rulovia Manufacturing is looking to purchase a machine that will increase its efficiency in their manufacturing process. Trulovie wants to un valuate the following four scenarios based on possible purchase prices and interest rates for a 10-year loan. What is the monthly paymem Scenario Equipment Cost Loan Tern 1 2 3 $ 145,000 $ 147,500 $ 150,000 $ 155,000 Multiple Choice $116174 9 years 10 years 11 years 9 years Interest Rate 7% 58 28

rulovia Manufacturing is looking to purchase a machine that will increase its efficiency in their manufacturing process. Trulovie wants to un valuate the following four scenarios based on possible purchase prices and interest rates for a 10-year loan. What is the monthly paymem Scenario Equipment Cost Loan Tern 1 2 3 $ 145,000 $ 147,500 $ 150,000 $ 155,000 Multiple Choice $116174 9 years 10 years 11 years 9 years Interest Rate 7% 58 28

Name: Trulovia Manufacturing is looking to purchase a machine that will inc
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Description: Trulovia Manufacturing is looking to purchase a machine that will increase its efficiency in their manufacturing process. Trulovie wants to use Scenario Manager toevaluate the following four scenarios based on possible purchase prices and interest r

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 8EB: Shonda & Shonda is a company that does land surveys and engineering consulting. They have an...

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Shonda & Shonda is a company that does land surveys and engineering consulting. They have an opportunity to purchase new computer equipment that will allow them to render their drawings and surveys much more quickly. The new equipment will cost them an additional $1.200 per month, but they will be able to increase their sales by 10% per year. Their current annual cost and break-even figures are as follows: A. What will be the impact on the break-even point if Shonda & Shonda purchases the new computer? B. What will be the impact on net operating income if Shonda & Shonda purchases the new computer? C. What would be your recommendation to Shonda & Shonda regarding this purchase?
Gina Ripley, president of Dearing Company, is considering the purchase of a computer-aided manufacturing system. The annual net cash benefits and savings associated with the system are described as follows: The system will cost 9,000,000 and last 10 years. The companys cost of capital is 12 percent. Required: 1. Calculate the payback period for the system. Assume that the company has a policy of only accepting projects with a payback of five years or less. Would the system be acquired? 2. Calculate the NPV and IRR for the project. Should the system be purchasedeven if it does not meet the payback criterion? 3. The project manager reviewed the projected cash flows and pointed out that two items had been missed. First, the system would have a salvage value, net of any tax effects, of 1,000,000 at the end of 10 years. Second, the increased quality and delivery performance would allow the company to increase its market share by 20 percent. This would produce an additional annual net benefit of 300,000. Recalculate the payback period, NPV, and IRR given this new information. (For the IRR computation, initially ignore salvage value.) Does the decision change? Suppose that the salvage value is only half what is projected. Does this make a difference in the outcome? Does salvage value have any real bearing on the companys decision?
conomics Please help me with this engineering economy question. thank you A. A student takes out $10,000 in loans. If she repays the loan over a 10 year period, calculate the annual payment. Assume 6% interest. B. Sam wants to borrow $20,000 for a car. The payment terms are calculated at 12% interest, compounded monthly, for 5 years. Calculate the monthly payment, choose the closest answer. C. A purchase of a new machine is being evaluated. If we assume 12% annual interest, what is the Equivalent Uniform Annual Cost? Choose the nearest answer. Initial Cost $30,000 Annual Maintenance $1,500 Salvage Value $5,000 Life 6 years D. A maintenance contract is $5,000 per year for 10 years. Assuming 9% annual interest, calculate the present value of this contract. Choose the closest answer.
You have just been offered a contract worth $ 1.15 million per year for 7 years. However, to take the contract, you will need to purchase some new equipment. Your discount rate for this project is 12.4%. You are still negotiating the purchase price of the equipment. What is the most you can pay for the equipment and still have a positive NPV? Question content area bottom Part 1 The most you can pay for the equipment and achieve the 12.4% annual return is $ enter your response here million. Round to two decimal places.)
Dunder Mitfin plans to install a computer system to measure the dimensions of products so thar the proper size boxes can be used to ship items. This well save packing materials, cardboard, and labor. If the savings will be $132310 the first year and increases by $ 9521each year for 9 years. What is the present worth of the system at an interest rate of 12%.Write your answer to two decimal places
Q. 3. You have an opportunity to install solar panels on your home. The upfront cost of installing the system is $30,000 and the system is expected to save you $140 per month in electricity costs. The expected lifetime of the system is 25 years. a) Write down the formula for the internal rate of return on this project. b) Use Excel to graph the internal rate of return at different discount rates, ranging from 0% to 10%. Attach your graph. c) Over the last 20 years the rate of return on the U.S. stock market has been an average of 7% (using the annual rate of growth in the Wilshire 5000 index). Given that you could invest your $30,000 in the stock market, does the investment in solar panels make sense from an economic perspective? Why or why not? d) How high would the monthly electricity savings need to be to justify this investment if the internal rate of return needed to be at least 7%.
Acme Products, Inc. is interested in producing and selling an improved widget. Market research indicates that customers would be willing to pay $90 for such a widget and that 50,000 units could be sold each year at this price. If Acme Products requires a 75% return on sales to undertake production, what is the target cost for the new widget? Select one: O a. $31.50. O b. $67.50. OC. $58.50. Od. $22.50.
Using NPV analysis would the which would be more profitable "As a almond producer you are faced with a choice leasing or purchasing equipment, would it be more profitable to purchase a almond sweeper for $90,000, or leasing the equipment out Over 20 years If the lease payment was $3,000 yearly.
2. A potential software project will cost $17000 now, $2000 one year from now, $1000 2 years from now, and $1000 3 years from now. It will provide benefits of $28000 after it is installed 1 year from now, $30000 2 years from now, and $35000 3 years from now. Calculate the Present Value of the costs and benefits for each year and the overall Net Present Value of the project. Use a discount rate of 3%. (Hint: set up a spreadsheet...) Year 0 SO ? Benefits PV of Benefits Costs PV of Costs ? $17,000 Year 1 $28,000 ? Show Transcribed Text $2,000 ? Year 2 $30,000 ? $1,000 ? Year 3 $35,000 ? $1,000 ? Net Present Value (NPV) = Total PV of Benefits - Total PV of Costs Total Benefits Total Costs 3. The Payback Period is the length of time required to recover the cost of an investment. Management uses Payback Period to assess the risk of an investment - the longer the Payback Period, the higher the investment risk. What is the Payback Period for the project in question #2 above? 4. What is the ROI…
Max is planning to buy an equipment. Model X cost $300 to purchases and result is a costing savings of $150 per year, and last for 5 years. Model Z cost $450, result in costs savings of $130 per year, and last for 10 years. The discount rate is 20%. Required: a. Calculate the appropriate NPV for both the models. b. Calculate the approximate IRR for both the models. c. Calculate the Payback period for both the models. d. Which model should Max buy. e. If the inflation rate is expected to be 10%, will your advice to Max change.
Please somebody help me for my assignment lesson in NPV. A project costing $150,000 has following expected benefits: Year 1 $70,000 Year 2 $70,000 Year 3 $ 80,000 Year 4 $60,000 Year 5 $40,000. What is the payback period of the project? And what is the NPV of the project if the discount rate is 10%?
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.