Question
In: Accounting
management is considering the purchase of a machine that would cost $360,000, would last for 7...
management is considering the purchase of a machine that would cost $360,000, would last for 7 years, and would have no salvage value. The machine would reduce labor and other costs by $78,000 per year. The company requires a minimum pretax return of 11% on all investment projects. The net present value of the proposed project is what?
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Clairmont Corporation is considering the purchase of a machine that would cost $140,000 and would last...
Clairmont Corporation is considering the purchase of a machine that
would cost $140,000 and would last for 5 years. At the end of 5
years, the machine would have a salvage value of $18,000. By
reducing labor and other operating costs, the machine would provide
annual cost savings of $30,000. The company requires a minimum
pretax return of 7% on all investment projects. (Ignore income
taxes in this problem.)
Parrish, Inc. is considering the purchase of a machine that would cost $240,000 and would last...
Parrish, Inc. is considering the purchase of a machine that
would cost $240,000 and would last for 5 years, at the end of
which, the machine would have a salvage value of $48,000. The
machine would reduce labor and other costs by $62,000 per year.
Additional working capital of $7,000 would be needed immediately,
all of which would be recovered at the end of 5 years. The
company’s discount rate is 17%
Compute the net present value of the proposed...
Almendarez Corporation is considering the purchase of a machine that would cost $170,000 and would last...
Almendarez Corporation is considering the purchase of a machine
that would cost $170,000 and would last for 5 years. At the end of
5 years, the machine would have a salvage value of $19,000. By
reducing labor and other operating costs, the machine would provide
annual cost savings of $41,000. The company requires a minimum
pretax return of 11% on all investment projects. (Ignore income
taxes.)
Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine
the appropriate discount...
Joanette, Inc., is considering the purchase of a machine that would cost $600,000 and would last...
Joanette, Inc., is considering the purchase of a machine that
would cost $600,000 and would last for 6 years, at the end of
which, the machine would have a salvage value of $50,000. The
machine would reduce labor and other costs by $110,000 per year.
Additional working capital of $4,000 would be needed immediately,
all of which would be recovered at the end of 6 years. The company
requires a minimum pretax return of 10% on all investment projects.
(Ignore...
Quinn Industries is considering the purchase of a machine that would cost $400,000 and would last...
Quinn Industries is considering the purchase of a machine that
would cost $400,000 and would last for 8 years. At the end of 8
years, the machine would have a salvage value of $95,000. The
machine would reduce labor and other costs by $82,000 per year. The
company requires a minimum pretax return of 11% on all investment
projects. (Ignore income taxes.) Required: Provide your Excel input
and the final net present value amount you calculated. Input the
required variables...
Janes, Inc. is considering the purchase of a machine that would cost $620,000 and would last...
Janes, Inc. is considering the purchase of a machine
that would cost $620,000 and would last for 10 years, at the end of
which, the machine would have a salvage value of $62,000. The
machine would reduce labor and other costs by $122,000 per year.
Additional working capital of $8,000 would be needed immediately,
all of which would be recovered at the end of 10 years. The company
requires a minimum pretax return of 16% on all investment projects.
(Ignore...
Quinn Industries is considering the purchase of a machine that would cost $380,000 and would last...
Quinn Industries is considering the purchase of a machine that
would cost $380,000 and would last for 9 years. At the end of 9
years, the machine would have a salvage value of $95,500. The
machine would reduce labor and other costs by $76,000 per year. The
company requires a minimum pretax return of 14% on all investment
projects. (Ignore income taxes.) Required: Provide your Excel input
and the final net present value amount you calculated. Required:
Input the required...
Quinn Industries is considering the purchase of a machine that would cost $380,000 and would last...
Quinn Industries is considering the purchase of a machine that
would cost $380,000 and would last for 9 years. At the end of 9
years, the machine would have a salvage value of $93,000. The
machine would reduce labor and other costs by $73,000 per year. The
company requires a minimum pretax return of 16% on all investment
projects. (Ignore income taxes.)
Required:
Provide your Excel input and the final net present value amount
you calculated. (If a variable is...
The management of Penfold Corporation is considering the purchase of a machine that would cost $300,000,...
The management of Penfold Corporation is considering the
purchase of a machine that would cost $300,000, would last for 5
years, and would have no salvage value. The machine would reduce
labor and other costs by $70,000 per year. The company requires a
minimum pretax return of 12% on all investment projects.
Click here to view Exhibit 13B-1 and Exhibit 13B-2 to determine
the appropriate discount factor(s) using the tables provided.
The net present value of the proposed project is...
The management of Urbine Corporation is considering the purchase of a machine that would cost $320,000...
The management of Urbine Corporation is considering
the purchase of a machine that would cost $320,000 would last for 5
years, and would have no salvage value. The machine would reduce
labor and other costs by $75 ,000 per year. The company requires a
minimum pretax return of 12% on all investment projects. (Ignore
income taxes in this problem.) The net present value of the
proposed project is closest to:
— $72 305
–$9,625
–$26,945
–$49,626
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