1.The equipment for applying specialty coatings that provide a high angle of skid forthe paperboard and corrugated box industries has a delivered cost of $390,000. Ifthe overall cost factor for the complete system is 3.96, the total plant cost isapproximatelySol:…
1.When conducting a sensitivity analysis using three estimates for each parameter, allof the following are estimates that should be made, exceptSol: improbable 2.In conducting a sensitivity analysis of a proposed project, the present worth valuesof $–10,000, $40,000, and $50,000 were…
1.Which of the statements below is correct?Sol. Simple (no-return) payback is always shorter than discounted payback. 2.All of the below are disadvantages of the simple (no-return) payback method ofevaluation when compared to the present worth, annual worth, and rate of…
1.It could be argued that the best mix of Debt and Equity is the one whichSol: Minimizes the WACC. 2.Which of the methods listed below would be the least appropriate forevaluating mutually exclusive projects?Sol: The Rate of Return method. 3.One…
1.A small manufacturing company with a gross income of $360,000 has thefollowing operating expenses: M&O = $76,000, insurance = $7,000, labor =$110,000, utilities = $29,000, debt service = $37,000, and taxes = $9,000. The netoperating income (NOI) is closest toA)…
Q1.When comparing mutually exclusive alternatives that have different lives by the presentworth method, it is necessary toSol: Find the least common denominator and convert both periods to equal length Q2.To get the AW of a cash flow of $10,000 that…
1.For the diagram shown below, the respective values of n to calculate the present worth inyear 0 by the equation P0 = 100(P/A, 10%, n1)(P/F, 10%, n2) areSol: n1 = 6, n2 = 1. 2.When using compound interest factors in…
1.You plan to make a deposit of $10,000 into your investment account, and then startwithdrawing $2,000 from the account every year for 7 years. The account is expected toprovide a rate of return of 12% every year. At the end…
