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Help Save& Exit Submit 2 A company that makes food-friendly silicone (for use in

ID: 2820309 • Letter: H

Question

Help Save& Exit Submit 2 A company that makes food-friendly silicone (for use in cooking and baking pan coatings) is considering the independent projects shown, all of which can be viable for only 10 years. If the company's MARR is 14% per year, determine which should be selected on the basis of a present worth analysis. The financial values are in $1000 units. 10 nual Net income, per Year vage Value $-1,100 --$250 $450 $1300 $1300 $6 The present worth of project A is determined to be $ The present worth of project B is determined to be $ The present worth of project C is determined to be $ The present worth of project D is determined to be $ References Project A is (Click to select accepted rejected aidk to seleco B Project C is (Click to select) Project D is Click toselect) K Prev 2 of 10 Next

Explanation / Answer

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Project A A B C D E F G H I J K 1 Year 0 1 2 3 4 5 6 7 8 9 10 2 First Cost -1100 3 Annual Net income 250 250 250 250 250 250 250 250 250 250 4 Salvage value 5 5 Total Cash flow -1100 250 250 250 250 250 250 250 250 250 255 6 MARR 14% Present worth $205.38 Using Excel Formula =NPV(A6,B5:K5)+A5 Project A should Be accepted Project B A B C D E F G H I J K 1 Year 0 1 2 3 4 5 6 7 8 9 10 2 First Cost -1900 3 Annual Net income 450 450 450 450 450 450 450 450 450 450 4 Salvage value 7 5 Total Cash flow -1900 450 450 450 450 450 450 450 450 450 457 6 MARR 14% Present worth $449.14 Using Excel Formula =NPV(A6,B5:K5)+A5 Project B should Be accepted Project C A B C D E F G H I J K 1 Year 0 1 2 3 4 5 6 7 8 9 10 2 First Cost -4300 3 Annual Net income 1300 1300 1300 1300 1300 1300 1300 1300 1300 1300 4 Salvage value 6 5 Total Cash flow -4300 1300 1300 1300 1300 1300 1300 1300 1300 1300 1306 6 MARR 14% Present worth $2,482.57 Using Excel Formula =NPV(A6,B5:K5)+A5 Project C should Be accepted Project D A B C D E F G H I J K 1 Year 0 1 2 3 4 5 6 7 8 9 10 2 First Cost -5300 3 Annual Net income 1300 1300 1300 1300 1300 1300 1300 1300 1300 1300 4 Salvage value 6 5 Total Cash flow -5300 1300 1300 1300 1300 1300 1300 1300 1300 1300 1306 6 MARR 14% Present worth $1,482.57 Using Excel Formula =NPV(A6,B5:K5)+A5 Project D should Be accepted