MGCR 341 Study Guide - Quiz Guide: Gust Co. Ltd., .Com, 0 (Year)
16 Oct 2015
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Laval construction must choose between two pieces of equipment. ,000 and it needs to be replaced every five years. This tamper will require ,000 of maintenance each year. Tamper b costs ,000, but it will last seven years. Maintenance costs for tamper b are ,000 per year. Laval incurs all maintenance costs at the end of the year. The appropriate discount rate for laval construction is 12 percent. Choose tamper b (note: the problem assumes that the company needs one machine, tamper a or b, in order to implement some other positive npv project . ) Assume you are considering taking one of two mutually exclusive projects: 100: calculate the irr for these projects. 10: for which discount rates is the npv of project a greater than the npv of project b: Solution: calculate the irr for these projects. %94. 12: for which discount rates is the npv of project a greater than the npv of project b:
