An investment company is considering 6 different independent, divisible investments. The 6 investments are being considered...
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An investment company is considering 6 different independent, divisible investments. The 6 investments are being considered over a 8 year horizon using a MARR of 15%. The initial investment cost, annual savings, and salvage values are given for each of the projects below: Annual Returns Initial investment $30,000 $7,000 $9,500 $22,000 Salvage Value 1 2 $35,000 $11,000 $30,000 $12,000 $8,500 Total PW = $ Click here to access the TVM Factor Table calculator. The company should pursue the 1st investment at The company should pursue the 2nd investment at 3 The company should pursue the 3rd investment at The company should pursue the 4th investment at The company should pursue the 5th investment at The company should pursue the 6th investment at 4 The company's investment budget is $60,000. At what level should the company pursue each investment (expressed as a decimal between 0 and 1), and what will be its total present worth when it pursues these investments? $15,000 $5,300 $3,000 5 $25,000 $10,000 $2 $1,500 level level level level $2 level level S Carry all interim calculations to 5 decimal places and then round your final answers for the investment levels to 2 decimal places and your final answer for the total present worth to a whole number. The tolerance for the investment levels is ±0.02 and the tolerance for the total present worth is ±20. An investment company is considering 6 different independent, divisible investments. The 6 investments are being considered over a 8 year horizon using a MARR of 15%. The initial investment cost, annual savings, and salvage values are given for each of the projects below: Annual Returns Initial investment $30,000 $7,000 $9,500 $22,000 Salvage Value 1 2 $35,000 $11,000 $30,000 $12,000 $8,500 Total PW = $ Click here to access the TVM Factor Table calculator. The company should pursue the 1st investment at The company should pursue the 2nd investment at 3 The company should pursue the 3rd investment at The company should pursue the 4th investment at The company should pursue the 5th investment at The company should pursue the 6th investment at 4 The company's investment budget is $60,000. At what level should the company pursue each investment (expressed as a decimal between 0 and 1), and what will be its total present worth when it pursues these investments? $15,000 $5,300 $3,000 5 $25,000 $10,000 $2 $1,500 level level level level $2 level level S Carry all interim calculations to 5 decimal places and then round your final answers for the investment levels to 2 decimal places and your final answer for the total present worth to a whole number. The tolerance for the investment levels is ±0.02 and the tolerance for the total present worth is ±20.
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Answer rating: 100% (QA)
Answer Step 1 Firstly we calculate present worth of all the alternatives in order to find the profit... View the full answer
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Posted Date:
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