Question
In: Finance
Bridgton Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs $138,000, has a...
|
Bridgton Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs $138,000, has a 4-year life, and costs $13,800 per year to operate. The relevant discount rate is 12 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $11,500 at the end of the project’s life. The relevant tax rate is 25 percent. All cash flows occur at the end of the year. What is the equivalent annual cost (EAC) of this equipment? (A negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
Solutions
Expert Solution
Solution :
The equivalent annual cost (EAC) of this equipment is = - $ 45,354.71
Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.
jeff jeffy answered 1 month agoRelated Solutions
Bridgton Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs $116,000, has a...
Bridgton Golf Academy is evaluating new golf practice equipment.
The "Dimple-Max" equipment costs $116,000, has a 6-year life, and
costs $9,300 per year to operate. The relevant discount rate is 10
percent. Assume that the straight-line depreciation method is used
and that the equipment is fully depreciated to zero. Furthermore,
assume the equipment has a salvage value of $8,700 at the end of
the project’s life. The relevant tax rate is 21 percent. All cash
flows occur at the end...
Bridgton Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs $104,000, has a...
Bridgton Golf Academy is evaluating new golf practice equipment.
The "Dimple-Max" equipment costs $104,000, has a 5 year life, and
costs $9,600 per year to operate. The relevant discount rate is 13
percent. Assume that the straight-line depreciation method is used
and that the equipment is fully depreciated to zero. Furthermore,
assume the equipment has a salvage value of $23,000 at the end of
the project’s life. The relevant tax rate is 34 percent. All cash
flows occur at the...
Bridgton Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs $146,000, has a...
Bridgton Golf Academy is evaluating new golf practice equipment.
The "Dimple-Max" equipment costs $146,000, has a 4-year life, and
costs $10,300 per year to operate. The relevant discount rate is 12
percent. Assume that the straight-line depreciation method is used
and that the equipment is fully depreciated to zero. Furthermore,
assume the equipment has a salvage value of $10,700 at the end of
the project’s life. The relevant tax rate is 21 percent. All cash
flows occur at the end...
Bridgton Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs $104,000, has a...
Bridgton Golf Academy is evaluating new golf practice equipment.
The "Dimple-Max" equipment costs $104,000, has a 5-year life, and
costs $8,900 per year to operate. The relevant discount rate is 10
percent. Assume that the straight-line depreciation method is used
and that the equipment is fully depreciated to zero. Furthermore,
assume the equipment has a salvage value of $7,900 at the end of
the project’s life. The relevant tax rate is 22 percent. All cash
flows occur at the end...
Bridgton Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs $104,000, has a...
Bridgton Golf Academy is evaluating new golf practice equipment.
The "Dimple-Max" equipment costs $104,000, has a 5-year life, and
costs $8,900 per year to operate. The relevant discount rate is 10
percent. Assume that the straight-line depreciation method is used
and that the equipment is fully depreciated to zero. Furthermore,
assume the equipment has a salvage value of $7,900 at the end of
the project’s life. The relevant tax rate is 22 percent. All cash
flows occur at the end...
Bridgton Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs $110,000, has a...
Bridgton Golf Academy is evaluating new golf practice equipment.
The "Dimple-Max" equipment costs $110,000, has a 4-year life, and
costs $9,100 per year to operate. The relevant discount rate is 12
percent. Assume that the straight-line depreciation method is used
and that the equipment is fully depreciated to zero. Furthermore,
assume the equipment has a salvage value of $8,300 at the end of
the project’s life. The relevant tax rate is 24 percent. All cash
flows occur at the end...
Bridgton Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs $146,000, has a...
Bridgton Golf Academy is evaluating new golf practice equipment.
The "Dimple-Max" equipment costs $146,000, has a 4-year life, and
costs $10,300 per year to operate. The relevant discount rate is 12
percent. Assume that the straight-line depreciation method is used
and that the equipment is fully depreciated to zero. Furthermore,
assume the equipment has a salvage value of $10,700 at the end of
the project’s life. The relevant tax rate is 21 percent. All cash
flows occur at the end...
Bridgton Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs $140,000, has a...
Bridgton Golf Academy is evaluating new golf practice equipment.
The "Dimple-Max" equipment costs $140,000, has a 5-year life, and
costs $10,100 per year to operate. The relevant discount rate is 10
percent. Assume that the straight-line depreciation method is used
and that the equipment is fully depreciated to zero. Furthermore,
assume the equipment has a salvage value of $10,300 at the end of
the project’s life. The relevant tax rate is 24 percent. All cash
flows occur at the end...
Bridgton Golf Academy is evaluating different golf practice equipment. The “Dimple-Max” equipment costs $94,000, has a...
Bridgton Golf Academy is evaluating different golf practice
equipment. The “Dimple-Max” equipment costs $94,000, has a
three-year life, and costs $8,600 per year to operate. The relevant
discount rate is 12 percent. Assume that the straight-line
depreciation method is used and that the equipment is fully
depreciated to zero. Furthermore, assume the equipment has a
salvage value of $18,000 at the end of the project's life. The
relevant tax rate is 34 percent. All cash flows occur at the end...
Bridgton Golf Academy is evaluating different golf practice equipment. The “Dimple-Max” equipment costs $94,000, has a...
Bridgton Golf Academy is evaluating different golf practice
equipment. The “Dimple-Max” equipment costs $94,000, has a
three-year life, and costs $8,600 per year to operate. The relevant
discount rate is 12 percent. Assume that the straight-line
depreciation method is used and that the equipment is fully
depreciated to zero. Furthermore, assume the equipment has a
salvage value of $18,000 at the end of the project's life. The
relevant tax rate is 34 percent. All cash flows occur at the end...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Which of the following would be the MOST effective countermeasure against malicious programming that rounds down...
- why are vacations and severance pay considered as a paid time off
- A company examines its inventory policy and considers using an economic order quantity (EOQ) approach. They...
- Consider the example of a mobile banking IT service that you may routinely use on your...
- how do you think that educators can improve the achievement levels of children from low-income or...
- You learned that one of your smaller, nonstrategic, suppliers directly emailed your salespeople (without your knowledge)...
- Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year....
ADVERTISEMENT