What is the present worth of each alternative

Assignment Help Financial Management
Reference no: EM131329580

An environmental consultant is considering the installation of a water storage tank for a client. The tank is estimated to have an initial cost of $417,000, and annual maintenance costs are estimated to be $7,300 per year. As an alternative, a holding pond can be provided a short distance away at an initial cost of $280,000 for the pond plus $90,000 for pumps and piping. Annual operating and maintenance costs for the pumps and holding pond are estimated to be $14,000. The planning horizon is 20 years, and at that time, neither alternative has any salvage value. MARR is 17 %/year.

What is the present worth of each alternative?

Storage tank: $

Holding pond: $

Which is the preferred alternative?

Reference no: EM131329580

Questions Cloud

Write a response about the given post : A study was done in Malaysia with 182 Generation Y (18-35 age group) respondents to an online survey to determine if brand trust, customer usage satisfaction, and self-image congruence with the brand, impacted repeat purchase intention on the smar..
Understanding and identification of relevant issues of case : Advise Mary whether there are any terms of the parking contract that have been breached by Queens Parking Ltd under the common law of contract and/or statute.
How do these men justify slavery : How do these men justify slavery? Or what points do they make about the need to abolish slavery? Should the emancipated slaves remain "on-soil," that is, in the United States
Atmosphere conditions of wind speed : Question 1: Summarize the role that the atmosphere conditions of wind speed, temperature, and stability potentially impact plume modeling activities with a Gaussian model.
What is the present worth of each alternative : An environmental consultant is considering the installation of a water storage tank for a client. The tank is estimated to have an initial cost of $417,000, and annual maintenance costs are estimated to be $7,300 per year. What is the present worth o..
Types of ethical theory : First, please research the following types of ethical theory: consequentialism, deontology, relativism, virtue ethics, and justice. Next, choose two philosophers' original texts to examine in detail. Each original text must be representative of a ..
What is the payback period of this investment : You are considering making a movie. The movie is expected to cost $10.9 million up front and take a year to produce. After? that, it is expected to make $4.3 million in the year it is released and $1.8 million for the following four years. What is th..
Research paper aspect of organizational behavior : Please describe in a 6 page Research paper aspect of Organizational Behavior and describe the specific cases of its application as located in the contemporary literature.
What will be the change in the value of your firm : Your factory has been offered a contract to produce a part for a printer. The contract would last for 3 years and your cash flows from the contracts would be $5.18 million per year. Your upfront setup costs to be ready to produce the part would be $7..

Reviews

Write a Review

Financial Management Questions & Answers

  Installation of geothermal system rather than gas furnace

It is proposed to install a geothermal heat pump to provide space heating to a four-bedroom home that requires 23,300 kWh of space heating per year. The heat pump and vertical well loop system needed for geothermal heating costs $18,400 to install. W..

  Set with an installment loan

Emma Weber purchased bedroom set with an installment loan that has an apr of 12% the bedroom set sells for $2,650. The store financing requires a 15% down payment and 42 monthly payments. What’s the finance charge?

  Estimate the present value of the venture at the end of year

A venture capitalist wants to estimate the value of a new venture. The venture is not expected to produce net income or earnings until the end of year 5 when the net income is estimated at $1,600,000. Estimate the present value of the venture at the ..

  Determine her current and predicted revenues-variable costs

Janet Gilbert is director of labs. She has some extra capacity and has contracted with some small neighbouring hospitals to run some of their lab tests. She has recently had a study conducted and has determined that her costs of these contracts are $..

  Determine the payback period-calculate the net present value

A project requiring a $9000.00 initial investment is expected to provide after tax inflows of $4000. Per year for 3 years A- Determine the payback period. B- Calculate the net present value if the firms cost of capital is 10%

  By how much did the company retained earnings increase

Polycom Systems earned $516 million last year and paid out 28 percent of earnings in dividends. By how much did the company’s retained earnings increase? With 100 million shares outstanding and a stock price of $131, what was the dividend yield?

  What is your expected profit

What is your expected profit if you offer $3,000? Should you make such an offer?- What is the highest offer that you can make without losing money on the deal?

  Define the parallel accounting

Define the “Parallel Accounting” and discuss its usefulness using a real example.

  Financial analysts want to discount this liability

A company has a future liability of $500 million that must be paid in one lump sum in twenty-five years. To assess the value of the firm's stock, financial analysts want to discount this liability back to the present. The relevant discount rate is 6...

  Number of theories of the term structure of interest rates

There are a number of theories of the term structure of interest rates including the unbiased expectations hypothesis, preferred habitat hypothesis, and market segmentation hypothesis. Discuss the implications of the unbiased expectations hypothesis ..

  Calculate the firm cash conversion cycle

Multiple changes in cash conversion cycle Garrett Industries turns over its inventory six times each year; it has an average collection period of 45 days and an average payment period of 30 days. Calculate the firm’s cash conversion cycle, its daily ..

  Draw a time line to show the cash flows of the project

Draw a time line to show the cash flows of the project and compute the project's payback period, net present value, profitability index, and internal rate of return.

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!

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