Five alternatives (A, B, C, D, and E) are compared. The present worth (PW) and internal rate of return (IRR) values for these altenatives are ($2,500, 12.42%) for A; ($570, 12.85%) for B; ($1,300, 1.91%) for C; ($2,300, 12.54%) for D; and ($950, 12.95%) for E. Alternative A has the lowest capital investment, followed by B, C, D, and then E. If the alternatives are mutually exclusive, which one should be selected when the minimum oattractive rate of return (MARR) is 10%?
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- Five alternatives (A, B, C, D, and E) are compared. The present worth (Pw) and internal rate of return (IRR) values for these alternatives are ($1,500, 13.42%) for A; ($570, 12.85%) for B; ($1,300, 11.91%) for C; ($2,300, 12.54%) for D; and ($2,950, 12.95%) for E. Alternative A has the lowest capital investment, followed by B, C, D, and then E. If the alternatives are mutually exclusive, which one should be selected when the minimum attractive rate of return (MARR) is 10%? O a. Alternative B O b. Alternative D O C. Alternative c O d. Alternative E O e. Alternative AThe five alternatives shown below are being evaluated by the rate of return method. Incremental ROR when compared with alternative B C D 27.3 9.4 35.3 25 E 1.5 38.5 24.4 Alt B D E Initial Invest, $ ROR vs DN,% 9.6 15.1 -25,000 -35,000 -40,000 -60,000 -75,000 13.4 25.4 20.2 A --- --- (d) Alt D 46.5 27.3 6.8 ... If the projects are mutually exclusive and the Minimum Attractive Rate of Return is 9.2% per year, the best alternative is: (a) Alt A (b) Alt B (c) Alt C (e) Alt EGiven the financial data for four mutually exclusive alternatives in the table below, determine the best alternative using the incremental rate of return (∆RoR) analysis. MARR =10%.
- Investment A has a 8.25% internal rate of return and Investment B has a 10.0% internal rate of return. The two investments are mutually exclusive. If the required return is 6.50%, which of the following is a true statement? a) Investment A should be chosen over Investment B. b) Both Investment A and Investment B should be chosen. c) Investment B should be chosen over Investment A. d) It is not possible to know which of the two investments is best with the given information.You have data on the following assets: asset Expected return Standard DeviationA 15.0% 21.0%B 15.5% 20.2%C 18.0% 25.0% Calculate the coefficient of variation for each of the assets. Which one is the best investment option?Consider the following payoff table that represents the profits earned for each alternative (A, B, and C) under the states of nature S1, S2, and S3. Using the Laplace criterion, what would be the highest expected payoff? S1 S2 S3 A $100 145 120 B $75 125 110 C $95 85 60
- Consider two assets, A and B. A earns +4%, -5%, or +3%, in scenarios 1, 2, and 3. B earns -5%, +3%, or +4%, in scenarios 1, 2, and 3. Each scenario is equally likely. Compute the expected rates of return and SD for each asset, A and B. Now, consider a portfolio of assets A and B called AB, where the investor holds fraction 59% of his portfolio in A and fraction (1-59%) in B. Compute the standard deviation of AB. Compare the new standard deviation to that of each asset's individual standard deviation. What was the change in standard deviation between asset A and portfolio AB? StDev(AB) - StDev(A). Report answer to the four decimal place.Calculate the Payback period, Accounting Rate of Return and the Net Present Value (using a 17% discount factor) and a fair approximation range of the Internal Rate of Return for the data presented belowABC Company is using net present value analysis at various discount rates in order to determine the internal rate of return of an investment proposal. NPV using a discount rate of 12 percent = $2,095 NPV using a discount rate of 14 percent = $(2,108) By interpolating these results, an approximate internal rate of return on the investment is estimated to be percent. (Round your answer to the nearest whole percentage.)
- 1. Determine the Net present value of the investment. (use 3 decimal places for the PV factor) 2. Determine the Proposal's internal rate of return 3. Determine the Payback period (3 decimal places)The table below shows a comparison between three mutually exclusive alternatives. If the capital investment of A < B < C, and the MARR is 15%, arrange these alternatives based on decreasing Annual worth (From the Highest annual worth to the Lowest annual worth)? Comparison A C B-A C-A | C-B RR% 195 16.7 17.4 16.2 15.4 17.6 О а. ВСА O b. CAB О с. СВА O d. BAC company's required rate of return is 10% and, in using the present worth method, a project's net present value is zero, this indicates that the O a. project earns a rate of return of 10%. O b. project's rate of return exceeds 10%. C. project earns a rate of return of 0%. d. project's rate of return is less than the minimum rate required.Net Present Value Method, Present Value Index, and Analysis for a service company Continental Railroad Company is evaluating three capital investment proposals by using the net present value method. Relevant data related to the proposals are summarized as follows: Ramp Computer Facilities Network $423,052 Amount to be invested Annual net cash flows: Year 1 Year 2 Year 3 Year 1 2 3 4 5 6 7 8 9 10 6% Present Value of $1 at Compound Interest 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 10% 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 Maintenance Equipment $677,579 0.424 0.386 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 305,000 284,000 259,000 0.361 0.322 15% 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.327 0.284 0.247 220,000 198,000 176,000 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 $188,789 125,000 86,000 63,000