benefit Cost and Benefit Items RM Right of way maintenance Major upkeep every six years, starting at the present time Annual benefit to the taxpayers 30,000 per year 50,000 135,000 (i) Conventional PW B/C ratio (ii) Conventional AW B/C ratio

The Pahang State Government is plan to provide a project to establish a large flood drainage culvert from the Chalet and RKT Homestay to Tasik Cini. The initial cost spent is RM 2,000,000 for the job and the cost and benefit items are shown in Table Q2(b). The MARR is 6% per year, and the project's life is 30 years. Evaluate this project based on; Table Q2(b): Cost and Benefit Cost and Benefit Items RM Right of way maintenance Major upkeep every six years, starting at the present time Annual benefit to the taxpayers 30,000 per year 50,000 135,000 (i) Conventional PW B/C ratio (ii) Conventional AW B/C ratio

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The construction of a bypass road needs a capital investment of $200,000 and $10,000 would be required each year for maintenance. The annual benefits to the project have been estimated to be $60,000. The study period(estimated life) of the project is 10 years. The MARR is set at 12%. a. What is the discounted payback period(in years)? b. Determine whether this is a good investment using Modified Benefit-Cost Ratio method with Present Worth(PW). c. Using Conventional Benefit-Cost Ratio method with PW but the MARR is set at 12%, is this project acceptable?
a. What should be your material cost for a project with MARR of 25% to make it into marginally acceptable and with an annual revenue of Php 10,000.00 for 8 years? Explain why, draw its cash flow diagram, and show your complete solutions. b. Now, if the said project has a salvage cost of Php 7,300.00 after 6 years, does it make a good investment opportunity? Explain why, draw its cash flow diagram, and show your complete solutions. c. Lastly, If the said project has an annual cost of Php 2,000.00, what is your capital investment? Explain why, draw its cash flow diagram, and show your complete solutions.
An officer has propose a marine reclamation project to prevent coastal erosion.In his analysis, the initial cost of the projectis RM 30 million with estimated maintenanceof RM 340,000 per year. If this projectimplemented, there will be increased activities of tourism and fisheries that can provide returns to the government and the population of RM 6.2 million per year. Determine the B/C ratio if MARR is 8% per annum? Assume the life of the investment is 20 years.
An energy specialist was asked to provide two plans for the engineering department of Makati Shangri-La. The first plan proposes an initial investment of P250,000 now with a salvage value of 20% of the first cost 20 years hence. Meanwhile, total operations and maintenance costs are estimated to be 6% of the initial cost per year. Taxes will be 2% of the first cost. The second plan proposes an initial investment of P190,000 now and P160,000 in eight years. The operations and maintenance costs are estimated to be P9,000 per year for the initial installation and P8,000 a year for the second instalment. At the end of 20 years, salvage value will be equal to 20% of the investments. Taxes will be 2% of the first cost. If money is worth 12%, which plan would you recommend?
A project has an initial investment of $45,000. This project needs an annual spending of $6,000 to generate an annual revenue of $18,000 for six years. Moreover, the project is expected to return $12,000 as a salvage value at the EOY 6. Calculate the AW using MARR of 10%
EncryptCo is considering a project with a $50,000 first cost that returns $12,000 per year. Assume that it will have a salvage value of $6500 at the end of its service life. The MARR is 12 percent. (a) Calculate the payback period for this project. (b) Calculate the discounted payback period for this project. Use Excel to do this and include the Excel output in your Assignment report.
A Project study for the construction of an engineering building are under consideration. Based on the study the cost of the building is P6,500,000 with a life of 30 years and a salvage value of P 400,000. Yearly maintenance and repair is P 18,000. If the yield of investment is 6%, determine the future worth cost.
A public project is being considered by a local government that will cost $10M at the start and SSM at the end of years 1 through 5. The project is estimated to earn $20M at the end of year 2, $30M at the end of years 3 and 4, and $20M at the end of year 5. Assuming i = 10%. What is the benefit-to-cost ratio for this project? Draw a cash flow diagram for the costs and benefits annually.
You are required to investigate the following project: The initial Investment at n=0 is $100,000. The project life is 10 years. Estimated annual operating cost : 34,000. The required minimum return on the investment :14%. The salvage value 8,000. What is the minimum annual revenues that should be generated to make the project worthwhile? 97842 52758 81921 45716 O O O O
A project study for the construction of an engineering building are under consideration. Based on the study the cost of the building is P6,500,000 with a life of 30 years and a salvage value of P400,000. Yearly maintenance and repair is P18,000. If the yield of the investment is 6%, determine the equivalent uniform annual cost. Select the correct response: 485,581.36 O 458,581.36 485,158.36 458,158.36
A power station in Al-Salmiya is expected to require an initial investment of 3.5 million KWD and Annual expenses of 95,000 KWD. The public benefits are valued at 400,000 KWD per year with an end-life market value of 300,000 KWD. The lifetime of this project is 25 years. If MARR is (ID/10)% per year, use the conventional benefit-to-cost ratio (B-C) method to determine if the project is economically acceptable or not
An Engineering Company is considering investing in a project. The estimated investment cost for this project amounts to Php 3,950,000. The projected maintenance costs and savings amount to Php 235,000 per year and Php 1,400,000 per year, respectively. The resale value of the project after the project's 10-year life is Php 2,350,000. What is the present worth of the project? Is it a sound investment opportunity?

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