Question

In: Economics

Five years? ago, a company in New Jersey installed a? diesel-electric unit costing ?$55,000 at a...

Five years? ago, a company in New Jersey installed a? diesel-electric unit costing ?$55,000 at a remote site because no dependable electric power was available from a public utility. The company has computed depreciation by the?straight-line method with a useful life of 10 years and a zero salvage value. Annual operation and maintenance expenses are $15,000?, and property taxes and insurance cost another ?$3,300 per year. Dependable electric service is now available at an estimated annual cost of ?$32,000. The company in New Jersey wishes to know whether it would be more economical to dispose of the? diesel-electric unit? now, when it can be sold for $37,000?,or to wait five years when the unit would have to be replaced anyway? (with no? MV). The company has an effective income tax rate of 45?% and tries to limit its capital expenditures to opportunities that will earn at least 18?%per year after income taxes. What would you? recommend?

Please use solution here: http://www.chegg.com/homework-help/much-interest-payable-year-loan-2-000-interest-rate-10-per-y-chapter-9-problem-24P-solution-9780133750218-exc

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

Five years ago, a company was considering the purchase of 77 new diesel trucks that were...
Five years ago, a company was considering the purchase of 77 new diesel trucks that were 15.45% more fuel-efficient than the ones the firm is now using. The company uses an average of 10 million gallons of diesel fuel per year at a price of $1.25 per gallon. If the company manages to save on fuel costs, it will save $1.875 million per year (1.5 million gallons at $1.25 per gallon). On this basis, fuel efficiency would save more money...
Five years ago, a company was considering the purchase of 72 new diesel trucks that were...
Five years ago, a company was considering the purchase of 72 new diesel trucks that were 14.56% more fuel-efficient than the ones the firm is now using. The company uses an average of 10 million gallons of diesel fuel per year at a price of $1.25 per gallon. If the company manages to save on fuel costs, it will save $1.875 million per year (1.5 million gallons at $1.25 per gallon). On this basis, fuel efficiency would save more money...
Five years ago, a company was considering the purchase of 72 new diesel trucks that were...
Five years ago, a company was considering the purchase of 72 new diesel trucks that were 14.56% more fuel-efficient than the ones the firm is now using. The company uses an average of 10 million gallons of diesel fuel per year at a price of $1.25 per gallon. If the company manages to save on fuel costs, it will save $1.875 million per year (1.5 million gallons at $1.25 per gallon). On this basis, fuel efficiency would save more money...
Five years ago, a company was considering the purchase of 68 new diesel trucks that were...
Five years ago, a company was considering the purchase of 68 new diesel trucks that were 14.63% more fuel-efficient than the ones the firm is now using. The company uses an average of 10 million gallons of diesel fuel per year at a price of $1.25 per gallon. If the company manages to save on fuel costs, it will save $1.875 million per year (1.5 million gallons at $1.25 per gallon). On this basis, fuel efficiency would save more money...
Five years ago, a company was considering the purchase of 65 new diesel trucks that were...
Five years ago, a company was considering the purchase of 65 new diesel trucks that were 14.78% more fuel-efficient than the ones the firm is now using. The company uses an average of 10 million gallons of diesel fuel per year at a price of $1.25 per gallon. If the company manages to save on fuel costs, it will save $1.875 million per year (1.5 million gallons at $1.25 per gallon). On this basis, fuel efficiency would save more money...
Five years ago, a company was considering the purchase of 74 new diesel trucks that were...
Five years ago, a company was considering the purchase of 74 new diesel trucks that were 15.13% more fuel-efficient than the ones the firm is now using. The company uses an average of 10 million gallons of diesel fuel per year at a price of $1.25 per gallon. If the company manages to save on fuel costs, it will save $1.875 million per year (1.5 million gallons at $1.25 per gallon). On this basis, fuel efficiency would save more money...
Five years ago, a company was considering the purchase of 77 new diesel trucks that were...
Five years ago, a company was considering the purchase of 77 new diesel trucks that were 15.45% more fuel-efficient than the ones the firm is now using. The company uses an average of 10 million gallons of diesel fuel per year at a price of $1.25 per gallon. If the company manages to save on fuel costs, it will save $1.875 million per year (1.5 million gallons at $1.25 per gallon). On this basis, fuel efficiency would save more money...
Five years ago, a company was considering the purchase of 65 new diesel trucks that were...
Five years ago, a company was considering the purchase of 65 new diesel trucks that were 14.73% more fuel-efficient than the ones the firm is now using. The company uses an average of 10 million gallons of diesel fuel per year at a price of $1.25 per gallon. If the company manages to save on fuel costs, it will save $1.875 million per year (1.5 million gallons at $1.25 per gallon). On this basis, fuel efficiency would save more money...
Five years ago, a company was considering the purchase of 62 new diesel trucks that were...
Five years ago, a company was considering the purchase of 62 new diesel trucks that were 15.23% more fuel-efficient than the ones the firm is now using. The company uses an average of 10 million gallons of diesel fuel per year at a price of $1.25 per gallon. If the company manages to save on fuel costs, it will save $1.875 million per year (1.5 million gallons at $1.25 per gallon). On this basis, fuel efficiency would save more money...
Five years ago, a company was considering the purchase of 74 new diesel trucks that were...
Five years ago, a company was considering the purchase of 74 new diesel trucks that were 15.13% more fuel-efficient than the ones the firm is now using. The company uses an average of 10 million gallons of diesel fuel per year at a price of $1.25 per gallon. If the company manages to save on fuel costs, it will save $1.875 million per year (1.5 million gallons at $1.25 per gallon). On this basis, fuel efficiency would save more money...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT