Linkin Corporation is considering purchasing a new delivery truck. The truck has many advantages over the company’s current truck (not the least of which is that it runs). The new truck would cost $54,760. Because of the increased capacity, reduced maintenance costs, and increased fuel economy, the new truck is expected to generate cost savings of $7,400. At the end of 8 years, the company will sell the truck for an estimated $27,000. Traditionally the company has used a rule of thumb that a proposal should not be accepted unless it has a payback period that is less than 50% of the asset’s estimated useful life. Larry Newton, a new manager, has suggested that the company should not rely solely on the payback approach, but should also employ the net present value method when evaluating new projects. The company’s cost of capital is 8%.
Compute the cash payback period and net present value of the proposed investment.

Special Instrument company is considering replacing its machine with a new model that sells for $40,000, the cost of installation is $6,000. The old machine has been fully depreciated and has a $2500 salvage value. The new machine will be depreciated as a 3-year MACRS asset. Revenues are expected to increase $18,000 per year over the 5-year life of the new machine. At the end of 5 years the new machine is expected to have a $1500 salvage value. What is the NPV for this project if Special Instrument has a required rate of return of 12% and a marginal tax rate of 35%? Operating costs are not expected to increase from the current level of $8,000 per year. Briefly Discuss if you accept or reject the new machine and why.

I got the point where I need to calculate the depreication. How do I go about doing that?

A firm has debt with a face value of $100. Its projects will pay a safe $80 tomorrow. Managers care only about shareholders. A new quickie project comes along that costs $20, earns either $10 or $40 with equal probabilities, and does so by tomorrow. Assume that the time value of money is 0

     1. Is this a positive-NPV project?

    2. If the new project can only be financed with a new equity issue, would the shareholders vote for this? Would the creditors?

     3. Assume the existing bond contract was written in a way that allows the new projects to be financed with first collateral (superseniority with respect to the existing creditors). New creditors can collect $20 from what the existing projects will surely pay. Would the existing creditors be better off?

4. What is the better arrangement from a firm-value perspective?

Part 1 AstroTech Semiconductor incurred the following costs in 2018 related to a new product design:

The development costs were incurred after technological and commercial feasibility was established and after the future economic benefits were deemed probable. The project was successfully completed, and the new product was patented before the end of the 2018 fiscal year.

Required:
Calculate the amount of research and development expense AstroTech should report in its 2018 U.S. GAAP income statement related to this project.

Research and development expense is what?

Part 2

Calculate the amount of research and development expense AstroTech should report in its financial statements according to International Financial Reporting Standards (IFRS).
  

What is the research development expense?

El Paso Water Utilities (EPWU) purchases surface water for treatment and distribution to EPWU customers from El Paso County Water Improvement District during the irrigation season. A new contract between the two entities resulted in a reduction in future price increases in the cost of the water from 10% per year to 5% per year for the next 20 years. If the cost of water next year (which is year 1 of the new contract) will be $530 per acre-ft. using an interest rate of 10% per year,

a) Determine the difference between present worth (in $/acre-ft) of the old and the new contracts (solve using both formula and spreadsheet functions).

b) If new contract also needs a future payment of $2,000 at year 20, what is the equivalent annual worth of the new contract? (solve using both table values and spreadsheet functions)

A clinical trial is run to look at the efficacy of a new blood pressure drug. Patients with a diagnosis of hypertension (high blood pressure) are recruited to participate in the trial and randomized to receive either the new drug or placebo. Participants take the assigned drug for 12 weeks and their blood pressure status is recorded. At the end of the trial, participants are classified as still having hypertension or not. The data are shown here:

1.What was the prevalence of hypertension at the start of the trial?

2.What was the prevalence of hypertension at the end of the trial?

3.What was the incidence of recovery over the course of the trial?

4.Compute the relative risk of hypertension, comparing the new drug and the placebo.

5.Based on the results above, what can you conclude about the efficacy of the new drug?

The following table gives the total area in square miles​ (land and​ water) of seven states. Complete parts​ (a) through​ (c).

The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $71,000. The machine would replace an old piece of equipment that costs $18,000 per year to operate. The new machine would cost $8,000 per year to operate. The old machine currently in use is fully depreciated and could be sold now for a salvage value of $26,000. The new machine would have a useful life of 10 years with no salvage value.

Required:

1. What is the annual depreciation expense associated with the new bottling machine?

2. What is the annual incremental net operating income provided by the new bottling machine?

3. What is the amount of the initial investment associated with this project that should be used for calculating the simple rate of return?

4. What is the simple rate of return on the new bottling machine? (Round your answer to 1 decimal place i.e. 0.123 should be considered as 12.3%.)

True or False

1. People with diabetes are at higher risk for certain cancers than those without diabetes suggests a new study based on a telephone survey of nearly 400,000 adults. This is an example of an observational study.

2. In New York City, there are 3250 walk buttons that pedestrians can press at traffic intersections, and 2500 of them do not work. This is an example of a statistic.

3. In New York City, there are 3250 walk buttons that pedestrians can press at traffic intersections, and 2500 of them do not work. This is an example of discrete data.

4. A group of students is divided into two groups. One group is given a new chewable vitamin and the other group is given a placebo. After six months they are asked to fill out a questionnaire and given a health exam to see if the new vitamin has health benefits that are better than a placebo. This is an experimental study.