User Account

All Pages

What is the net present value of the investment

Assignment Help Business Management
Reference no: EM132685077

A new furnace for your small factory will cost $47,000 and a year to install, will require ongoing maintenance expenditures of $1,500 a year. But it is far more fuel-efficient than your old furnace and will reduce your consumption of heating oil by 4,400 gallons per year. Heating oil this year will cost $2 a gallon; the price per gallon is expected to increase by $0.50 a year for the next 3 years and then to stabilize for the foreseeable future. The furnace will last for 20 years, at which point it will need to be replaced and will have no salvage value. The discount rate is 8%.

a. What is the net present value of the investment in the furnace?

b. What is the IRR?

c. What is the payback period?

d. What is the equivalent annual cost of the furnace?

e. What is the equivalent annual savings derived from the furnace?

f. Compare the PV of the difference between the equivalent annual cost and savings to your answer to part (a). Are the two measures the same or is one larger?

Reference no: EM132685077

Questions Cloud

Explain what happens to the interest rate : Explain what happens to the interest rate if the money supply increases or decreases and the money demand remains unchanged. Explain what happens.
Explain the possible causes of the current economic downturn : Explain the possible causes of the current economic downturn. Discuss Paul Krugman and Joseph Stiglitz' argument that President Bush's tax plan does little.
Which levels is the strongest type of level of measurement : A survey in which customers taste four different brands of soda, and rank them from 1 to 4 would be an example of which type of level of measurement?
What will be the par value per share after the split : The company just announced a two-for-nine reverse stock split. What will be the par value per share after the split?
What is the net present value of the investment : A new furnace for your small factory will cost $47,000 and a year to install, will require ongoing maintenance expenditures of $1,500 a year. But it is far more
Which level of measurement classifying employees in a firm : When you select data from a subset of all elements, you are using a? Classifying employees in a firm by their gender is example of which level of measurement
What is the present value of the cost of leasing : Your landscaping company can lease a truck for $8,500 a year (paid at year-end) for 5 years. It can instead buy the truck for $36,000. The truck will be valuele
Calculate the remaining six major cost elements of business : In this assignment, you will define and calculate the remaining six major cost elements of a business, when given the total costs and the quantity produced.
Effective business communications : Effective business communications and Examine the environment in which businesses operate - marketing, purchasing, production and quality, finance, customer

Reviews

Write a Review

Business Management Questions & Answers

  Caselet on michael porter’s value chain management

The assignment in management is a two part assignment dealing 1.Theory of function of management. 2. Operations and Controlling.

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. Due to increase in the preference for light beer drinkers, Chris Prangel wants to introduce light beer version in Mountain Man. An analysis into the la..

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. An analysis into the launch of Mountain Man Light over the present Mountain Man Lager.

  Analysis of the case using the doing ethics technique

Analysis of the case using the Doing Ethics Technique (DET). Analysis of the ethical issue(s) from the perspective of an ICT professional, using the ACS Code of  Conduct and properly relating clauses from the ACS Code of Conduct to the ethical issue.

  Affiliations and partnerships

Affiliations and partnerships are frequently used to reach a larger local audience? Which options stand to avail for the Hotel manager and what problems do these pose.

  Innovation-friendly regulations

What influence (if any) can organizations exercise to encourage ‘innovation-friendly' regulations?

  Effect of regional and corporate cultural issues

Present your findings as a group powerpoint with an audio file. In addition individually write up your own conclusions as to the effects of regional cultural issues on the corporate organisational culture of this multinational company as it conducts ..

  Structure of business plan

This assignment shows a structure of business plan. The task is to write a business plane about a Diet Shop.

  Identify the purposes of different types of organisations

Identify the purposes of different types of organisations.

  Entrepreneur case study for analysis

Entrepreneur Case Study for Analysis. Analyze Robin Wolaner's suitability to be an entrepreneur

  Forecasting and business analysis

This problem requires you to apply your cross-sectional analysis skills to a real cross-sectional data set with the goal of answering a specific research question.

  Educational instructional leadership

Prepare a major handout on the key principles of instructional leadership

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd