Question

In: Finance

Machine X has an upfront cost of $387,000 and annual operating costs of $11,700 over its...

Machine X has an upfront cost of $387,000 and annual operating costs of $11,700 over its 4-year life. Machine Y costs $360,000 upfront and has annual operating costs of $5,820 over its 3-year life. Whichever machine is purchased will continue to be replaced at the end of its useful life. If the required return is 15.00% for both machine, what is the absolute value of the dollar difference between the EACs of the two machines?

Solutions

Expert Solution

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

Machine X has an upfront cost of $364,500 and annual operating costs of $11,025 over its...
Machine X has an upfront cost of $364,500 and annual operating costs of $11,025 over its 4-year life. Machine Y costs $345,000 upfront and has annual operating costs of $5,580 over its 3-year life. Whichever machine is purchased will continue to be replaced at the end of its useful life. If the required return is 14.25% for both machine, what is the absolute value of the dollar difference between the EACs of the two machines? Question 11 options: $16,237 $16,688...
Machine X has an upfront cost of $469,500 and annual operating costs of $14,175 over its...
Machine X has an upfront cost of $469,500 and annual operating costs of $14,175 over its 4-year life. Machine Y costs $415,000 upfront and has annual operating costs of $6,700 over its 3-year life. Whichever machine is purchased will continue to be replaced at the end of its useful life. If the required return is 17.75% for both machine, what is the absolute value of the dollar difference between the EACs of the two machines?
Machine X has an upfront cost of $379,500 and annual operating costs of $11,475 over its...
Machine X has an upfront cost of $379,500 and annual operating costs of $11,475 over its 4-year life. Machine Y costs $355,000 upfront and has annual operating costs of $5,740 over its 3-year life. Whichever machine is purchased will continue to be replaced at the end of its useful life. If the required return is 14.75% for both machine, what is the absolute value of the dollar difference between the EACs of the two machines?
Machine X costs $248,751 and has annual operating and maintenance costs of $9,980. Machine Y costs...
Machine X costs $248,751 and has annual operating and maintenance costs of $9,980. Machine Y costs $264,500 and has annual operating and maintenance cost of $5,120. Both machines are Class 39, which specifies a CCA rate of 25%. The company needs the machines for 11 years, and at the end of year 11 machine X can be sold for $12,257 and machine Y can be sold for 13,033. The Company's MARR is 10%, and its marginal tax rate is 35%....
Machine X has a first cost of $70,000 and an operating cost of$21,000 in year...
Machine X has a first cost of $70,000 and an operating cost of $21,000 in year 1, increasing by $500 per year through year 5 with a salvage value of $13,000. Machine Y has a first cost of $62,000 and an operating cost of $21,000 in year 1, increasing by 3% per year through year 10 with a salvage value of $2000. If the interest rate is i =10% per year, evaluate which machine must you choose on the basis...
Machine X has a first cost of $70,000 and an operating cost of $21,000 in year...
Machine X has a first cost of $70,000 and an operating cost of $21,000 in year 1, increasing by $500 per year through year 5 with a salvage value of $13,000. Machine Y has a first cost of $62,000 and an operating cost of $21,000 in year 1, increasing by 3% per year through year 10 with a salvage value of $2000. If the interest rate is i =18% per year, evaluate which machine must you choose on the basis...
Machine X has a first cost of $70,000 and an operating cost of $21,000 in year...
Machine X has a first cost of $70,000 and an operating cost of $21,000 in year 1, increasing by $500 per year through year 5 with a salvage value of $13,000. Machine Y has a first cost of $62,000 and an operating cost of $21,000 in year 1, increasing by 3% per year through year 10 with a salvage value of $2000. If the interest rate is i 13% per year, evaluate which machine must you choose on the basis...
A new machine that costs $80,800 is expected to save annual cash operating costs of $20,000...
A new machine that costs $80,800 is expected to save annual cash operating costs of $20,000 over each of the next seven years. The machine's internal rate of return is (see choices below the present value tables): Present Value of $1 Periods 4% 6% 8% 10% 12% 14% 16% 1 .962 .943 .926 .909 .893 .877 .862 2 .925 .890 .857 .826 .797 .769 .743 3 .889 .840 .794 .751 .712 .675 .641 4 .855 .792 .735 .683 .636 .592...
"A special-purpose machine is to be purchased at a cost of $18,000. The expected annual operating...
"A special-purpose machine is to be purchased at a cost of $18,000. The expected annual operating and maintenance cost and the salvage (or market) values for each year of the machine's service are as follows. Year of service 1; O&M costs $2200; Market value $14,400 Years of service 2; O&M costs $3300; Market value $11,100 Years of service 3; O&M costs $4000; Market value $5,700 Years of service 4; O&M costs $5500; Market value $3,000 Years of service 5; O&M...
An asset with a first cost of $21,500 has an annual operating cost of $11,800 and...
An asset with a first cost of $21,500 has an annual operating cost of $11,800 and a $4200 salvage value after its 6-year life. If the project will be needed for 10 years, what would the salvage value of the 4-year-old asset have to be for the annual worth to be the same as it is for one life cycle of the asset? Use an interest rate of 11% per year. Draw the cash flow diagram. Always use factor notation.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT