A research laboratoty purchased a water jet cutter in which their total manufacturing cost is expected to decrease due to an increased productivity as shown on the table below. a) Draw the Cash Flow Diagram b) Determine the equivalent annual cost at an interest rate of 8% per year
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A research laboratoty purchased a water jet cutter in which their total
a) Draw the Cash Flow Diagram
b) Determine the equivalent annual cost at an interest rate of 8% per year
Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
Cost, ₱ 1, 000 |
200 | 195 | 190 | 185 | 180 | 175 | 170 | 165 |
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- Your company is planning to purchase a new log splitter for is lawn and garden business. The new splitter has an initial investment of $180,000. It is expected to generate $25,000 of annual cash flows, provide incremental cash revenues of $150,000, and incur incremental cash expenses of $100,000 annually. What is the payback period and accounting rate of return (ARR)?REQUIRED Study the information given below and calculate the following: Payback period (in years, months and days) Net Present Value Internal Rate of Return (expressed to two decimal places). (Note: Your answer must include the interpolation.) information Eva Limited is considering the purchase of a machine. The company desires a minimum required rate of return of 12%. The machine will cost R2 200 000 plus installation costs of R200 000 and is expected to have a useful life of six years. It is anticipated that the machine will have a salvage value of R100 000. The machine is expected to increase revenues by R800 000 per year but will require the employment of two new machine operators at R100 000 per year for each operator, and it will also require maintenance and repairs averaging R50 000 per year. Depreciation is estimated to be R400 000 per year.FabLab Mindanao purchased a water jet cutter in which their total manufacturing cost is expected to decrease due to an increased productivity as shown on the table (image attached) a) Draw the Cash Flow Diagram b) Determine the equivalent annual cost at an interest rate of 8% per year
- JoJo purchased a water jet cutter in which their total manufacturing cost is expected to decrease due to an increased productivity as shown on the table below. Year 1 2 3 4 6. 7 8 Cost: $1,000 200 195 190 185 180 175 170 165 a) Draw the Cash Flow Diagram b) Determine the equivalent annual cost at an interest rate of 8% per yearFabLab Mindanao purchased a water jet cutter in which their total manufacturing cost is expected to decrease due to an increased productivity as shown on the table below. a) Draw the Cash Flow Diagram b) Determine the equivalent annual cost at an interest rate of 8% per yearAn operation manager expects that the new machine will generate the following streams of income: Year 1- Ᵽ 13, 240.25; Year 2 - Ᵽ 15, 780; Year 3 - Ᵽ18, 990.95; Year 4 - Ᵽ21, 500.50; Year 5 - Ᵽ25,000.00. What is the present value of these future payments if the assumed interest rate is 3.7% ? If a new technology can reduce the future cost of production in 6 years at the following rate: Ᵽ8,550, Ᵽ10,200, Ᵽ13,600, Ᵽ 15,000, Ᵽ12,500, Ᵽ9000 what is present value of the future cost of production assuming that the interest is 6.33%? If the cost of the new technology in Item No. 2 is Ᵽ 52,435.60, what is the net present value? Should you buy or not the new technology?
- A company that manufactures magnetic flow meters expects to undertake a project that will have the cash flows below. At an interest rate of 10% per year, what is the equivalent annual cost of the project? Find the AW value using (a) tabulated factors, (b) calculator functions, and (c) a spreadsheet. Which method did you find the easiest to use?Blossom Industries management is planning to replace some existing machinery in its plant. The cost of the new equipment and the resulting cash flows are shown in the accompanying table. The firm uses an 18 percent discount rate for projects like this. Should management go ahead with the project? Year Cash Flow 0 -$2,970,000 1 787,610 2 869,600 3 1,030,500 4 1,125,360 5 1,354,000 What is the NPV of this project? (Enter negative amounts using negative sign e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525.) The NPV is $enter The NPV in dollars rounded to 0 decimal places Should management go ahead with the project? The firm should select an option rejectaccept the project.The production department is proposing the purchase of an automatic insertion machine. It has identified 3 machines, each with an estimated life of 10 years. Which machine offers the best internal rate of return? Annual net cash flows Average investment Machine A only Machine B only Machine C only O Machines A and B Machine A $ 50,000 250,000 Machine B $ 40,000 300,000 Machine $ 75,000 500,000
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