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...
-
For the following object distances and focal lengths of thin lenses in air, find the image distance and the magnification and state whether the image is real or virtual and erect or inverted: (a) s =...
-
The Busy B Company wants to store data about its employees skills. Each employee may possess one or more specific skills. In addition, several employees may have the same skill. The following facts...
-
Apricot Corporation distributes property ($125,000 basis and $150,000 fair market value) to its sole shareholder, Ellie. The property is subject to a liability of $200,000, which Ellie assumes....
-
Determine the reaction forces at the joints and the external torque applied to input link 2 of the four-bar linkage in the posture shown. For the constant angular velocity w2 = 180 rad/s, the known...
-
Games Galore has provided its condensed financial statements for the year ended December 31, 2016. The Controller has asked you to calculate liquidity, solvency, and profitability ratios that...
-
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%...
-
Add, subtract, or multiple, as indicated. Express your answer as a single polynomial in standard form. (2x + 5)(x + 2)
-
Explain why the actions taken by the CEO in relation to Worker X after the incident on 26 April were NOT appropriate. Notes: You are not required to suggest what actions should have been taken...
-
I am writing a paper and want to include a section on Ethical Communication. I don't want to use direct quotes, but want to paraphrase. How can I use APA format to cite article?
-
BYD sold a record number of electric vehicles (EVs) in December and consolidated its position as the world's largest seller of automobiles that run on non-fossil fuels, vindicating the faith placed...
-
SCENARIO: Sydney Pratt, an investor, joined hands with a well-known Italian Chef Antonio Bottura, to open the first Michelin Star Italian Fusion cuisine restaurant in Montreal. With the wealth and...
-
Gold Star Rice, Limited, of Thailand exports Thai rice throughout Asia. The company grows three varieties of rice-White, Fragrant, and Loonzain. Budgeted sales by product and in total for the coming...
-
Should budget increases be permitted when the auditor encounters unusual and time-consuming deficiencies?
-
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)...
-
is land Income Statement or Balance Sheet or Statement of Owner's Equity
-
Example 1.4B - Investment Portfolio One year ago, Mrs. Boyd divided her savings among four mutual funds as follows: 20% was invested in a bond fund, 15% in a money market fund, 40% in a Canadian...
-
(Individual or component costs of capital) Compute the cost of capital for the firm for the following: a. Currently bonds with a similar credit rating and maturity as the firm's outstanding debt are...
Study smarter with the SolutionInn App