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I need the answers very fast , i do not have time Manama Inc. is considering two mutually exclusive projects A and B. The initial
I need the answers very fast , i do not have time
Manama Inc. is considering two mutually exclusive projects A and B. The initial investment and the estimates of the annual revenues and costs associated with each project presented in the below table. The economic life of the project will be 5-Year's period, and both projects carry same risk. Manama uses a discount rate of 10%. After considering the current economie situation Manama Inc. has ve - Tears period, and vou projects carry same TISK. Ivanama uses a discount rate of 10%. After considering the current economic situation Manama Inc. has set a maximum payback period of 4 years and minimum return on investment (ROI) 16%. Projects A Projects B Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs: 306,000 684,000 Inn nnnn Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating 450,000 216,000 61,000 360,000 108,000 60,000 138,000 48,000 costs 1. Calculate the payback period for each project. 2. Calculate the net present value for each project. 3. Calculate the simple rate of return for each product. 4. Which of the two projects (if either) would you recommend that Manama Inc. accept? Why? EXHIBIT 14B-1 Present Value of SI: Table Summary: Table of present values of $1. Periods are listed in first column: 1-30 and 40. Colu 25 percent. Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 189 1 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.84 2 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.71 3 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 0.712 0.693 0.675 0.658 0.641 0.624 0.6 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 0.636 0.613 0.592 0.572 0.552 0.534 0.51 5 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.593 0.567 0.543 0.519 0.497 0.476 0.456 0.43 6 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.535 0.507 0.480 0.456 0.432 0.410 0.390 0.37 7 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.425 0.400 0.376 0.354 0.333 0.31 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0.376 0.351 0.327 0.305 0.285 0.26 9 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.391 0.361 0.333 0.308 0.284 0.263 0.243 0.22 10 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.352 0.322 0.295 0.270 0.247 0.227 0.208 0.15 4 8 EXHIBIT 14B-2 Present Value of an Annuity of Si in Arrears: Table Summary: Table of present values of an annuity of Si in arrears. Periods are listed in first column: from 4 percent to 25 percent. Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18 1 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.3 2 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.713 1.690 1.668 1.647 1.626 1.605 1.585 1.: 3 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.444 2.402 2.361 2.322 2.283 2.246 2.210 2. 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.102 3.037 2.974 2.914 2.855 2.798 2.743 2. 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.696 3.605 3.517 3.433 3.352 3.274 3.199 3.1 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.231 4.111 3.998 3.889 3.784 3.685 3.589 3. 7 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.712 4.564 4.423 4.288 4.160 4.039 3.922 3.8 6.733 6.463 6.210 5.971 5.747 5.535 5.335 5.146 4.968 4.799 4.639 4.487 4.344 4.207 4.6 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.537 5.328 5.132 4.946 4.772 4.607 4.451 4.3 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.889 5.650 5.426 5.216 5.019 4.833 4.659 4. 4 5 6 o 8 9 10 Step by Step Solution
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