|
CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $425,000 is estimated to result in $159,000 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 $60,000. The press also requires an initial investment in spare parts inventory of $16,500, along with an additional $3,500 in inventory for each succeeding year of the project. The shop’s tax rate is 25 percent and its discount rate is 12 percent. Calculate the project's NPV. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
In: Finance
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $768,000 is estimated to result in $256,000 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 $112,000. The press also requires an initial investment in spare parts inventory of $32,000, along with an additional $4,800 in inventory for each succeeding year of the project. Required : If the shop's tax rate is 31 percent and its discount rate is 8 percent, what is the NPV for this project? (Do not round your intermediate calculations.)
$59,684.25
$61,469.88
$-37,942.58
$62,668.46
$56,700.03
In: Finance
|
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $1,027,200 is estimated to result in $342,400 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 $149,800. The press also requires an initial investment in spare parts inventory of $42,800, along with an additional $6,420 in inventory for each succeeding year of the project. |
|
If the shop's tax rate is 32 percent and its discount rate is 9 percent, what is the NPV for this project? (Do not round your intermediate calculations.) |
$48,830.16
$51,436.80
$-77,215.72
$51,271.67
$46,388.65
In: Finance
Starset Machine Shop is considering a 4-year project to improve its production efficiency. Buying a new machine press for $390,000 is estimated to result in $148,000 in annual pretax cost savings. The press qualifies for 100 percent bonus depreciation, and it will have a salvage value at the end of the project of $48,000. The press also requires an initial investment in spare parts inventory of $21,000, along with an additional $3,150 in inventory for each succeeding year of the project. The shop’s tax rate is 21 percent and its discount rate is 8 percent. Calculate the NPV of this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
In: Finance
Starset Machine Shop is considering a 4-year project to improve its production efficiency. Buying a new machine press for $440,000 is estimated to result in $178,000 in annual pretax cost savings. The press falls in the 5-year MACRS class, and it will have a salvage value at the end of the project of $72,000. The press also requires an initial investment in spare parts inventory of $31,000, along with an additional $3,650 in inventory for each succeeding year of the project. The shop’s tax rate is 21 percent and its discount rate is 12 percent. (MACRS schedule) Calculate the NPV of this project.
|
(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
In: Finance
|
Starset Machine Shop is considering a 4-year project to improve its production efficiency. Buying a new machine press for $445,000 is estimated to result in $181,000 in annual pretax cost savings. The press qualifies for 100 percent bonus depreciation, and it will have a salvage value at the end of the project of $73,000. The press also requires an initial investment in spare parts inventory of $32,000, along with an additional $3,700 in inventory for each succeeding year of the project. The shop’s tax rate is 22 percent and its discount rate is 11 percent. |
|
Calculate the NPV of this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
In: Finance
|
Starset Machine Shop is considering a 4-year project to improve its production efficiency. Buying a new machine press for $430,000 is estimated to result in $172,000 in annual pretax cost savings. The press qualifies for 100 percent bonus depreciation, and it will have a salvage value at the end of the project of $71,000. The press also requires an initial investment in spare parts inventory of $29,000, along with an additional $3,550 in inventory for each succeeding year of the project. The shop’s tax rate is 24 percent and its discount rate is 11 percent. |
|
Calculate the NPV of this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
In: Finance
|
CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $397,000 is estimated to result in $145,000 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 $46,000. The press also requires an initial investment in spare parts inventory of $15,100, along with an additional $2,100 in inventory for each succeeding year of the project. The shop’s tax rate is 21 percent and its discount rate is 8 percent. Calculate the project's NPV. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
In: Finance
CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $429,000 is estimated to result in $161,000 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 $62,000. The press also requires an initial investment in spare parts inventory of $16,700, along with an additional $3,700 in inventory for each succeeding year of the project. The shop’s tax rate is 22 percent and its discount rate is 9 percent. Calculate the project's NPV. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
In: Finance
|
Disraeli Gears Inc. manufactures latke-shaped gears. The company is considering the purchase of a new machine press for $1,142,400. The press has a four-your life and is estimated to result in $380,800 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 $166,600. The press also requires an initial investment of $47,600 in spare parts for inventory. An additional $7,140 in inventory will be required for each succeeding year of the project. All investments in inventory will be recovered at the end of the project. |
| If the shop's tax rate is 32 percent and its discount rate is 10 percent, what is the NPV for this project? (Do not round your intermediate calculations.) |
|
HINT: Calculate the depreciation for each year and use it to get the after tax-salvage value. Next, calculate OCF using the annual depreciation and then construct CFFA for each year. Now discount all cash flows to get the NPV. |
rev: 09_18_2012
In: Accounting