3.1. What is the difference between Minimum Attractive Rate of Return (MARR) and Internal Rate of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
3.1. What is the difference between Minimum Attractive Rate of Return (MARR) and Internal Rate of Return (IRR)? And how can they be used together to determine economic viability of projects? (3) 3.2. Evaluate the feasibility of a solar power plant by using the Present Worth (PW) method when the Minimum Attractive Rate of Return (MARR) is 12% per year. Pertinent cost data are as follows: (6) 3 Power Plant Investment cost R13 000 000 Useful life 15 years Market value (EOY 15) R3 000 000 Overhaul cost-end of 5th year R200 000 Overhaul cost-end of 10th year R550 000 3.3. It is estimated that R1,75 million will be required to implement a project to develop a diesel depot. The expected cash flows to be generated from the depot are as follows: ΕΟΥ Cash flow 1 R600 000 2 R600 000 3 R600 000 4 R600 000 a) Determine the simple payback period for the project. + b) The discounted payback period if the MARR is 8%. 4/4 3.1. What is the difference between Minimum Attractive Rate of Return (MARR) and Internal Rate of Return (IRR)? And how can they be used together to determine economic viability of projects? (3) 3.2. Evaluate the feasibility of a solar power plant by using the Present Worth (PW) method when the Minimum Attractive Rate of Return (MARR) is 12% per year. Pertinent cost data are as follows: (6) 3 Power Plant Investment cost R13 000 000 Useful life 15 years Market value (EOY 15) R3 000 000 Overhaul cost-end of 5th year R200 000 Overhaul cost-end of 10th year R550 000 3.3. It is estimated that R1,75 million will be required to implement a project to develop a diesel depot. The expected cash flows to be generated from the depot are as follows: ΕΟΥ Cash flow 1 R600 000 2 R600 000 3 R600 000 4 R600 000 a) Determine the simple payback period for the project. + b) The discounted payback period if the MARR is 8%. 4/4
Expert Answer:
Answer rating: 100% (QA)
31 The MARR is the minimum acceptable rate of return that a company will accept on a new investment ... View the full answer
Related Book For
Posted Date:
Students also viewed these computer engineering questions
-
What is the difference between internal and external fragmentation?
-
What is the difference between simple paging and virtual memory paging?
-
What are micro-purchases? How can they be used to improve public procurement?
-
Brist Ltd is a UK resident company which prepares annual accounts to 31 March. In the year to 31 March 2021, the company had a UK trading profit of 2,120,000 and received overseas property income of...
-
Suppose Bank of America developed a credit card promotion to entice its customers to increase the balances on their credit cards. To test the effectiveness of different ways of communicating this...
-
As a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 2009, the following tentative trial balance as of December 31, 2008, is prepared...
-
A pharmaceutical company wants to conduct a survey of 40 individuals who have high cholesterol. The company has obtained a list from primary care physicians throughout the country of 6000 individuals...
-
Concur Technologies, Inc., is a large expense-management company located in Redmond, Washington. The Wall Street Journal asked Concur to examine the data from 8.3 million expense reports to provide...
-
A project being tendered at $100,000 has material costs of $60,000 and labour costs of $20,000. What amount should be allowed in the estimate to cover the premium cost for a 50% labour and material...
-
Table 5.7 shows a small set of predictive model validation results for a classification model, with both actual values and propensities. a. Calculate error rates, sensitivity, and specificity using...
-
Find the Volume of Solid of Revolution about y = 1, x = 4(x y), y = 1, y
-
What action will Bank of Montreal take if it finds that its balance in the Large Value Transfer System (LVTS) at the end of the day is a $25 Million deficit?
-
Given the cashflows for the two projects, use 10% discount rate to determine the salvage value for Alternative 1 that make the two projects equivalent. Hint: solve NPV for Alt 2, make that the NPV...
-
What can be said of business combinations?
-
QUESTION 1 Agro Tech Corporation is considering investing in a new IT system for selling to its clients. The company has identified two new possible systems, which would be suitable for its...
-
Describe contemporary views of leadership
-
Choose a short section (a sentence or part of a sentence) from the following text to use as a quotation. Try to incorporate into a sentence of your own. Don't forget to include proper citation! By a...
-
In Exercises 105108, evaluate each expression without using a calculator. log(ln e)
-
What is a microfranchise? Would these be good for a developing country? For the U.S.?
-
What is the impact of facility decisions on a supply chain?
-
Define service capacity and provide three examples of it that were not listed in the text.
-
Consider the dynamic system, a mass, spring and damper structure, shown in Figure 2.2. (a) Draw a free-body diagram for the dynamic system (b) Derive the Input-Output model of the dynamic system k...
-
Two connected cars with an applied input force \(u(t)\) and negligible rolling friction can be represented by a translational mechanical system as shown below. (a) Draw the free-body diagrams of this...
-
Consider an RLC circuit consisting of a resistor \((R)\), an inductor \((L)\), and a capacitor \((C)\), connected in series, as depicted in Figure 2.4. Derive the Input-Output model of the network....
Study smarter with the SolutionInn App