Question
In: Finance
The Cornchopper Company is considering the purchase of a new harvester. The new harvester is not...
|
The Cornchopper Company is considering the purchase of a new harvester. |
|
The new harvester is not expected to affect revenue, but operating expenses will be reduced by $14,600 per year for 10 years. |
|
The old harvester is now 5 years old, with 10 years of its scheduled life remaining. It was originally purchased for $91,000 and has been depreciated by the straight-line method. |
| The old harvester can be sold for $22,600 today. |
| The new harvester will be depreciated by the straight-line method over its 10-year life. |
| The corporate tax rate is 21 percent. |
| The firm’s required rate of return is 14 percent. |
|
The initial investment, the proceeds from selling the old harvester, and any resulting tax effects occur immediately. |
|
All other cash flows occur at year-end. |
|
The market value of each harvester at the end of its economic life is zero. |
|
Determine the break-even purchase price in terms of present value of the harvester. This break-even purchase price is the price at which the project’s NPV is zero. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
please answer this question. this is my 3rd time posting it
Solutions
jeff jeffy answered 2 hours agoRelated Solutions
The Cornchopper Company is considering the purchase of a new harvester. The new harvester is not...
The Cornchopper Company is considering the purchase of a new
harvester.
The new harvester is not expected to affect revenues, but
pretax operating expenses will be reduced by $12,100 per year for
10 years.
The old harvester is now 5 years old, with 10 years of its
scheduled life remaining. It was originally purchased for $52,500
and has been depreciated by the straight-line method.
The old harvester can be sold for $20,100 today.
The new harvester will be depreciated by...
The Cornchopper Company is considering the purchase of a new harvester. The new harvester is not...
The Cornchopper Company is considering the purchase of a new
harvester. The new harvester is not expected to affect revenues,
but pretax operating expenses will be reduced by $12,300 per year
for 10 years. The old harvester is now 5 years old, with 10 years
of its scheduled life remaining. It was originally purchased for
$55,500 and has been depreciated by the straight-line method. The
old harvester can be sold for $20,300 today. The new harvester will
be depreciated by...
The Cornchopper Company is considering the purchase of a new harvester. The new harvester is not...
The Cornchopper Company is considering the purchase of a new
harvester.
The new harvester is not expected to affect revenue, but
operating expenses will be reduced by $13,100 per year for 10
years.
The old harvester is now 5 years old, with 10 years of its
scheduled life remaining. It was originally purchased for $67,000
and has been depreciated by the straight-line method.
The old harvester can be sold for $21,100 today.
The new harvester will be depreciated by the...
The Cornchopper Company is considering the purchase of a new harvester. The new harvester is not...
The Cornchopper Company is considering the purchase of a new
harvester.
The new harvester is not expected to affect revenues, but
pretax operating expenses will be reduced by $12,100 per year for
10 years.
The old harvester is now 5 years old, with 10 years of its
scheduled life remaining. It was originally purchased for $52,500
and has been depreciated by the straight-line method.
The old harvester can be sold for $20,100 today.
The new harvester will be depreciated by...
The Cornchopper Company is considering the purchase of a new harvester. The new harvester is not...
The Cornchopper Company is considering the purchase of a new
harvester.
The new harvester is not expected to affect revenue, but
operating expenses will be reduced by $13,400 per year for 10
years.
The old harvester is now 5 years old, with 10 years of its
scheduled life remaining. It was originally purchased for $71,000
and has been depreciated by the straight-line method.
The old harvester can be sold for $21,400 today.
The new harvester will be depreciated by the...
The Cornchopper Company is considering the purchase of a new harvester. The new harvester is not...
The Cornchopper Company is considering the purchase of a new
harvester. The new harvester is not expected to affect revenues,
but pretax operating expenses will be reduced by $13,400 per year
for 10 years. The old harvester is now 5 years old, with 10 years
of its scheduled life remaining. It was originally purchased for
$70,500 and has been depreciated by the straight-line method. The
old harvester can be sold for $21,400 today. The new harvester will
be depreciated by...
The Cornchopper Company is considering the purchase of a new harvester. The new harvester is not...
The Cornchopper Company is considering the purchase of a new
harvester.
The new harvester is not expected to affect revenue, but
operating expenses will be reduced by $13,400 per year for 10
years.
The old harvester is now 5 years old, with 10 years of its
scheduled life remaining. It was originally purchased for $71,000
and has been depreciated by the straight-line method.
The old harvester can be sold for $21,400 today.
The new harvester will be depreciated by the...
The Cornchopper Company is considering the purchase of a new harvester. The new harvester is not...
The Cornchopper Company is considering the purchase of a new
harvester.
The new harvester is not expected to affect revenue, but
operating expenses will be reduced by $14,300 per year for 10
years.
The old harvester is now 5 years old, with 10 years of its
scheduled life remaining. It was originally purchased for $86,000
and has been depreciated by the straight-line method.
The old harvester can be sold for $22,300 today.
The new harvester will be depreciated by the...
Eastside Farms is considering the purchase of a mechanical harvester. It costs $180,000 and is expected...
Eastside Farms is considering the purchase of a mechanical
harvester. It costs $180,000 and is expected to last for five
years. They presently hire 10 workers at $3,000 per month for each
of the six harvesting months each year. The equipment would
eliminate the need for 3 workers. Eastside projects a salvage value
of $23,000. Ignoring the tax implications and assuming the
opportunity cost of funds is 8.0%, what is the Net Present Value
(NPV) of this proposed investment?
Eastside Farms is considering the purchase of a mechanical harvester. It costs $180,000 and is expected...
Eastside Farms is considering the purchase of a mechanical
harvester. It costs $180,000 and is expected to last for five
years. They presently hire 10 workers at $3,000 per month for each
of the six harvesting months each year. The equipment would
eliminate the need for 3 workers. Eastside projects a salvage value
of $23,000. Ignoring the tax implications and assuming the
opportunity cost of funds is 8.0%, what is the Net Present Value
(NPV) of this proposed investment?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- describe how goal theory relates to employee motivation
- Psychology of Personality!!!!!!!!! What effect does gender have on personality?
- Even though there are new technologies to combat information security incidents, they still occur regularly. Find...
- The Nelson Company has $1,875,000 in current assets and $625,000 in current liabilities. Its initial inventory...
- A stock price is currently $200. Over each of the next two six-month periods it is...
- Reading Selection is Equiano's Interesting Narrative of the Life of Olaudah Equiano (Must be 4-5 paragraphs)...
- Handler Corp. has a zero coupon bond that matures in five years with a face value...
ADVERTISEMENT