A firm is considering the following alternatives, as well as a fifth choice: do nothing. Each alternative
Question:
A firm is considering the following alternatives, as well as a fifth choice: do nothing.
Each alternative has a 5-year useful life. The firm's minimum attractive rate of return is 8%. Which alternative should be selected?
Transcribed Image Text:
2 3 Initial cost $100,000 $130,000 $200,000 $330,000 Uniform annual 26.38 38.78 47.48 91.55 net income ($1000s) Computed rate 12% 10% 15% 6% of return
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 66% (12 reviews)
Since there are alternatives with ROR 8 MARR Alternative 3 may be immediately rejected as wel...View the full answer
Answered By
Abigael martinez
I have been a tutor for over 3 years and have had the opportunity to work with students of all ages and backgrounds. I have a strong belief that all students have the ability to learn and succeed if given the right tools and support. I am patient and adaptable, and I take the time to get to know each student's individual learning style in order to best support their needs. I am confident in my ability to help students improve their grades and reach their academic goals.
5.00+
1+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Economics questions
-
A firm is considering the following two separate options. Option1. Build either a mini theme park or a 10 unit chalet on a parcel of land located by the beach side area. Adequate funding is...
-
A firm is considering three mutually exclusive alternatives as part of a production improvement program. The alternatives are: The salvage value at the end of the useful life of each alternative is...
-
A particular securitys equilibrium rate of return is 8 percent. For all securities, the inflation risk premium is 1.75 percent and the real risk-free rate is 3.5 percent. The securitys liquidity risk...
-
Prepare a forecast of after-tax cash flows for fiscal 2022, 2023, and 2024 for each of the two financing proposals, assuming the following: Revenue increases 5% annually. EBITDA margin is 15%. ...
-
The path of a diver is modeled by f(x) = - 4/9 x2 + 24/9 x + 12 where f (x) is the height (in feet) and x is the horizontal distance (in feet) from the end of the diving board. What is the maximum...
-
The following balance sheet and income statement data were taken from the records of Harbaugh Auto Supply for the year ended December 31, 2012: The company sells goods and provides services. All...
-
Sauer Energy purchased land in fee for $100,000. The fair market values of the surface and mineral rights were determined by a qualified appraiser as follows: Prepare a journal entry to record the...
-
Use the Underwood equations to estimate the minimum external-reflux ratio for the separation by distillation of 30 mol% propane in propylene to obtain 99 mol% propylene and 98 mol% propane, if the...
-
A scout leader is going to pair a new member with one of the existing 15 troop members. Five of the boys love to go camping, ten like to fish, three enjoy archery, twelve like to go hiking, and one...
-
This exercise consists of two parts. Part A. The following table summarizes the assets of the Rocker Division (a separate cash-generating unit) at December 31, Year 5, prior to testing goodwill for...
-
Three mutually exclusive alternatives are being considered. Each alternative has a 20-year useful life with no salvage value . If the minimum attractive rate of return is 7%, which alternative should...
-
Find the best alternative using incremental IRR analysis. A B D Initial cost $2000 4000 5000 3000 Annual benefit 800 1300 500 400 Salvage value 1400 2000 1500 3000 Life, in years 6 4 MARR required 6%...
-
As an airplane?s brakes are applied, the nose wheel exerts two forces on the end of the landing gear as shown. Determine the horizontal and vertical components of reaction at the pin C and the force...
-
After the Board expressed concern about the business' financial position, Associate Enterprises management team provided the following information: Month 1 Month 2 Month 3 Sales Units 12,000 14,000...
-
Enviry Company, US-based company, has initiated biodegradable plastic by using agar to make packaging products to save the environment. Agar is a seaweed-based material used traditionally in Japanese...
-
Identify and explain two of the four of Bass's factors associated with transformational leadership. Give examples from your own experiences or observations that illustrate the use of these factors
-
There are factors that can lead leaders to unethical behaviour. List and discuss three psychological factors that can compromise leaders' ethics.
-
Cash Accounts Receivables Inventory Other Current Assets Total Current Assets Long Term Investments Balance Sheet The Company Inc. ($000s) 194,200 185,800 Accounts Payable 1,090,400 242,200 Short...
-
Floors are purchased for a ____. a) Discount b) Premium c) Market rate d) None of the above
-
A researcher reports a significant two-way between-subjects ANOVA, F(3, 40) = 2.96. State the decision to retain or reject the null hypothesis for this test.
-
Evaluate the integral. fx (x + x) dx
-
If the interest rate is 10.5%, what is the twoyear discount rate?
-
State the amount accumulated by each of the following present investments: (a) $6,000 in 8 years at 6% compounded annually. (b) $1,550 in 12 years at 5% compounded annually. (c) $8,000 in 32 years at...
-
Read the Wall Street Journal over a oneweek period and identify the business investment news using one of the categories(1) new products or product expansion, (2) equipment and process selection, (3)...
-
In developing a budget, which of the following should be considered? I. Balance sheet II. Chart of accounts III. Expenses from the current/past year IV. Purchasing contracts V. Physician compensation...
-
JOIICS SUIT SHOPSales BudgetQuarter 1Quarter 2Quarter 3Expected Sales Units150175Sales Price per Unit$250250$250otal Sales Revenue37,500$ JOIICS SUIT SHOPSales BudgetQuarter 1Quarter 2Quarter...
-
Which of the following statements is true concerning foreign income tax paid? Question 39Select one: a. If a taxpayer takes a subtraction on their Oregon return, then the subtraction is included as...
Study smarter with the SolutionInn App