ACCOUNTING AND FINANCIAL ENGINEERING - EXAMPLE 34.24 : (a) The net present value of an engineering project is given by V. Let Q = summation of [ T / (1 + I) ^ N ] from N = A to N = B, where P = project cost, T = tax inflow, N = duration. If V = P + Q where P = -$1000, T = $275, I = 0.12 (means 12 % , capital cost of project per year), A = 1 year, B = 5 years, calculate the value of V. (b) The present value tax shields are W = $ (11.9725, 9.1486, 6.5579, 4.1811, 2.0005) in 5 beginning balances of an engineering project. Find the adjusted present value of the engineering project X, when X = V + (summation of the values of W).
- 1 Answers
- 1391 Views
- I also Faced
- E-Mail Answers
Answer Posted / kangchuentat
ACCOUNTING AND FINANCIAL ENGINEERING - ANSWER 34.24 : (a) Let ^ to be mathematical symbol for power. From N = A = 1 year to N = B = 5 years, Q = summation of [ T / (1 + I) ^ N ] = T { summation of [ (1 + I) ^ (-N) ] } = $275 { summation of [ (1.12) ^ (-N) ] } = $275 [ (1.12) ^ (-1) + (1.12) ^ (-2) + (1.12) ^ (-3) + (1.12) ^ (-4) + (1.12) ^ (-5) ] = $991.31. Then V = P + Q = -$1000 + $991.31 = -$8.6865. (b) X = V + (summation of the values of W) = -$8.6865 + $ (11.9725 + 9.1486 + 6.5579 + 4.1811 + 2.0005) = $25.1741. The answer is given by Kang Chuen Tat; PO Box 6263, Dandenong, Victoria VIC 3175, Australia; SMS +61405421706; chuentat@hotmail.com; http://kangchuentat.wordpress.com.
| Is This Answer Correct ? | 0 Yes | 0 No |
Post New Answer View All Answers
What is the angle of repose and what are its applications in the chemical industry?
A shiny brown colored element ‘x’ on heating in air becomes black in cooler name the element ‘x’and black colored compound formed?
What are angle of repose applications in the chemical industry?
How can separation of chiral chemicals affect the chemical and/or pharmaceutical industries?
What is the angle of repose?
What are the design considerations for a piping system for the transfer of slurries?
hi sir/madam i need placement paper of last years of DRDO in chemical sream...... send me the question paper as soon as possible on my email address praveen.zone@gmail.com
What is a solvent?
Explain the difference between cfm (cubic feet per minute) and scfm (standard cubic feet per minute)?
Define a solvent?
Explain the use of gear pumps in motor?
What are some guidelines for designing for liquid and gas velocities in process plant piping?
Explain what information is needed to specify a mixer?
Name some guidelines for designing for liquid and gas velocities in process plant piping?
what is R1,R2,R3, R4........?
