Question
In: Finance
You are operating an old machine that is expected to produce a cash flow 0f $5,000...
You are operating an old machine that is expected to produce a cash flow 0f $5,000 in each of the next 3 years before it fails. You can replace it now with a new machine that costs $20,000 but is much ore efficient and will provide a cash flow of $10,000 a year for 4 years.
Calculate the equivalent annual cost of the new machine if the discount rate is 15% (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Should you replace your equipment now?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
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$121,017
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$1,195,000. The net aftertax salvage value of $61,000 will be
received at the end of the project. The project requires 87,000 of
net working capital up front that will be fully recovered. What is
the net present value of the project if the required rate of return
is 12 percent? $146,800.23 $181,219.28 $154,036.37 $172,811.69
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