1. A company has purchased a new machine for their business for 82000. It expee's yearly benefits from this purchase of 8300 at the end of year I, 8000 for year 2, $500 for year 3, 600 for year 0, ana700 for year 5. There is no salvage value. What is the rate of return? (Draw the cash flow. Must use trial and error and interpolation to calculate ROR)
2. Iss city M evaluating two alternate hazardous waste facilities, each with a projected RLe of 10 years. The cash flows in dollars for each facility are shown M the table below. If the city uses a 1.1111. of 14%, which is the most desirable alternative based on a rate of return analysis,
|
Initial Coal
|
-615,000
|
-450,000
|
|
Annual 5.4.0 Coats Annual Benefits
|
-10,000
158,006
|
-15,000
85,000
|
|
Salvage Value
|
65,000
|
45,006
|