Question
In: Finance
Cambridge Analytics is considering a four-year project to improve its production efficiency. Buying a new machine...
Cambridge Analytics is considering a four-year project to improve its production efficiency. Buying a new machine press for $600,000 is estimated to result in $210,000 pretax cost savings annually. The press will be depreciated equally to zero per year and can be sold for $80,000 at the end of its life. The press also requires an initial investment in inventory of $20,000, and the level of inventory increases by $3,000 every year. Tax rate is 17% and the discount rate is 9%. Should the company undertake the project?
(do it with steps, with formula)
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Cambridge Analytics is considering a four-year project to improve its production efficiency. Buying a new machine...
Cambridge Analytics is considering a four-year project to
improve its production efficiency. Buying a new machine press for
$600,000 is estimated to result in $210,000 pretax cost savings
annually. The press will be depreciated equally to zero per year
and can be sold for $80,000 at the end of its life. The press also
requires an initial investment in inventory of $20,000, and the
level of inventory increases by $3,000 every year. Tax rate is 17%
and the discount rate...
CMS Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
CMS Machine Shop is considering a four-year project to improve
its production efficiency. Buying a new machine press for $545,000
is estimated to result in $97,000 in annual pretax cost savings.
The press falls in the MACRS five-year class, and it will have a
salvage value of $70,000. The press also requires an initial
working capital of $21,000, along with an additional $3,000 in
working capital for each succeeding years of project. The tax rate
is 34%, and the company's...
Geller Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Geller Machine Shop is considering a four-year project to
improve its production efficiency. Buying a new machine press for
$390,000 is estimated to result in $150,000 in annual pretax cost
savings. The press falls in the MACRS five-year class, and it will
have a salvage value at the end of the project of $66,000. The
press also requires an initial investment in spare parts inventory
of $12,000, along with an additional $1,700 in inventory for each
succeeding year of the...
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Geary Machine Shop is considering a four-year project to improve
its production efficiency. Buying a new machine press for
$1,132,800 is estimated to result in $377,600 in annual pretax cost
savings. The press falls in the MACRS five-year class (MACRS
Table), and it will have a salvage value at the end of the project
of $165,200. The press also requires an initial investment in spare
parts inventory of $47,200, along with an additional $7,080 in
inventory for each succeeding year...
Geller Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Geller Machine Shop is considering a four-year project to
improve its production efficiency. Buying a new machine press for
$480,000 is estimated to result in $195,000 in annual pretax cost
savings. The press falls in the MACRS five-year class, and it will
have a salvage value at the end of the project of $81,000. The
press also requires an initial investment in spare parts inventory
of $21,000, along with an additional $2,600 in inventory for each
succeeding year of the...
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Geary Machine Shop is considering a four-year project to improve
its production efficiency. Buying a new machine press for $950,400
is estimated to result in $316,800 in annual pretax cost savings.
The press falls in the MACRS five-year class (MACRS Table), and it
will have a salvage value at the end of the project of $138,600.
The press also requires an initial investment in spare parts
inventory of $39,600, along with an additional $5,940 in inventory
for each succeeding year...
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Geary Machine Shop is considering a four-year project to improve
its production efficiency. Buying a new machine press for $566,400
is estimated to result in $188,800 in annual pretax cost savings.
The press falls in the MACRS five-year class (MACRS Table), and it
will have a salvage value at the end of the project of $82,600. The
press also requires an initial investment in spare parts inventory
of $23,600, along with an additional $3,540 in inventory for each
succeeding year...
CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
CSM Machine Shop is considering a four-year project to improve
its production efficiency. Buying a new machine press for $423,000
is estimated to result in $158,000 in annual pretax cost savings.
The press falls in the MACRS five-year class (MACRS Table) and it
will have a salvage value at the end of the project of $59,000. The
press also requires an initial investment in spare parts inventory
of $16,400, along with an additional $3,400 in inventory for each
succeeding year...
CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
CSM Machine Shop is considering a four-year project to improve
its production efficiency. Buying a new machine press for $415,000
is estimated to result in $154,000 in annual pretax cost savings.
The press falls in the MACRS five-year class (MACRS Table) and it
will have a salvage value at the end of the project of $55,000. The
press also requires an initial investment in spare parts inventory
of $16,000, along with an additional $3,000 in inventory for each
succeeding year...
Warmack Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Warmack Machine Shop is considering a four-year project to
improve its production efficiency. Buying a new machine press for
$510,000 is estimated to result in $210,000 in annual pretax cost
savings. The press falls in the MACRS five-year class, and it will
have a salvage value at the end of the project of $86,000. The
press also requires an initial investment in spare parts inventory
of $24,000, along with an additional $2,900 in inventory for each
succeeding year of the...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Consider the following linear programming problem: Maximize 10X + 8Y Subject to: 40X + 24Y <=...
- Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies...
- Think about a company you have worked for, either currently or in the past. Reflect upon...
- 1) X Bank has $1 million in new funds that must be allocated to mortgage (home)...
- Needs to be done in PYTHON A. Create a Dollar currency class with two integer attributes...
- Cash Budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget...
- Consider the case of Falcon Freight Inc. (FF): Five years of realized returns for FF are...
ADVERTISEMENT