# Economics Essay

289 WordsMar 10, 20142 Pages
Answers to Recommended Problems - Chapter 5 5.3- a) A – no payback period B – 2 years C – 3 years D – 1 year b) It could be considered as a two separate projects, where the first one is recovered in one year and the second one with investments in year 2 and 3 is recovered in year six c) A – no payback period B – 2 years C – 4 years D – 1 year 5.5- (d) 5.9- PW(8%) = \$1,757,018 5.10- a) PW(15%)A = \$7,818 PW(15%)B = \$10,318 PW(15%)C = \$7,531 PW(15%)D = \$1,530 b) FW(15%)A = \$11,890 FW(15%)B = \$15,694 FW(15%)C = \$11,454 FW(15%)D = \$2,327 All the projects are acceptable 5.21- a) PW(10%)A = \$404.40 PW(10%)B = \$191.59 PW(10%)C = \$0.53 b) FW(10%)A = \$716.42 FW(10%)B = \$308.56 FW(10%)C = \$0.70 c) PW(i)A = \$368.07 PW(i)B = \$182.52 PW(i)C = \$0.53 5.27- a) CE(5%) = \$7,926,846 b) CE(5%) = \$7,604,852 c) CE(10%) = \$6,314,738 (10 year cycle) CE(10%) = \$6,174,596 (20 year cycle) 5.28- CE(8%) = 1,165,019 5.32- AE(13%) = \$934.92 5.34- AE(10%)A = -\$78.47 Reject AE(10%)B = \$338.57 Accept AE(10%)C = \$162.77 Accept AE(10%)D = \$1,868.31 Accept 5.37- AE(10%) = \$390.98 Accept 5.38- CE(i) = \$144,300 Additional funds should be \$44,300 5.40- AEC(12%) = \$29,616 5.44- a) X = \$2,309.55 b) AE(15%) = \$526.46