Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

engineering economy. please answer Problem 2, thank you! PROBLEM #1 a) $2,000 had been initially invested in a small business. The income from the investment

engineering economy. please answer Problem 2, thank you!

image text in transcribed

PROBLEM #1 a) $2,000 had been initially invested in a small business. The income from the investment at the end of one year was $8,000. What was the rate of return after one year? b) $7,000 was the net cost of aggressive expansion in the second year. What is the rate of return equation using a classic present worth method? c) How many roots does the equation have? d) Solve for positive real roots (ROR values) at the end of year 2. e) Write the composite rate of return relation using the net-investment technique. f) Solve for the composite rate of return if the reinvestment rate was 30%. Problem #2 The one best alternative must be chosen for a project. The initial project starting costs are shown below. The company's MARR is 5%. Using a 5-year study period, determine which proposal should be selected by a) the AW method, and b) the incremental rate-of- return method. Project Proposal Alternatives $15,000 Start-up costs $20,000 $25,000 $3,000 Annual income $5,000 $7,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing For Business Clause-Based Requirements

Authors: Robin Briar

1st Edition

B09PMDJ956, 979-8796274712

More Books

Students also viewed these Accounting questions

Question

Strategic plan: Explain the importance of the strategic plan.

Answered: 1 week ago

Question

identify current issues relating to equal pay in organisations

Answered: 1 week ago