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An alternative has the following cash flows: Benefits of $30,000 per year, Disbenefits of $14,000 per year, Initial cost of $300,000 and M&O costs of
An alternative has the following cash flows: Benefits of $30,000 per year, Disbenefits of $14,000 per year, Initial cost of $300,000 and M&O costs of $10,000 per year. If the alternative has an infinite life and the interest rate is 10% per year, the B/C ratio is closest to: Select one: a. 2.50 b. 0.32 C. 0.75 d. 0.40 Gama industry has purchased an injection molding machine at a cost of $100,000. The machine's useful life is estimated at 8 years. The accounting department has estimated the capital cost for this machine at about $25,455 per year. If your firm's MARR is 20%, how much salvage value do you think the accounting department assumed at the end of 8 years? Select one: a. $12,000 b. $9,000 c. $10,000 d. $11,000 When the risk-free return is 3.5%, what is the cost of equity capital for a company whose stock has a historical beta factor of 0.92 and the security market indicates that the premium above the risk- free rate is 5%? Select one: a. 0.066 b. 0.081 C. 0.011 d. 0.061 Assume you make a deposit of 7,500 JD now into a saving account that pays 12% per year, compounded quarterly. If you want to know the total amount after 2 years, the value of interest rate (i) you should use in the F/P factor is: Select one: a. 3% b. 24% c. 12% d. 4%
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