Please show work 5) What is the present value of $8000 five years from now at 5%
ID: 1092298 • Letter: P
Question
Please show work
5)
What is the present value of $8000 five years from now at 5% compounded annually?
Interest Factor Calculator
$1848
6)
The alternatives are mutually exclusive. Using the given information, select the best alternative.
Given the following data,
What is the internal rate of return of Project A?
$6268 $1448 $10,208$1848
6)
The alternatives are mutually exclusive. Using the given information, select the best alternative.
Alternatives A B C D Initial cost $50,000 $60,000 $72,000 $75,000 Annual revenues $15,000 $20,000 $24,000 $26,000 Annual expenses $3000 $6000 $8000 $8000 Life 10 years 10 years 10 years 10 years Rate of return 20% 19% 18% 20%MARR=12%
Incremental Rate of Returns
B-A 15%
C-B 11%
C-A 13%
D-A 20%
D-B 23%
D-C 66% 7)
Given the following data,
Project A B C D E Initial Cost $170,000 $260,000 $300,000 $330,000 $150,000 Annual Receipts 114,000 120,000 130,000 147,000 98,000 Annual Expenses 70,000 71,000 64,000 79,000 63,000 Life (years) 10 10 10 10 10What is the internal rate of return of Project A?
Explanation / Answer
5)
What is the present value of $8000 five years from now at 5% compounded annually?
Interest Factor Calculator
present value = 8000/1.05^5= $6268
6)
A
B
C
D
B-A
C-B
D-B
($50,000)
($60,000)
($72,000)
($75,000)
($10,000)
($12,000)
($15,000)
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
IRR
15.1%
10.6%
23.4%
D is the best alternative
D-B 23%
7)
Project
0
1
2
3
4
5
6
7
8
9
10
Initial Cost
($170,000)
Annual Receipts
114,000
114,000
114,000
114,000
114,000
114,000
114,000
114,000
114,000
114,000
Annual Expenses
70,000
70,000
70,000
70,000
70,000
70,000
70,000
70,000
70,000
70,000
Annual cash flow
($170,000)
44,000
44,000
44,000
44,000
44,000
44,000
44,000
44,000
44,000
44,000
IRR
22.47%
internal rate of return of Project A = 22.47%
A
B
C
D
B-A
C-B
D-B
($50,000)
($60,000)
($72,000)
($75,000)
($10,000)
($12,000)
($15,000)
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
$12,000
$14,000
$16,000
$18,000
$2,000
$2,000
$4,000
IRR
15.1%
10.6%
23.4%