Salvage values represent the net proceeds (after tax) from disposal of the assets if they are sold at the end of each year. Both projects B1 and B2 will be available (or can be repeated) with the same costs and salvage values for an indefinite period.
(a) Assuming an infinite planning horizon, which project is a better choice at MARR = 12%?
(b) With a 10-year planning horizon, which project is a better choice at MARR = 12%?
Table 1
B1 B2
n Cash Flow Salvage Value Cash Flow Salvage Value
0 -$20,000 β -$17,000 β
1 -2,000 10,000 -2,500 9.000
2 -2,000 8,000 -2,500 6,000
3 -2,000 5,000 -2,500 3,000
4 -2,000 3,000 β β
5 -2,000 2.000 β β
Answers: 3
Business, 22.06.2019 13:50
The retained earnings account has a credit balance of $24,650 before closing entries are made. if total revenues for the period are $77,700, total expenses are $56,900, and dividends are $13,050, what is the ending balance in the retained earnings account after all closing entries are made?
Answers: 2
Business, 22.06.2019 16:00
If the familyβs net monthly income is 7,800 what percent of the income is spent on food clothing and housing?
Answers: 3
Business, 22.06.2019 16:20
Suppose you hold a portfolio consisting of a $10,000 investment in each of 8 different common stocks. the portfolio's beta is 1.25. now suppose you decided to sell one of your stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 1.55. what would the portfolio's new beta be? do not round your intermediate calculations.
Answers: 2
Business, 22.06.2019 20:10
Mikkelson corporation's stock had a required return of 12.50% last year, when the risk-free rate was 3% and the market risk premium was 4.75%. then an increase in investor risk aversion caused the market risk premium to rise by 2%. the risk-free rate and the firm's beta remain unchanged. what is the company's new required rate of return? (hint: first calculate the beta, then find the required return.) do not round your intermediate calculations.
Answers: 2
Salvage values represent the net proceeds (after tax) from disposal of the assets if they are sold a...
Computers and Technology, 22.09.2019 05:10
English, 22.09.2019 05:10
Chemistry, 22.09.2019 05:10
Mathematics, 22.09.2019 05:10