(Each Problem worth 5 Points) Please complete any 4 problems (must do problem 3) and complete any 1 remaining for Bonus worth 1.5 points. Please show all work.

1.A drill press costs $30,000 and is expected to have a 10 year life. The drill press will be depreciated on a straight-line basis over 10 years to a zero estimated salvage value. This machine is expected to reduce the firm's cash operating costs by $4,500 per year. If the firm is in the 40 percent marginal tax bracket, determine the annual net cash flows generated by the drill press.

2.Felix Industries purchased a grinder 5 years ago for $15,000. It is being depreciated on a straight-line basis over 15 years to an estimated salvage value of zero. It could be sold now for $6,000. The firm is considering selling it and purchasing a new one. The new grinder would cost $25,000 installed and would be depreciated on a straight-line basis over 10 years to a zero estimated salvage value. The company's marginal tax rate is 40%. Determine the net investment if the old grinder is sold and the new one purchased.

3.Degnan Dance Company, Inc., a manufacturer of dance and exercise apparel, is considering replacing an existing piece of equipment with a more sophisticated machine. The following information is given as of today.

Table One:
|Facts | | |Existing Machine | |Proposed Machine | |Costs | 100,000.00 | | 150,000.00 | |Installation | 10,000.00 | | 20,000.00 | |MACRS |5 - Years | |5 - Years | |Market Value | 105,000.00 | | | |Purchased |2 years ago | | |

...Project Management, 2e (Pinto)
Chapter 3 Project Selection and Portfolio Management
3.1 True/False
1) Numeric project selection models, by their very nature, employ objective values.
Answer: FALSE
Diff: 2
Section: 3.1 Project Selection
Skill: Definition
AACSB Tag: Reflective
2) Every decision model contains both objective and subjective factors.
Answer: TRUE
Diff: 3
Section: 3.1 Project Selection
Skill: Factual
AACSB Tag: Reflective
3) A simplified scoring model addresses all the weakness of a checklist model for project screening.
Answer: TRUE
Diff: 1
Section: 3.2 Approaches to Project Screening and Selection
Skill: Conceptual
AACSB Tag: Reflective
4) The Analytical Hierarchy Process elegantly addresses scaling issues in criteria and negative utility in alternative scores.
Answer: FALSE
Diff: 1
Section: 3.2 Approaches to Project Screening and Selection
Skill: Conceptual
AACSB Tag: Analytic Skills
5) The efficient frontier in a profile model is the set of options that offers a maximum return for a given level of risk or a minimum risk for every level of return.
Answer: TRUE
Diff: 2
Section: 3.2 Approaches to Project Screening and Selection
Skill: Factual
AACSB Tag: Analytic Skills
6) The present value of money is lower the further out in the future I expect to spend it.
Answer:...

...Net Present Value
Net present value (NPV) and Internal rate of return (IRR) are used to determine whether to accept a project or not.Net Present Value (NPV)Net present value is the difference between the present value of cash inflows and the present value of cash outflows. It is used in capital budgeting to analyze the profitability of an investment or project.
NPV= sum[CFt/(1+r)t]-C0
CFt– cash flow in the time t
C0 – initial investment
r – periodic interest rate
NPV rule:
Accept all independent projects with NPV greater than 0 as they add value to shareholder. In case of mutually exclusive projects, the project with the highest NPVshould be chosen
Advantages:
Direct measure of the dollar contribution to the stockholders.
NPV method is preferable for non-normal cash flows (e.g. negative cash flows)
Disadvantage:
Does NOT measure the project size.
Internal Rate of Return (IRR)
The discount rate makes the net present value of all cash flows from a project equal to zero. The higher a project's internal rate of return, the more desirable it is to undertake the project. IRR can be used to rank several prospective projects a firm is considering.
NPV=...

...ANNEXTURE
Questionnaire
Dear respondent,
I m a student of “Bhagwan mahavir college of business administration, surat” conducting a survey for my project preparation, as the requirement of partial fulfilment of subject project in third year(semester-VI) BBA in surat city of a study on “A COMPARATIVE STUDY ON BRITANNIA AND PARLE COMPANY IN SURAT CITY (A SURVEY ON BISCUIT )” I assure that the information given by you are strictly used for academic purpose only. I request you to help me in gathering information by filling up yhe following information.
Thank you,
Abhishek sojitra
Bhagwan mahavir business administration
Top of Form
1) Do you eat biscuit?
Yes
No
2) Select your likely tastes for biscuit?
Sweet
Salty
Sweet & Salty
Cream biscuit
Others
3) What type of biscuit you normally prefer?
Branded
Bakery product
4) How often do you eat biscuit?
Once in a week
Once in a month
Once in a fortnight
Alternate days
Every day
5) When do you have biscuit?
At breakfast time
At evening
Any time
6) Which brand you normally buy?
Britannia
Parle
Both
Other:
7) From where do you buy biscuit?
Provisional store
Hawkers
Convenience store
Other:
8) Out of the following...

...“THE ADVANTAGES AND DISADVANTAGES OF USINFG NPV (NET PRESENT VALUE) AND IRR (INTERNAL RATE OF RETURN)”
NPV (NET PRESENT VALUE)
The difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of an investment or project. NPV analysis is sensitive to the reliability of future cash inflows that an investment orproject will yield.
NPV compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account. If the NPV of a prospective project is positive, it should be accepted. However, if NPV is negative, the projectshould probably be rejected because cash flows will also be negative.
Net present value, or NPV, is one of the calculations business managers use to evaluate capital projects. A capital project is a long-term investment or improvement, such as building a new store. The NPV calculation determines the present value of the project's projected future income. In the calculation, the present value of the project's cost is subtracted from the present value of future income. A positive net present value usually means you should accept or...

...Business.
Q.2 What are four purposes those are accomplished by opportunity studies?
Q.3 Write a note on Material Inputs and Factory Supplies while describing the characteristics of Raw
Materiel those should be assessed during the evaluation of various production processes.
Q.4 What are different types of production processes? What criteria are used for obtaining process
technologies in developing countries, particularly for small industrial business?
Q.5 What does the term Marketing Mix mean? Describe briefly the function of vari9us marketing
instruments.
Q.6 Differentiate between Location and Site. Describe various Input, Output and other locational factors
those must be considered for assessing project feasibility.
Q.7 What are the components of Investment Cost? Give a brief account of each.
Q.8 Explain briefly the use of Profitability Index (P.I), Net Present Value (NPV), Internal Rate of Return
(IRR) and Pay back period as an analytical techniques used in project appraisal.
Q.9 A firm is considering replacing a computer system with a new one. Purchase price of new computer
is Rs. 80,000.00 and its installation costs are Rs. 1,000.00. the cash flow from the sale of the old
computer is expected to be Rs. 20,000.00. the CFAT, after the installation of the new computer...

...A constant deposit at the beginning of each year represents an annuity due.
PVIFA of an annuity due is equal to : PVIFA of an ordinary annuity x (1 + r)
To provide a sum of Rs.50,000 at the end of 10 years the annual deposit should be
Rs.50,000
A = FVIFA(12%, 10 years) x (1.12)
Rs.50,000
= = Rs.2544
17.549 x 1.12
24. The discounted value of Rs.20,000 receivable at the beginning of each year from 2005 to 2009, evaluated as at the beginning of 2004 (or end of 2003) is:
Rs.20,000 x PVIFA (12%, 5 years)
= Rs.20,000 x 3.605 = Rs.72,100.
The discounted value of Rs.72,100 evaluated at the end of 2000 is
Rs.72,100 x PVIF (12%, 3 years)
= Rs.72,100 x 0.712 = Rs.51,335
If A is the amount deposited at the end of each year from 1995 to 2000 then
A x FVIFA (12%, 6 years) = Rs.51,335
A x 8.115 = Rs.51,335
A = Rs.51,335 / 8.115 = Rs.6326
25. The discounted value of the annuity of Rs.2000 receivable for 30 years, evaluated as at the end of 9th year is:
Rs.2,000 x PVIFA (10%, 30 years) = Rs.2,000 x 9.427 = Rs.18,854
The present value of Rs.18,854 is:
Rs.18,854 x PVIF (10%, 9 years)
= Rs.18,854 x 0.424
= Rs.7,994
26. 30 percent of the pension amount is
0.30 x Rs.600 = Rs.180
Assuming that the monthly interest rate corresponding to an annual interest rate of 12% is 1%, the discounted value of an annuity of Rs.180 receivable...

...and the amount of capital employed (Stern Stewart and Co., 2012). EVA is an adaptation of the already established Residual Income Measure. The distinction between the two measures lies in the fact that EVA not only accounts for the cost of capital, but also considers several GAAP-adjustments amongst others which will be discussed in the literature review. The formula for EVA is depicted below:
Where
EVA ANOPAT c*
= Economic Value Added = Adjusted Net Operating Profit After Taxes = Cost of Capital %: weighted average including debt & equity
The main argument of EVA proponents is that the accounting earnings metrics exclude any costs associated with equity. EVA addresses this weakness and includes more complete information about company performance and should therefore be more closely associated with value as interpreted by the market. Furthermore, the EVA metric addresses the flaws in GAAP accounting by introducing a substantial 160 GAAP adjustments. Despite having so many adjustments to choose from, many companies tend to select around twenty of these but in reality only use five or six. What this paper will investigate is the effect of using EVA, as opposed to more traditional accounting measures of profit, as a performance measure for management incentive plans.
A suitable performance measure should evaluate how the actions of upper management affect the firm’s value (Sharma, 2010)....

...
INTRODUCTION
The Project assigned to me was “A STUDY ON CUSTOMER SATISFACTIOIN REGARDING AFTER SALES SERVICES OF MAHINDRA&MAHINDRA AT SUTARIA AUTOMOBILES SERVICE CENTRE, IN BELGAUM DIST”.
This study will help me to find and customer satisfaction level of the customer for authorized M&M service station in Belgaum dist, To know the reason for decline of customers at service station, To know the perception of customers regarding the charges or rates offered by the service station and To know any suggestion from customers to improve the service station.
The study is scheduled through primary data and other information thereby preparing Questionnaire, which focus of various variables, and attributes that are important to know the satisfaction level and the factors affecting the purchase decision.
The survey caused in the Belgaum Dist with the sample size of 100.The collected data are tabulated and analyzed data and all suggestions are given according to the analyzed data graphs and charts are used to illustrate the statistical data and findings.
INTRODUCTION ABOUT AUTOMOBILES INDUSTRY:
History and development of Automobiles also marks the dynamism in technological growth men have achieved. From the days of horseless carriages to the modern-age self-guided automobiles that are designed meticulously using...

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