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- 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%An investment made with an expenditure of $160,000 at the start of the project. The income from the project at the end of each year for 5 years is $80000, $90000, $85,000, $75,000 and $70,000. He made an investment of $20000 again at the end of 2nd year. The maintenance will cost 1500$ for the first year and it increments by 500$ for the second year and third year onwards it increments by 1000$. The salvage value is 70,000$. Draw a CFD for the project and give the analysis of the project based on the CFD.A project requires an initial investment of $150,000, to be depreciated straight-line over 3 years to an expected salvage value of $0. In addition, working capital will increase during the life of the project and amount to 20% of next year’s revenues, with the investment in working capital to be made at the beginning of each year. The project will generate $150,000 additional annual revenues and $85,000 additional annual expenses. The tax rate is 25%. Cost of capital amount to 7,5%. Please calculate the Net Present Value of the project and show your calculations. Would you recommend the investment? Please explain your advice.
- A piece of equipment has an initial cost of $125,000. The annual 0&M costs are $31,000 and increase $1000 per year. The annual revenue is $45,000 and increase $1,500 per year. The equipment has a life span of 8 years and a salvage value of $30,000. Based on a MARR of 5%, determine the following: a. If the project is viable based on Net Present Worth. b. Determine the amount the annual revenue has to be increased to make the project viable. c. Determine the amount the salvage value has to increase to make the project viable.A project requires an initial investment of $45,000, has a salvage value of $12,000 after six years, incurs annual expenses of $6,000, and provides an annual revenue of $18,000. Using a MARR of 9%, determine the CR (Capital Recovery) of this project.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.
- An investment of $20,000 for a new condenser is being considered. Estimated salvage value of the condenser is $5,000 at the end of an estimated life of 6 years. Annual income each year for the 6 years is $8,500. Annual operating expenses are $2,300. Assume money is worth 15% compounded annually. Determine the external rate of return and whether or not the condenser should be purchased.A posed capital expenditure project involves purchasing and installing new equipment. The equipment will cost $40.000, with an addiuonal S2.00 e for delivery. Installation is estimated to be $5000. The equipment has an expected life of 6 years and estimated salvage value of 520,000. The prctrequires an additional working capital investment of $10.000. The project revenues are forecast at $30.000 per year and cash expenses are estimated at $10.000 per year. The firm has a 35 marginal tax rate and a 10is weighted average cost of capital. Annual depreciation is expected t increase by $7,833.33 per year, assuming simplified straight-line depreciation. Calculate the one-time, end of project cash fiows from this propose project. $23,000 $30,000 O$13,000 O $20,000 None of the listed items is correctAn elective project is currently under review. It requires an initial investment of $116,000 for equipment. The profit is expected to be $28,000 each year, over the 6-year project period. The salvage value of the equipment at the end of the project period is projected to be $22,000. Assume a MARR of 10%. Find an IRR for this project.
- A machine has a first cost of P50,000 with interest rate of 10% annually. Expected salvage value after 10 years is P5,000. Find the total depreciation after 9 years using sinking fund method.The company is considering to invest in a project with following information: - The total investment of the project 2500 monetary unit. Cost of purchasing fixed assets is 2,350monetary unit, the rest of the capital to buy the net assets at the beginning of the second year. The funding for fixed assets in the early first year and the early second year, respectively is 1350 and 1000 monetary unit. - Straight line depreciation within 6 years of the project. When the project is finished, the liquidation assets is 50 monetary unit. - Net working assets are revoked when finished project. - When the project goes into operation period (from the second year), generating a revenue of 3, 500 monetary unit yearly, the variable costs are 500 per year, annual fixed costs excluding depreciation and interest 200 monetary unit - The corporate income tax rate is 25%. The discount rate of the project is 16% per year. The owners are considering to borrow money from banks to finance the project, namely to…A special purpose machine toolset costs $20,000. The toolset will be financed through a bank loan of $10,000 repayable in two equal annual payments at 10% compounded annually. The toolset is expected to provide annual savings of $30,000 for two years and is to be depreciated by a 3-year MACRS method. This special purpose toolset will require annual O&M maintenance of $5000 per year. The salvage value at the end of two years is expected to be $8,000. Assuming a marginal tax rate of 25% and a MARR of 15% find the following: a) Find yearly depreciation, any annual interest payments, the taxable income for each year, and then calculate the yearly taxes. b) Identify any gain or loss from the salvage of the asset at the end of the 2nd year; calculate any additional taxes or credits for the 2nd year.