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NEW QUESTION: 1
The management of Intelligent Semiconductor is considering two mutually exclusive projects, which are detailed below:
Project A
Electron looping apparatus
Initial investment outlay ($6,000,000)
t1: $2,750,000
t2: $1,250,000
t3: $1,250,000
t4: $2,750,000
Cost of capital of 10.55%
Project B
Optical switching apparatus
Initial investment outlay ($5,040,000)
t1: $1,000,000
t2: $1,000,000
t3: $1,500,000
t4: $1,500,000
t5: $1,500,000
t6: $750,000
t7: $300,000
t8: $50,000
Cost of capital of 10.55%
Assuming no taxes, a $0.00 salvage value at the end of the each project's life, as well as the ability to replicate each project identically at the end of its lifespan, which is the superior investment according to the Common Life approach? Additionally, what are the NPV and IRR of the superior project over the common life?
A. Project B, NPV $287,725.32; IRR 12.38%
B. None of these answers
C. Project B, NPV $305,221; IRR 13.65%
D. Project A, NPV $465,515; IRR 12.78%
E. Project A, NPV $462,038; IRR 12.72%
Answer: E
Explanation:
Explanation/Reference:
Explanation:
The Replacement Chain, or "Common Life" approach, is a useful method which allows two or more projects with unequal lives to be examined. In the Replacement Chain approach, the lifespans of each project being examined are multiplied in such a way that the resulting projects share a "common life." In this example, the Optical Switching apparatus has a lifespan of eight periods, while the electron looping apparatus has a four-period lifespan. The common multiple of both projects is 8, and by replicating the cash flows of the electron looping project through period 4, i.e. by carrying out the project for an additional cycle, we can arrive at a "common life" for both projects. Carrying out the electron-looping project through eight periods will yield the following series of cash flows:
Electron looping apparatus
t0: ($6,000,000)
t1: $2,750,000
t2: $1,250,000
t3: $1,250,000
t4: [$2,750,000 + ($6,000,000)]=($3,250,000)
t5: $2,750,000
t6: $1,250,000
t7: $1,250,000
t8: $2,750,000
By incorporating these cash flows into your calculator, you will find a NPV of $462,038 for this project, as well as an IRR of 12.72%. The Optical Switching apparatus has a NPV of $287,725 and an IRR of 12.38%.

NEW QUESTION: 2
Adrian, the Network Administrator for Peach Tree Inc., wants to install a new computer on the company's network. He asks his assistant to make a boot disk with minimum files. The boot disk will be used to boot the computer, which does not have an operating system installed, yet. Which of the following files will he include on the disk?
A. IO.SYS, MSDOS.SYS, COMMAND.COM, and AUTOEXEC.BAT.
B. IO.SYS, MSDOS.SYS, COMMAND.COM, and CONFIG.SYS.
C. IO.SYS, MSDOS.SYS, and COMMAND.COM.
D. IO.SYS, MSDOS.SYS, COMMAND.COM, and FDISK.
Answer: C

NEW QUESTION: 3
You want your inline Cisco IPS appliance to drop packets that pose the most severe risk to your network, especially to the servers on your DMZ. Which two parameters should you set to protect your DMZ servers in the most-time-efficient manner? (Choose two.)
A. event action override
B. reputation filter
C. global correlation
D. target value rating
E. signature fidelity rating
F. event action filter
Answer: A,D