Question

In: Finance

A machine has an NPV of $1,500 for one 4 yesr replacemt cycle. The cost of...

A machine has an NPV of $1,500 for one 4 yesr replacemt cycle. The cost of capital for this machine is 12%. what is EAS for the NPV of this machine?

Solutions

Expert Solution

Answer:

PVAF of 12% for 4 years = 3.0373

EAS for the NPV of this machine = 1,500 / 3.0373 = $493.86


Related Solutions

4.A machine cost $200,000 and has a salvage value of $100,000 if kept for one year....
4.A machine cost $200,000 and has a salvage value of $100,000 if kept for one year. The salvage value will decrease by $50,000 in years 2 and 3 and remain zero after year 3. The operating costs are $50,000 the first year and increase by $50,000 per year. So operating costs in year two will be $100,000, and in year three $150,000 and so on. How long should the equipment be kept so that annual cost is minimized if the...
A machine acquired on January 4, 2009, at a cost of $425,000, has an estimated useful...
A machine acquired on January 4, 2009, at a cost of $425,000, has an estimated useful life of nine years and an estimated residual value of $65,000. (10 points) What was the amount of depreciation for the years 2009, 2010, and 2011, using the straight-line method of depreciation? What was the book value of the machine on January 1, 2012?                       Assume that the machine was sold on January 9, 2012, for $290,000 journalize the entry to record the sale                                    ...
A machine acquired on January 4, 2009, at a cost of $425,000, has an estimated useful...
A machine acquired on January 4, 2009, at a cost of $425,000, has an estimated useful life of nine years and an estimated residual value of $65,000. (10 points) What was the amount of depreciation for the years 2009, 2010, and 2011, using the straight-line method of depreciation? What was the book value of the machine on January 1, 2012?                           Assume that the machine was sold on January 9, 2012, for $290,000 journalize the entry to record the sale                                                               ...
A copy machine acquired with a cost of $1,900 has an estimated useful life of 4...
A copy machine acquired with a cost of $1,900 has an estimated useful life of 4 years.  It is also expected to have a useful operating life of 10,000 copies. Assuming that it will have a salvage value of $100, determine the depreciation for the first year and second year by the (15 points) (a) straight-line method (b) double-declining-balance method (c) units-of-output method (4,500 copies were made the first year 3,200 copies second year)
A copy machine acquired with a cost of $1,410 has an estimated useful life of 4...
A copy machine acquired with a cost of $1,410 has an estimated useful life of 4 years. It is also expected to have a useful operating life of 13,350 copies. Assuming that it will have a salvage value of $75, determine the depreciation for the first year and second year by the (15 points) (a) straight-line method (b) double-declining-balance method (c) units-of-output method (4,500 copies were made the first year 3,200 copies second year
.A machine cost $200,000 and has a salvage value of $100,000 if kept for one year....
.A machine cost $200,000 and has a salvage value of $100,000 if kept for one year. The salvage value will decrease by $50,000 in years 2 and 3 and remain zero after year 3. The operating costs are $50,000 the first year and increase by $50,000 per year. So operating costs in year two will be $100,000, and in year three $150,000 and so on. How long should the equipment be kept so that annual cost is minimized if the...
Define the Machine Cycle
Define the Machine Cycle
A company plans to invest in one of the two machines. Machine X has capital cost...
A company plans to invest in one of the two machines. Machine X has capital cost of $115,000 and annual operation & maintenance cost is $6,000. Income is $45,000 per year. Machine Y will have an initial cost of $105,000. The maintenance fee is $5,000 and the revenue is $25,000 for each year. Both projects have 10 years life. The salvage value is $5,000 for X and $6,000 for Y at the end of its lifetime. Using Present Worth Analysis,...
You own a portfolio that has $1,500 in Stock A and $1,500 in Stock B. If...
You own a portfolio that has $1,500 in Stock A and $1,500 in Stock B. If the expected returns on the two stocks are 9% and 11%, respectively, what is the expected return on the portfolio? 9.5% 11.5% 10.75% 20% or 10%
Mags Ltd. has purchased a new machine for a cost of $500,000. The machine has just...
Mags Ltd. has purchased a new machine for a cost of $500,000. The machine has just been installed and the cost of installation is $30,000. The internal auditors have advised that the cost of installation cannot be depreciated. The machine’s suppliers have requested a 20% deposit on installation with the remainder to be paid within six months. The current estimated before-tax net operating cash revenue for the coming four years are $300,000 in the first year, $320,000 in the second...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT