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NEW QUESTION: 1
Mid-State Electric Company must clean up the water released from its generating plant. The company's cost of capital is 10 percent for average projects, and that rate is normally adjusted up or down by 2 percentage points for high- and low-risk projects. Clean-up Plan A, which is of average risk, has an initial cost of -$1,000 at Time 0, and its operating cost will be -$100 per year for its 10-year life. Plan B, which is a high-risk project, has an initial cost of -$300, and its annual operating cost over Years 1 to 10 will be
-$200. What is the proper PV of costs for the better project?
A. -$1,728.19
B. -$1,642.02
C. -$1,430.04
D. -$1,525.88
E. -$1,614.46
Answer: E
Explanation:
Explanation/Reference:
Explanation:
The first thing to note is that risky cash outflows should be discounted at a lower discount rate, so in this case we would discount the riskier Project B's cash flows at 10% - 2% = 8%. Project A's cash flows would be discounted at 10%.
Now we would find the PV of the costs as follows:
Project AProject B
CF(0) = -1,000CF(0) =-300
CF(1-10) = -100CF(1-10)=-200
I =10.0I= 8.0
Solve for NPV = -$1,614.46. Solve for NPV = -$1,642.02.
Project A has the lower PV of costs. If Project B had been evaluated with a 12% cost of capital, its PV of costs would have been -$1,430.04, but that would have been wrong.

NEW QUESTION: 2
You are the NACE Inspector on a job where the Owner's specification requites you to perform a twice daily check of blast pressure at the nozzle. It is now day 30 on the job and all of your readings have been within compliance. The Contractor complains that these checks taking up much time and in view of the compliant results they are unnecessary.
Your FIRST preferred course of action is to:
A. Skip the checks as you are. confident the blast pressure is OK
B. Keep doing the checks regardless
C. Keep doing the checks and consult the Owner's representative for direction
D. Skip the checks and just record the same readings as you have been getting
Answer: C

NEW QUESTION: 3
You issue the ping interface t1-1/1/0 bypass-routing count 1000 rapid command.
Which statement is correct?
A. The count parameter allows the router to count the number of pings for logging purposes.
B. The count parameter allows the router to pause for 1000 seconds before sending out a ping.
C. The count parameter allows the router to send out 1000 pings and then stop.
D. The count parameter creates a counter that you can view with the show firewall command.
Answer: C