Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. please type the answer 3. a project has an inves

PLEASE TYPE THE ANSWER 3. A project has an investment outlay of $7...

90.2K

Verified Solution

Question

Finance

PLEASE TYPE THE ANSWER

3. A project has an investment outlay of $7 million in year zero and $3 million in year 1. Operating cost is $3 million per annum and sales revenue of $6 million per annum commencing year 1. In year three there will be the need for an additional capital investment of $4 million. Appraisal life is 5 years. Assuming a discount rate of 8% per annum, compute the B/C ratio.

4. A project has capital cost of $10,000 in year 0 and $5000 in year 1. There is also the need for capital replacement at year 3 of $4000. Working capital is estimated at $5000 and is needed in year 1. Operating cost from years 2-5 is estimated at $5000 per annum. Revenue is projected to be $8000 per annum between years 2 - 5. Salvage value from sale of fixed assets will be $2000 in year 3 and $4000 in year 5. The working capital is recoverable at the end of year 5. Compute the B/C Ratio assuming the opportunity cost of capital is 25% per annum.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Juan is a salesman for L. L. Bowers Corp. He has a choice of three compensation...

Advance Math
Q

Business Law List the four types of consideration. 2. Can $1.00 be adequate consieration? Why or...

General Management
Q

An ideal mono atomic gas is undergoing a cyclic process as shown in the fig...

Physics
Q

QUESTION 5 2 POINTS Find the equation of the line with slope 1 5 and...

Geometry
Q

Given Set A 5 7 10 Set B 2 5 6 12 What is the...

Geometry
Q

What does the notation P(BIA) mean?Choose the correct answer below.O A. The probability of both...

Basic Math
Q

Ilene rents her second home. During the year, Ilene reported a net loss of $15,000...

Accounting
Q

Hello, I need some help figuring out how to complete these accounting problems. If possible,...

Accounting
Q

Lavender purchased PPE on January 1, 2022 for $2,259,000. The production teams estimates that the...

Accounting
Q

Multiple choice When making decisons, what qualitative items need to be considered? Quality Timing Both...

Accounting
Q

Exercise 14-6 Straight-Line: Recording bond issuance and premium amortization LO P1, P3 Woodwick Company issues...

Accounting
Q

Kingbird, Inc. purchased a tractor trailer for $137000. Kingbird uses the units-of-activity method for depreciating...

Accounting