What initial cost of machine D will make the IRR for the two machines equal?

Words: 529
Pages: 2
Subject: Finance

Question 110 pts
What is the capital recovery cost for a machine costing $604,800 with a life of 12 years and a salvage value of 14% of the initial cost? The rate used by the firm is 10% per year compounded weekly.
Group of answer choices

$73,871

$74,706

$87,136

$108,748

Flag question: Question 2
Question 210 pts
What is the initial cost of a machine with a life of 8 years that has a salvage value of $99,500 and a capital recovery cost of $65,000 per year? The firm uses a rate of 7% per year compounded quarterly.
Group of answer choices

$333,745

$442,465

$567,937

$719,566

Flag question: Question 3
Question 310 pts
What is the NPW for a machine with the following details:

APR (Nom / y) 9% p y c m
Initial cost ($175,000)
Salvage value 14% of initial value
First year cost ($62,000)
Increase in cost 4% p y
First year revenue $90,000
Increase in revenue 8% p y
Life of machine 10 years
Group of answer choices

$93,398

$156,135

$233,578

$325,750

Flag question: Question 4
Question 410 pts
What is the FW of a machine with the following details:

APR (Nom / y) 8% p y c d
Initial cost ($175,000)
Salvage value 26% of initial value
First year cost ($66,000)
Increase in cost 4% p y
First year revenue $95,000
Increase in revenue 9% p y
Life of machine 10 years
Group of answer choices

$52,629

$153,152

$306,747

$526,723

Flag question: Question 5
Question 510 pts
What is the IRR for a machine with the following details?

APR (Nom / y) 7% p y c w
Initial cost ($325,000)
Salvage value 8% of initial value
First year cost ($99,000)
Increase in cost 7% p y
First year revenue $130,000
Increase in revenue 11% p y
Life of machine 15 years
Group of answer choices

11.64%

17.52%

22.20%

26.24%

Flag question: Question 6
Question 610 pts
What is the FW for a machine with the following details:

APR (Nom / y) 11% p y c d
Initial cost ($375,000)
Salvage value 16% of purchase value
First year cost ($106,000)
Inflation (all costs) 5.50% p y
First year revenue $175,000
Increase in revenue 12% p y
Life of machine 5 years
Life of project 20 years
Group of answer choices

$874,583

$2,422,461

$5,315,356

$10,194,603

Flag question: Question 7
Question 710 pts
What is the IRR for a machine with the following details?

APR (Nom / y) 9% p y c d
Initial cost ($475,000)
Salvage value 20% of purchase value
First year cost ($106,000)
Inflation (all costs) 6.50% p y
First year revenue $195,000
Increase in revenue 11% p y
Life of machine 5 years
Life of project 20 years
Group of answer choices

7.00%

13.26%

18.45%

22.96%

Flag question: Question 8
Question 810 pts
What initial cost of machine D will make the IRR for the two machines equal?

Cost of Machine C ($625,000) Cost of Machine D ($900,000)
Salvage value 17% of purchase value Salvage value 19% of purchase value
First year cost ($85,000) First year cost ($102,000)
Inflation (all costs) 3.00% p y Inflation (all costs) 3.50% p y
First year revenue $190,000 First year revenue $215,000
Increase in revenue 4% p y Increase in revenue 6% p y
Life of machine 5 years Life of machine 5 years
Life of project 20 years Life of project 20 years
Group of answer choices

$479,095

$770,040

$730,419

$1,961,354

Flag question: Question 9
Question 910 pts
Which graph shows the net present worth of Project X at various rates of interest from 0% to 50%? The file with the graphs is attached here:Quiz 5-9.pptx

Years Project X
0 ($770,040)
1 ($347,490)
2 $143,612
3 $143,612
4 $143,612
5 $143,612
6 $168,239
7 $168,239
8 $365,479
9 $218,287
10 $229,202
Group of answer choices

Graph 1

Graph 2

Graph 3

Graph 4

Flag question: Question 10
Question 1010 pts
For what finance rate, will the two projects have the same MIRR?

Finance rate 5.00% Years Project E Project F
Reinvest rate 8.0% 0 ($575,000) ($1,345,000)
1 $155,000 $173,000
2 $155,000 $173,000
3 $155,000 $173,000
4 $155,000 $173,000
5 ($575,000) $173,000
6 $172,000 $173,000
7 $172,000 $173,000
8 $172,000 $173,000
9 $172,000 $173,000
10 $172,000 $173,000
Group of answer choices

1.73%

1.28%

0.43%

0.24%