Question 1:

An investor has invested $600,000 in a new rental property. Her estimated annual costs are $16,000 and annual revenues are $48.000. What rate of return per year will investors make over a 30 year period if the property can be sold for $500000 at the end of the 30-year period?

Question 2:

Owing to perennial Complaints by students and faculty about the lack of parking spaces on campus. a parking garage on university property is being considered. Since there are no university funds available for the project, it will have to pay for itself from parking fees over a 15-year period. A 10% minimum attractive rate of return is deemed reasonable for consideration. The question is how many levels should be constructed. Based on the cost data shown below. determine how many levels should be built? Use incremental analysis.

Question 3:

An oil drilling can be obtained for $150,000. At the end of 6 years. it can be sold for $20,000. Compute the depreciation schedule for the drilling rig through year 4 using the following methods.

1. Sum-of-years digits depreciation
2. Double declining balance depreciation
3. MACRS depreciation ( assume 3- year MACRS class life)

Question 4:

The production supervisor of a plant in reviewing his records found that an assembly line had the following production record:

5 years ago 85.000

4 years ago 34.500

3 years ago 84.000

2 years ago $3.500

Last year ago $3000

After consulting with the product engineer. he changed the sequence on the assembly line. He believes that production will be $3,500 this year and will increase by $500 a year in each of the following 4 years. If this estimate of the future is correct. what will be the equivalent uniform annual benefit for the 10-year period? Assume interest at 8%.

Question 5:

Kale Tech is considering the following two equipment alternatives. Using the benefit-cost ratio analysis. determine the benefit per year for equipment Q to be preferable than P for a \(\Delta \mathrm{B} / \Delta \mathrm{C}\) value of 1.2. Use a MARR = 10%

Question 6:

A road between Philadelphia and Pittsburg. Pennsylvania, will have a most likely construction cost of $3.5 million per mile. Doubling this cost is considered to have a probability of 40%, and cutting it by 30% is considered to have a probability of 15%. The State's interest rate is 10%. and the road should last 50 years. What is the expected equivalent annual construction cost per mile? '.

Price: $16.0

Solution: The downloadable solution consists of 5 pages, 1100 words and 1 charts.
Deliverable: Word Document