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In: Finance
An automated machine costs $1,000 and has a 20% probability of breaking irreparably at the end...
An automated machine costs $1,000 and has a 20% probability of breaking irreparably at the end of each year (assuming it was working in the previous year). The machine has a maximum five-year life and will be disposed of with zero value at the end of five years. The machine produces $400 of cashflow at the end of each year and the discount rate is 10% per year. What is the most likely number of years the machine will last and what would the machines value be?
What is the expected number of years the machine will last and what would the value of themachine be? What is the NPV of the machine?
Solutions
jeff jeffy answered 8 months agoRelated Solutions
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Gravely Gears (GG) makes gears using an automated machine costs
$12,000 and has a 25% probability of breaking irreparably at the
end of each year (assuming it was working in the previous year).
The machine has a maximum five-year life and will be disposed of
with zero value at the end of five years. The machine produces
$4,000 of cash flow at the end of each year and the discount rate
is 8% per year. What is the expected number...
Gravely Gears (GG) makes gears using an automated machine costs $12,000 and has a 25% probability...
Gravely Gears (GG) makes gears using an automated machine costs
$12,000 and has a 25% probability of breaking irreparably at the
end of each year (assuming it was working in the previous year).
The machine has a maximum five-year life and will be disposed of
with zero value at the end of five years. The machine produces
$4,000 of cash flow at the end of each year and the discount rate
is 8% per year. What is the expected number...
A machine has no maintenance costs the first 5 years of operation. At the end of...
A machine has no maintenance costs the first 5 years of
operation. At the end of years 6-10, the annual cost is $1000/yr.
For years 11-15, the annual cost is $2000/yr. What is the
equivalent annual cost for all of this maintenance if the interest
rate is 10%?
A new machine costs $42,000 and has a $2000 salvage value at the end of its...
A new machine costs $42,000 and has a $2000 salvage value at the
end of its 8-year useful life. Determine the straight-line (SL),
and the double declining balance (DDB) depreciation schedules for
the machine.
A loan is being repaid with 20 payments of $ 1,000 at the end of each...
A loan is being repaid with 20 payments of $ 1,000 at the end of
each quarter. Given that the nominal rate of interest is 8% per
year compounded quarterly, find the outstanding balance of the loan
immediately after 10 payments have been made (a) by the prospective
method, (b) by the retrospective method.
The breaking strength X of a certain rivet used in a machine engine has a mean...
The breaking strength X of a certain rivet used in a machine
engine has a mean 5000 psi and standard deviation 400 psi. A random
sample of 25 rivets is taken. Consider the distribution of ?̅, the
sample mean breaking strength.
(a) What is the probability that the sample mean falls between
4800 psi and 5200 psi?
(b) What sample n would be necessary in order to have P(4950
< ?̅<5050) = 0.95 (0.99)?
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 A costs $38,000 to purchase and is worth $8,000 in 6 years at the end...
Machine A costs $38,000 to purchase and is worth $8,000 in 6
years at the end of its service life. Machine B costs $17,000 to
purchase and is worth $3,000 in 3 years at the end of its service
life. Assume that these machines are needed for 18 years (required
service period). Each machine can be repurchased at the same price
in the future, and assume the annual maintenance cost of each
machine is negligible. Use 11% annual interest rate....
A machine costs Php 332,631 with a salvage value of Php 44,647 at the end of...
A machine costs Php 332,631 with a salvage value of Php 44,647
at the end of its life of 11 years. If money is worth 5% annually,
use Sinking Fund Method and determine the depreciation at the 2th
year. MANUAL SOLUTION PLEASE
"Machine A costs $39,000 to purchase and is worth $10,000 in 5 years at the end...
"Machine A costs $39,000 to purchase and is worth $10,000 in 5
years at the end of its service life. Machine B costs $13,000 to
purchase and is worth $2,000 in 3 years at the end of its service
life. Assume that these machines are needed for 15 years (required
service period). Each machine can be repurchased at the same price
in the future, and assume the annual maintenance cost of each
machine is negligible. Use 13% annual interest rate....
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