A new bottle-capping machine costs $45 000, including $5000 for installation. The machine is expected to have a useful life of eight years with no salvage value at that time (assume straight-line depreciation). Operating and maintenance costs are expected to be $3000 for the first year, increasing by $1000 each year thereafter. Interest is 12 percent. What is the economic life of the bottle capper?
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A new bottle-capping machine costs $45 000, including $5000 for installation. The machine is expected to have a useful life of eight years with no salvage value at that time (assume straight-line depreciation). Operating and maintenance costs are expected to be $3000 for the first year, increasing by $1000 each year thereafter. Interest is 12 percent.
What is the economic life of the bottle capper?
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- A new bottle-capping machine costs $45 000, including $5000 for installation. The machine is expected to have a useful life of eight years with no salvage value at that time (assume straight-line depreciation). Operating and maintenance costs are expected to be $3000 for the first year, increasing by $1000 each year thereafter. Interest is 12 percent. What is the economic life of the bottle capper? Note: don't use chat gpt3-21. You can buy a machine for $100,000 that will produce a net income, after operating expenses, of $10,000 per year. If you plan to keep the machine for four years, what must the market (resale) value be at the end of four years to justify the investment? You must make a 12% annual return on your investment.The existing asset’s economic life can be found if certain estimates about it can be made. Assuming those estimates prove to be exactly correct, one can accurately predict the year when the existing asset should be replaced, even if nothing is known about potential new assets. True or false? Explain.
- A new bottle-capping machine costs 65,000, including 8,000 for installation. The machine is expected to have a useful life of eight years with no salvage value at that time (assume straight-line depreciation). Operating and maintenace costs are expected to be 3,500 for the first year, increasing by 2,000 each year thereafter. Interest is 10%. Construct a spreadsheet that has the following headings: Year, Salvage Value, Maintenance Costs, EAC (Capital Costs), EAC (Operating Costs), and EAC (Total Costs). Compute the EAC (Total Costs) if the bottle capper is kept for n years, n = 1,...,8. What is the economic life of the bottle capper (in years)? Complete the row of the table indicating the economic life for this project NOTE: Use 5 significant figures in your calculations, and round your answers for the table below to the nearest dollar. Year Salvage Maintenance EAC Capital EAC Maintenance EAC TotalRespond to the question with a concise and accurate answer, along with a clear explanation and step-by-step solution, or risk receiving a downvote. Modifying an assembly line has a first cost of $165,000 and its salvage value is $0. The firm’s interest rate is 10%. The savings shown in the table depend on whether the assembly line runs one, tow, or three shifts and on whether the product is made for 8 or 10 years. Calculate the expected present worth. Round to the nearest cent. Shifts/day Savings P(S) Useful Life P(L) 1 $27,500 25% 8 65% 2 $30,000 40% 10 35% 3 $32,500 35%A printing machine is bought at $1 million and is estimated to have a salvage value of $100,000 after 500,000 copies. The annual cost of renting the space for the business is $100,000, power cost per copy is $1.50, and maintenance and paper cost per copy is $3. The expected annual production of the machine is 100,000 copies. Annual interest is 12%. Determine: a. The annual operation and maintenace cost of the machine b. The annual depreciation of the machine. c. Production cost per copy. Show your solution.
- J&M Manufacturing plans on purchasing a new assembly machine for $30,000 to automate one of its current manufacturing operations. It will cost an additional $5,500 to have the new machine installed. With the new machine, J&M expects to save $11,000 in annual operating and maintenance costs. The machine will last five years with an expected salvage value of $6,000. a. How long will it take to recover the investment (plus installation cost)? The payback period is _______years. (Round up to the nearest whole number.) b. If J&M's interest rate is known to be 13%, determine the discounted payback period. The discounted payback period is _______years. (Round up to the nearest whole number.)J&M Manufacturing plans on purchasing a new assembly machine for $32,000 to automate one of its current manufacturing operations. It will cost an additional $3,500 to have the new machine installed. With the new machine, J&M expects to save $ 12,000 in annual operating and maintenance costs. The machine will last five years with an expected salvage value of $5,000. a. How long will it take to recover the investment (plus installation cost)? b. If J&M's interest rate is known to be 17%, determine the discounted payback period.Barbara Thompson is considering the purchase of a piece of business rental property containing stores and offices at a cost of $350,000. Barbara estimates that annual receipts from rentals will be $55,000 and that annual disbursements. other than income taxes, will be about $18,000. The property is expected to appreciate at the annual rate of 5%. Barbara expects to retain the property for 20 years once it is acquired. Then it will be depreciated on the basis of the 39-year real-property class (MACRS), assuming that the property would be placed in service on January 1. Barbara's marginal tax rate is 30%, and her MARR is 10%. What would be the minimum annual total of rental receipts that would make the investment break even?
- J&M Manufacturing plans on purchasing a new assembly machine for $30,000 to automate one of its current manufacturing operations. It will cost an additional $5,500 to have the new machine installed. With the new machine, J&M expects to save $11,000 in annual operating and maintenance costs. The machine will last fivr years with an expected salvage value of $6,000. a. How long will it take to recover the investment (plus installation cost)? The payback period is ? years. (Round up to the nearest whole number.) b. If J&M's interest rate is known to be 13%, determine the discounted payback period. The discounted payback period is ? years. (Round up to the nearest whole number.) Please give proper explanation of the each sub question given above.will give you thumbs up only for the correct answer. Thank youYour company has been doing well, reaching $1.18 million in earnings, and is considering launching a new product. Designing the new product has already cost $505,000. The company estimates that it will sell 815,000 units per year for $2.91 per unit and variable non-labor costs will be $1.16 per unit. Production will end after year 3. New equipment costing $1.18 million will be required. The equipment will be depreciated to zero using the 7-year MACRS schedule. You plan to sell the equipment for book value at the end of year 3. Your current level of working capital is $301,000. The new product will require the working capital to increase to a level of $384,000 immediately, then to $406,000 in year 1, in year 2 the level will be $360,000, and finally in year 3 the level will return to $301,000. Your tax rate is 21%. The discount rate for this project is 10.2%. Do the capital budgeting analysis for this project and calculate its NPV. Note: Assume that the equipment is put into use in year…1. You have been asked to assess a proposed project to buy a new automated assembly machine that will replace four workers. The machine will cost $315,000 to buy and install. It will also have an estimated maintenance cost of $2000 annually. The machine's expected lifespan will be 14 years and it will have an estimated salvage value of $4500 at the end of those 14 years. The machine will save the cost of four employees, whose individual salary and benefits cost is $41,000 per year. The corporate WACC rate is 5%. What is the NPV and IRR of this cashflow?