Questions (51-56): Co has asked you to recommend a new nutcracker machine. After
ID: 2615927 • Letter: Q
Question
Questions (51-56): Co has asked you to recommend a new nutcracker machine. After months of hard research, you have collected the following data Data Life, Years First Cost (FC Annual Benefit (AB) AB Gradient (AB Annual Maintenance & Operating Cost (M&O; M&O; Gradient (M&OG;) Salvage Value KRAX 6 $202,000 73,000 1,200 18,000 600 42,000 SPLIT-NUT $285,000 88,000 1300 34,000 1,100 48,000 Discussions with the accounting department reveal that a loan must be secured to purchase any machine. The loan data are as follows: Data Down Payment (% of FC Loan Period, Years Loan Payment KRAX 30% SPLIT-NUT 30% $34,392.11 $37,441.93 The loan payments will be made annually with 12% interest. PARC Co. assumes MARR 1 5%. Using the Net Present Worth (NPW) analysis, answer the following questions (51) The analysis period if you are going to use NPW is close to: (52) The interest rate that you are going to use in the calculation is: (53) The NPW for KRAX type, using only 6 years cash flow, is close to: (54) The NPW for SPLIT-NUT type, using only 9 years cash flow, is close to: (55) The NPW for KRAX type in the analysis period, is close to: a) 24 years b) 21 years c) 12 years d)A 8 years a) 12% c) 30% d) 13% a) /$40,500 b) $15,500 c) $11,000 d) $10,110 a) $10,500 b) $12,500 c) $11,200 d)$10,100 a) $10,510 b) $65,300 c) $61,900 d) $14,250Explanation / Answer
51. Select a 18-year analysis period, the least common multiple of 9 and 6. 52. Interest Rate used here is 12%. 15% is MARR it oue expected return 53. Krax NPW Year Benefit Cost Interest Expense Net Cash flow DF MARR 15% Discounted Net Cash flow 1 $ 73,000.00 $ 18,000.00 $ 16,968.00 $ 38,032.00 0.869565 $ 33,071.30 2 $ 74,200.00 $ 18,600.00 $ 14,877.11 $ 40,722.89 0.756144 $ 30,792.36 3 $ 75,400.00 $ 19,200.00 $ 12,535.31 $ 43,664.69 0.657516 $ 28,710.24 4 $ 76,600.00 $ 19,800.00 $ 9,912.49 $ 46,887.51 0.571753 $ 26,808.09 5 $ 77,800.00 $ 20,400.00 $ 6,974.94 $ 50,425.06 0.497177 $ 25,070.17 6 $ 79,000.00 $ 21,000.00 $ 3,684.87 $ 54,315.13 0.432328 $ 23,481.93 6 $ 42,000.00 Salvage Value 0.432328 $ 18,157.76 PV of Cash flow $ 186,091.85 Intial Investment $ 202,000.00 Net Present Worth $ (15,908.15) Interest Calculation Loan 141400 OP Balance Repayment Interest Principal Closing Bal A=E B C=AX12% D=B-C E=B-D $ 141,400.00 $ 34,392.11 $ 16,968.00 $ 17,424.11 $ 123,975.89 $ 123,975.89 $ 34,392.11 $ 14,877.11 $ 19,515.00 $ 104,460.89 $ 104,460.89 $ 34,392.11 $ 12,535.31 $ 21,856.80 $ 82,604.08 $ 82,604.08 $ 34,392.11 $ 9,912.49 $ 24,479.62 $ 58,124.46 $ 58,124.46 $ 34,392.11 $ 6,974.94 $ 27,417.17 $ 30,707.29 $ 30,707.29 $ 34,392.11 $ 3,684.87 $ 30,707.24 $ 0.05 54. SPLIT NUT NPW Year Benefit Cost Interest Expense Net Cash flow DF MARR 15% Discounted Net Cash flow 1 $ 88,000.00 $ 34,000.00 $ 23,940.00 $ 30,060.00 0.869565 26139.13043 2 $ 89,300.00 $ 35,100.00 $ 22,319.77 $ 31,880.23 0.756144 24106.03524 3 $ 90,600.00 $ 36,200.00 $ 20,505.11 $ 33,894.89 0.657516 22286.44102 4 $ 91,900.00 $ 37,300.00 $ 18,472.69 $ 36,127.31 0.571753 20655.90647 5 $ 93,200.00 $ 38,400.00 $ 16,196.38 $ 38,603.62 0.497177 19192.82089 6 $ 94,500.00 $ 39,500.00 $ 13,646.92 $ 41,353.08 0.432328 17878.07941 7 $ 95,800.00 $ 40,600.00 $ 10,791.51 $ 44,408.49 0.375937 16694.79467 8 $ 97,100.00 $ 41,700.00 $ 7,593.46 $ 47,806.54 0.326902 15628.04129 9 $ 98,400.00 $ 42,800.00 $ 4,011.65 $ 51,588.35 0.284262 14664.62923 9 $ 48,000.00 Salvage Value 0.284262 13644.59578 PV of Cash flow $ 190,890.47 Intial Investment $ 285,000.00 Net Present Worth $ (94,109.53) Interest Calculation Loan 199500 OP Balance Repayment Interest Principal Closing Bal A=E B C=AX12% D=B-C E=B-D $ 199,500.00 $ 37,441.93 $ 23,940.00 $ 13,501.93 $ 185,998.07 $ 185,998.07 $ 37,441.93 $ 22,319.77 $ 15,122.16 $ 170,875.91 $ 170,875.91 $ 37,441.93 $ 20,505.11 $ 16,936.82 $ 153,939.09 $ 153,939.09 $ 37,441.93 $ 18,472.69 $ 18,969.24 $ 134,969.85 $ 134,969.85 $ 37,441.93 $ 16,196.38 $ 21,245.55 $ 113,724.30 $ 113,724.30 $ 37,441.93 $ 13,646.92 $ 23,795.01 $ 89,929.29 $ 89,929.29 $ 37,441.93 $ 10,791.51 $ 26,650.42 $ 63,278.87 $ 63,278.87 $ 37,441.93 $ 7,593.46 $ 29,848.47 $ 33,430.40 $ 33,430.40 $ 37,441.93 $ 4,011.65 $ 33,430.28 $ 0.12 55. Krax NPW for analysis period Year Benefit Cost Interest Expense Net Cash flow DF MARR 15% Discounted Net Cash flow 1 $ 88,000.00 $ 34,000.00 $ 23,940.00 $ 30,060.00 0.869565 $ 26,139.13 2 $ 89,300.00 $ 35,100.00 $ 22,319.77 $ 31,880.23 0.756144 $ 24,106.04 3 $ 90,600.00 $ 36,200.00 $ 20,505.11 $ 33,894.89 0.657516 $ 22,286.44 4 $ 91,900.00 $ 37,300.00 $ 18,472.69 $ 36,127.31 0.571753 $ 20,655.91 5 $ 93,200.00 $ 38,400.00 $ 16,196.38 $ 38,603.62 0.497177 $ 19,192.82 6 $ 94,500.00 $ 39,500.00 $ 13,646.92 $ 41,353.08 0.432328 $ 17,878.08 7 $ 95,800.00 $ 40,600.00 $ 10,791.51 $ 44,408.49 0.375937 $ 16,694.79 8 $ 97,100.00 $ 41,700.00 $ 7,593.46 $ 47,806.54 0.326902 $ 15,628.04 9 $ 98,400.00 $ 42,800.00 $ 4,011.65 $ 51,588.35 0.284262 $ 14,664.63 6 $ 42,000.00 0.284262 $ 11,939.02 10 $ 99,700.00 $ 43,900.00 $ 23,940.00 $ 31,860.00 0.247185 $ 7,875.30 11 $ 101,000.00 $ 45,000.00 $ 22,319.77 $ 33,680.23 0.214943 $ 7,239.34 12 $ 102,300.00 $ 46,100.00 $ 20,505.11 $ 35,694.89 0.186907 $ 6,671.63 13 $ 103,600.00 $ 47,200.00 $ 18,472.69 $ 37,927.31 0.162528 $ 6,164.25 14 $ 104,900.00 $ 48,300.00 $ 16,196.38 $ 40,403.62 0.141329 $ 5,710.19 15 $ 106,200.00 $ 49,400.00 $ 13,646.92 $ 43,153.08 0.122894 $ 5,303.28 16 $ 107,500.00 $ 50,500.00 $ 10,791.51 $ 46,208.49 0.106865 $ 4,938.06 17 $ 108,800.00 $ 51,600.00 $ 7,593.46 $ 49,606.54 0.092926 $ 4,609.73 18 $ 110,100.00 $ 52,700.00 $ 4,011.65 $ 53,388.35 0.080805 $ 4,314.05 118 $ 42,000.00 0.080805 $ 3,393.81 PV of Cash flow $ 245,404.54 Intial Investment $ 570,000.00 Net Present Worth $ (39,595.46)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.