Which of the four projects listed blow would you choose if

Customer Question

Question 10

A pipeline contractor can purchase a needed truck for $40000. Its estimated life is 6 years, and it has no salvage value. Maintenance is estimated to be $2400/year. Operating expenses is $60/day.

The constructor can hire a similar unit for $150/day. MARR is 7%

a. How many days/year must the truck’s services be needed such that the two alternatives are equally costly?

b. If the truck is needed for 180 days per year, should the contractor buy the truck or hire the similar one? Why?

Attachment: 2012-08-06_075209_homeowrk#10.xls

i have attached a copy of all the questions for you to better read them...... this should help you alot..... thank s for the help

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Question 1	0
Which of the four projects listed blow would you choose if you only want to invest in one project if the criteria is a) Present Worth, b) Future Worth or c) Annual Worth? All projects are for five years and the risk-free interest rate is 10%.
Project
X1	Invest $14,000 today and receive $25,000 in five years.
X2	Invest $10,000 today, receive annual payments of $3,000.
X3	Invest $15,000 today, receive annual payments of $4,000, and also receive a final payment of $2,000.
X4	Invest $9,000 today, receive annual payments of $1,000, $2,000, $3,000, $4,000 and $5,000

Question 2.

0

Do an Internet search on Life Cycle Cost Analysis. Give the URL of any Web site you visit and tell briefly (30 to 50 words) what you learned or found interesting.

Question 3		Score	0
Using the following list of accounts, prepare a simple income statements. (The $000,000 indicates all numbers are millions.)
Accounts	$000,000
Depreciation	25
New Product Development	20
Product Revenues	345
Marketing Expenses	18
Production Materials & Labor	255
Corporate IT expense	10
Interest Expense	3

Question 4		Score	0
The following projects are being considered by the Corporate Investment Committee who has an investment budget of $1,000,000.
a. Which ones should be funded based on NPV assuming a 6% interest rate? Your Budget is Only $1,000,000.
b. Which ones should be funded using a 3 year or less payback period criterion?
Project	Years	Up Front (Y 0)	Cost each year after first	Benefits each year after first
V	6	$500,000	0	$110,000
W	6	$250,000	$40,000	$100,000
X	5	$400,000	$100,000	$200,000
Y	3	$300,000	$25,000	$150,000
Z	4	$150,000	$200,000	$250,000
Bitmap

Question 5	Score	0
A portable generator is needed at a remote construction site. Two altarnatives are being considered. Their annual fixed costs and operating and maintenance costs per hour are shown in the table below. The generator runs three 8 hhours shifts/day for 250 working days per year.
Generator	Fixed costs($/yr)		O&M Costs($/hour)
1	$4000	$7.00
2	$8000	$5.50
a) How many hours per shift is a generator needed if the contractor is indifferent between the two generators?
b) If the site requires a generator for 2.5 hours/ shift, which generator is preferred, and what is its estimated annual cost?
c) If the site requires a generator for 5.5 hours/ shift, which generator is preferred, and what is its estimated annual cost?

Question 6	Score	0
The Signal Company is planning on investing in a new project. This will involve the purchase of some new machinery costing $450,000. The Signal Company expects cash inflows from this project as
detailed below:
Year	Year	Year	Year
One	Two	Three	Four
$200,000	$225,000	$275,000	$200,000
The appropriate discount rate for this project is 16%. Show calculations.
a) What is the payback period for this project?
b) What is the NPV for this project?
c) What is the profitability index for this project?

d) What is the IRR for this project?

Question 7

Score

0

Opportunity OR Sunk.

Covol Industries is developing the relevant cash flows associated with the proposed replacement of an existing machine tool with a new,

technologically advanced one. Given the following costs related to the proposed project,

, explain whether each would be treated as a sunk cost or an opportunity cost in developing the relevant cash flows associated with the proposed replacement decision.

a. Covol would be able to use the same tooling, which had a book value of $40,000, on the new machine tool as it had used on the old one.

b. Covol would be able to use its existing computer system to develop programs for operating the new machine tool. The old machine tool did not require these programs. Although the firm's computer has excess capacity available, the capacity could be leased to another firm for an annual fee of $17,000.

c. Covol would have to obtain additional floor space to accommodate the larger new machine tool. The space that would be used is currently being leased to another company for $10,000 per year.

d. Covol would use a small storage facility to store the increased output of the new machine tool. The storage facility was built by Covol 3 years earlier at a cost of $120,000. Because of its unique configuration and location, it is currently of no use to either Covol or any other firm.

Explain your answer in a sentence or 2.

Question 8		Score	0
LATHE
Strong Tool Company has been considering purchasing a new lathe as a replacement for a fully depreciated lathe that can last 5 more years. The new lathe is expected to have a 5-year life and depreciation charges of $2,000 in year 1; $3,200 in year 2; $1,900 in year 3; $1,200 in both year 4 and year 5; and $500 in year 6.
The firm estimates the revenues and expenses (excluding depreciation and interest) for the new and the old lathes to be as shown in the following table.
The firm is subject to a 40% tax rate. Should the new lathe be purchased? The price of the new lathe is $ 10,000 and the cost of capital is 10%, annually.
Year	New lathe		Old lathe
	Revenue	Expenses (excl. depr. and int.)	Revenue	Expenses (excl. depr. and int.)
1	$40,000	$30,000	$35,000	$25,000
2	$41,000	$30,000	$35,000	$25,000
3	$42,000	$30,000	$35,000	$25,000
4	$43,000	$30,000	$35,000	$25,000
5	$44,000	$30,000	$35,000	$25,000

Question 9	Score	0
Your grandmother bought an annuity from Rock Solid Life Insurance Company for $ 200,000 when she retired. In exchange for the $ 200,000, Rock Solid will pay her $ 25,000 per year until she dies. The interest rate is 5%. How long must she live after the day she retired to come out ahead (that is to get more in value than she paid in)?
You may mathemetically check your answer.

Submitted: 285 days and 12 hours ago.

Category: Business and Finance Homework

Value: $40

Status: CLOSED

Expert: BusinessTutor replied285 days and 7 hours ago.

Hello

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Please advise your deadline as well as the name of the book you are using: Title, author's name, and edition

Thank you

Customer replied285 days and 3 hours ago.

Contemporary Engineering Economics (5th Edition) (Hardcover) Chan S. Parks... i will add a bonus at the end of 40 dollars. Could i get a solution by thursday. Thats the deadline. I am greatful for the help! Could you see the attached document.

Expert: BusinessTutor replied285 days ago.

ok, I will check them out and reply to your in a couple of hours to tell you if I can help

All the best

Customer replied285 days ago.

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Expert: BusinessTutor replied285 days ago.

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Customer replied285 days ago.

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Expert: BusinessTutor replied285 days ago.

Experts can see that the question is open; if someone can help, they will send you a message just like I did

Customer replied285 days ago.

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Expert: MJA1415 replied284 days and 18 hours ago.

Have a nice day

Click here for solution

Customer replied284 days and 6 hours ago.

were you able to access the attacehd spreadsheet....the solution is a little difficult to navigate through.. dont want you to have to go through alot of trouble but could i get them on individual sheets instead of all on one page.. thanks for the assitance.. how do i pay you or have you recieved th funds already.