Could someone post the solution for each part please Your company is considering

Question

Could someone post the solution for each part please

Your company is considering the following two investments for needed repairs on their building: initial Investment Years Maintenance Refurbishment Alternative 1 $500,000 10 $4,000 $50,000 Alternative 2 $450,000 10 $4,500 $90,00 MARR = 15% Refurbishment is made at end of 10 years so that they can sell the building. They want to make a single sum deposit at the beginning of the investment to pay for it. Which is the preferred alternative? Alternative 1 Alternative 2 Alternative 1 and Alternative 2 are the same The Do Nothing Alternative What is the value of that alternative $0 $625,203 $659,505 $683,108

Explanation / Answer

8) As we see from table abobe alternative 2 is better

PV = A/(1+MARR)^n where n is years

Alternative A MARR=0.15 Alternative B MARR=0.15 Year Initial investment Maintenance Refurbishment Total Total PV of Total Year Initial investment Maintenance Refurbishment Total Total PV of Total 0 500000 500000 500000 0 450000 450000 450000 1 4000 4000 3478 1 4500 4500 3913 2 4000 4000 3025 2 4500 4500 3403 3 4000 4000 2630 3 4500 4500 2959 4 4000 4000 2287 4 4500 4500 2573 5 4000 4000 1989 5 4500 4500 2237 6 4000 4000 1729 6 4500 4500 1945 7 4000 4000 1504 7 4500 4500 1692 8 4000 4000 1308 8 4500 4500 1471 9 4000 4000 1137 9 4500 4500 1279 10 4000 50000 54000 13348 10 4500 90000 94500 23359 532434 494831

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.