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In: Finance
Question 1 "A manufacturing company is considering a new investment in a machine that will cost...
Question 1
"A manufacturing company is considering a new investment in a machine that will cost $142,000 and has a maintenance cost of $6,600 that occurs every 2 years starting at the end of year 2. Assuming that this equipment will last infinitely under these conditions, what is the capitalized equivalent cost of this investment at the rate of 13.3%?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
"A manufacturing company is considering a new investment in a machine that will cost $170,000 and...
"A manufacturing company is considering a new investment in a
machine that will cost $170,000 and has a maintenance cost of
$5,700 that occurs every 2 years starting at the end of year 2.
Assuming that this equipment will last infinitely under these
conditions, what is the capitalized equivalent cost of this
investment at the rate of 13.6%? Enter your answer as a positive
number."
Springfield Manufacturing Co. is considering the investment of $60,000 in a new machine. The machine will...
Springfield Manufacturing Co. is considering the investment of
$60,000 in a new machine. The machine will generate cash flow of
$7,500 per year for each year of its 15 year life and will have a
salvage value of $4,000 at the end of its life. Springfield's cost
of capital is 10%. (a.) Calculate the net present value of the
proposed investment. Ignore income taxes, and round all answers to
the nearest $1. (b.) Calculate the present value ratio of the...
Northern Manufacturing Ltd. is considering the investment of $85,000 in a new machine. The machine will...
Northern Manufacturing Ltd. is considering the investment of
$85,000 in a new machine. The machine will generate cash flow of
$14,000 per year for each year of its eight-year life and will have
a salvage value of $9,000 at the end of its life. The company’s
cost of capital is 10%. Table 6-4 and Table 6-5. (Use appropriate
factor(s) from the tables provided. Round the PV factors to 4
decimals.)
Required: Calculate the net present value of the proposed
investment....
Northern Manufacturing Ltd. is considering the investment of $85,000 in a new machine. The machine will...
Northern Manufacturing Ltd. is considering the investment of
$85,000 in a new machine. The machine will generate cash flow of
$14,000 per year for each year of its eight-year life and will have
a salvage value of $9,000 at the end of its life. The company’s
cost of capital is 10%. Table 6-4 and Table 6-5. (Use
appropriate factor(s) from the tables provided. Round the PV
factors to 4 decimals.)
Required:
Calculate the net present value of the proposed investment....
Springfield Manufacturing Co. is considering the investment of $60,000 in a new machine. The machine will...
Springfield Manufacturing Co. is considering the investment of
$60,000 in a new machine. The machine will generate cash flow of
$7,500 per year for each year of its 15 year life and will have a
salvage value of $4,000 at the end of its life. Springfield's cost
of capital is 10%.
(a.) Calculate the net present value of the proposed investment.
Ignore income taxes, and round all answers to the nearest $1.
(b.) Calculate the present value ratio of the...
QUESTION #5: X Company is considering buying a new machine that will cost $150,000 and that...
QUESTION #5:
X Company is considering buying a new machine that will cost
$150,000 and that will generate annual cash inflows of $31,470 for
6 years.
What is the approximate internal rate of return?
Roten Manufacturing Company is considering an investment on a machine for producing auto parts. The machine...
Roten Manufacturing Company is considering an investment on a
machine for producing auto parts. The machine costs $250,000 today,
will have a five-year life and will be depreciated over a five-year
life on a straight-line basis toward a zero salvage value. The
company paid a consulting company $7,000 last year to help them
decide whether there is a sufficient demand for the auto parts. In
addition to the investment on the machine, the company also invests
$15,000 in net working...
A machine tool company is considering a new investment in a punch press machine that will...
A machine tool company is considering a new investment in a
punch press machine that will cost $100,000 and has an annual
maintenance cost of $10,000. There is also an additional
overhauling cost of $20,000 for the equipment once every four
years. Assuming that this equipment will last 12 years under these
conditions, what is the cost of owning and maintaining the punch
press at an interest rate of 10%?
A company is considering the purchase of a new machine. The machine will cost $14,000, will...
A company is considering the purchase of a new machine. The
machine will cost $14,000, will result in an annual savings of
$1750 with a salvage value of $500 at the end of 12 years. For a
MARR of 7%, what is the benefit to cost ratio?
Question options:
0.63
8.25
1.36
1.01
Integrativelong dash—Investment decision Holliday Manufacturing is considering the replacement of an existing machine. The new machine...
Integrativelong dash—Investment decision
Holliday Manufacturing is considering the replacement of an
existing machine. The new machine costs $1.18 million and requires
installation costs of $159,000.The existing machine can be sold
currently for $186,000 before taxes. It is 2 years old, cost
$803,000 new, and has a $385,440 book value and a remaining useful
life of 5 years. It was being depreciated under MACRS using a
5-year recovery period and therefore has the final 4 years of
depreciation remaining. If it...
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