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In: Finance
A generator costs $150 and requires $80 in maintenance for each year of its 3 year...
A generator costs $150 and requires $80 in maintenance for each year of its 3 year life. After 3 years this generator will be replaced by a new one. The generator is straight-line depreciable to zero and has no salvage value. Assume a tax rate of 35 percent and a discount rate of 15 percent. What is the Equivalent Annual Cost (EAC) of the generator?
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jeff jeffy answered 2 years agoRelated Solutions
A generator costs $150 and requires $80 in maintenance for each year of its 3 year...
A generator costs $150 and requires $80 in maintenance for each
year of its 3 year life. After 3 years this generator will be
replaced by a new one. The generator is straight-line depreciable
to zero and has no salvage value. Assume a tax rate of 35 percent
and a discount rate of 15 percent. What is the Operating Cash Flow
(OCF) per year associated with the generator project?
A machine costs $900,000 and requires $50,000 maintenance for each year of its three-year life. the...
A machine costs $900,000 and requires $50,000 maintenance for
each year of its three-year life. the maintenance costs are paid at
the end of each year. after 3 years, the machine will be replaced.
assume a tax rate of 34% and a discount rate of 14%. if the machine
is depreciated over three years using the straight-line method,
with no salvage value, what is the equivalent annual annuity?
Your firm needs a machine which costs $130,000, and requires $28,000 in maintenance for each year...
Your firm needs a machine which costs $130,000, and requires
$28,000 in maintenance for each year of its 3 year life. After 3
years, this machine will be replaced. The machine falls into the
MACRS 3-year class life category. Assume a tax rate of 21% and a
discount rate of 13%. What is the depreciation tax shield for this
project in year 3?
$15,210
$4,043.13
$19,253
$2,502.89
our firm needs a machine which costs $100,000, and requires $25,000 in maintenance for each year...
our firm needs a machine which costs $100,000, and requires
$25,000 in maintenance for each year of its 3 year life. After 3
years, this machine will be replaced. The machine falls into the
MACRS 3-year class life category. Assume a tax rate of 21% and a
discount rate of 14%. If this machine can be sold for $10,000 at
the end of year 3, what is the after tax salvage value?
$5,854
$2,590.00
$7,900.00
$9,456.10
Your firm needs a machine which costs $160,000, and requires $31,000 in maintenance for each year...
Your firm needs a machine which costs $160,000, and requires
$31,000 in maintenance for each year of its 3 year life. After 3
years, this machine will be replaced. The machine falls into the
MACRS 3-year class life category. Assume a tax rate of 21% and a
discount rate of 15%. What is the depreciation tax shield for this
project in year 3?
$23,696
$18,720
$4,976.16
$3,554.40
Your firm needs a machine which costs $220,000, and requires$43,000 in maintenance for each year...
Your firm needs a machine which costs $220,000, and requires
$43,000 in maintenance for each year of its 5 year life. After 5
years, this machine will be replaced. The machine falls into the
MACRS 5-year class life category. Assume a tax rate of 21% and a
discount rate of 15%. What is the depreciation tax shield for this
project in year 5?$20,021.76$25,344$3,801.60$5,322.24
Your firm needs a machine which costs $270,000, and requires $42,000 in maintenance for each year...
Your firm needs a machine which costs $270,000, and requires
$42,000 in maintenance for each year of its 7 year life. After 3
years, this machine will be replaced. The machine falls into the
MACRS 7-year class life category. Assume a tax rate of 40% and a
discount rate of 16%. What is the depreciation tax shield for this
project in year 7?
Your firm needs a machine which costs $140,000, and requires $35,000 in maintenance for each year...
Your firm needs a machine which costs $140,000, and requires
$35,000 in maintenance for each year of its 10 year life. After 5
years, this machine will be replaced. The machine falls into the
MACRS 10-year class life category. Assume a tax rate of 40% and a
discount rate of 13%. What is the depreciation tax shield for this
project in year 10?
Your firm needs a machine which costs $125,000, and requires $5,000 in maintenance for each year...
Your firm needs a machine which costs $125,000, and requires
$5,000 in maintenance for each year of its three-year life. After
three years, this machine will be replaced. The machine falls into
the MACRS three-year class life category. Assume a tax rate of 35
percent and a discount rate of 10 percent. If this machine can be
sold for $15,000 at the end of year 3, what is the after-tax
salvage value?
$11,692.69
$9,750.00
$12,991.88
$9,262.50
A stock costs $80 and pays a $4 dividend each year for three years. a) If...
A stock costs $80 and pays a $4 dividend each year for three
years.
a) If an investor buys the stock for $80 and expects to sell it
for $100 after three years, what is the anticipated annual rate of
return?
b) What would be the rate of return if the purchase price were
$60?
c) What would be the rate of return if the dividend were $1
annually and the purchase price were $80 and the sale price were...
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