Please help with these practice problems! Thanks The breakeven (NPW=$0) dollar v

Question

Please help with these practice problems! Thanks

The breakeven (NPW=$0) dollar value (nearest $100) of the initial cost
parameter (P) is a) 470,000; b) 483,000; c) 510,400; d) 523,100.
18. The breakeven (NPW=$0) dollar value (nearest $100) of the annual
revenue parameter (AOR) is
a) 291,300; b) 293,400; c) 298,900; d) 305,500.

I. Initial Cost (P) = $450,000 2. Salvage value (SV)= $45,265 3. Annual operating revenues (AOR) = $300,000 4. Annual operating costs (AOC)= $180,000 5. Economic life (N) = 5 years 6. MARR= 10% 7. Inflation Rate=0% One-way Sensitivity Table Net Present Worth (NPW Parameters -15% -10%| -5% | Reference l +5% +10% +15% Scenario AOR AOC SV MARR

Explanation / Answer

Pleaes provide feedback .... Thanks in advance.. :-)

Year cash flow PV factor PV 0 x 1 x 1 to 5 120000 3.7908 454894.41 5 45265 0.620921323 28106.00 483000.42 Annual cash inflows=300000-180000 At Breakeven Investment NPV = 0 483000.42 - x = 0 X = 483000 (B) Year cash flow PV factor PV 0 -450000 1 -450000.00 1 to 5 x 3.7908 3.7908 x 1 to 5 -180000 3.7908 -682341.618 5 45265 0.620921323 28106.00 3.7908 x - 1104235.61 Annual cash inflows=300000-180000 At Breakeven Annual revanue NPV = 0 3.7908 x - 1104235.61 =0 X = 1104235.61/3.7908 291294.5721 (A)

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---