The firm = s MSRR is 8%, the remaining service life of the bus fleet is 5 years,

Question

The firm = s MSRR is 8%, the remaining service life of the bus fleet is 5 years, and available data as follows Which of the plans is NOT feasible? With the information given above, on what basis is feasibility of a plan decided? Based on the Rotl, which plan is the best? What is the annual equivalent worth for plan 3 to the nearest SI? Which plan would be best if return on incremental investment were considered? When all future cash flows are expressed in then-current dollars, the rate that should be used to find the present worth is the To convert actual dollars into real dollars, it is necessary to

Explanation / Answer

1. B) Plan 2 is not feasible becuase the present worth is negative

2) Answer is option D, the feasibility is deicded on the basis of present value of the cash flows if it 0 or greater than 0 the project can be accepted

3) Plan 3 is best ( Option C is correct answer) - because the return on total investemnt is highest in case of plan 3

4) Option D is correct ( annual equivalent worth cannot be caluclated because the number of years are not provided)

5) option A is coorect ( Not information to tell because no information regarding the incremental investment is provided)

6) Option A is correct ( Present value is calculated on the firms MARR)

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