Question
Two alternatives, Alpha and Beta, have the net cash flow (NCF) and salvage value (SV) profiles shown in the table below for their first cycles.
Two alternatives, Alpha and Beta, have the net cash flow (NCF) and salvage value (SV) profiles shown in the table below for their first cycles. Both alternatives can be repeated; however, the cash flow profiles and salvage value will change. Renewal of Alpha will cost 50 percent more for the initial investment (i.e., first cost will be $150,000 for the second cycle). Salvage values are adjusted based on the new first cost within each cycle. Further renewals of Alpha will cause the initial investment to increase 50 percent over the previous cycle. Annual revenues for Alpha are expected to continue increasing $10,000 per year indefinitely. Renewals of Beta will cost 60 percent more for the initial investment for each renewal. Salvage values for each cycle are adjusted based on each cycles initial cost. Annual revenues for Beta are expected to continue increasing at $10,000 per year indefinitely.
End of year | Alpha NCF | Alpha SV (% if first cost) | BETA NCF | Beta SV (% if first cost) |
0 | -$100,000 | 100% | -$160,000 | 100% |
1 | $50,000 | 50% | $80,000 | 62.5% |
2 | $60,000 | 20% | $90,000 | 25% |
3 | $70,000 | 0% | $100,000 | 12.5% |
**specify the complete set of cash flows for each of the following planning horizons, 2 years, 3 years, 4 years, 5 years, and 10 years** Answers need to be in this form:
a) 2 years, Cash flows =
EOY | Alternative Alpha | Alternative Beta |
0 | -100,000 | -160,000 |
1 | 50,000 | 80,000 |
2 | ??????? | ????????? |
b) 3 years, Cash flows =
EOY | Alternative alpha | Alternative beta |
0 | -100000 | -160000 |
1 | 50000 | 80000 |
2 | 60000 | 90000 |
3 | 70000 | ?????? |
C) 4 years, cash flow =
EOY | Alt Alpha | Alt Beta |
0 | -100000 | -160000 |
1 | 50000 | 80000 |
2 | 60000 | 90000 |
3 | ?????? | ?????? |
4 | ????? | ????? |
d) Year 5, cash flow =
EOY | Alt Alpha | Alt Beta |
0 | -100000 | -160000 |
1 | 60000 | 80000 |
2 | 50000 | 90000 |
3 | ?? | ?? |
4 | ?? | ?? |
5 | ?? | ?? |
d) same thing for 10 years.
please help!!!!!!! thank you
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