please answer letters only 6. What is the NPV after tax?a. (17,848,921.12)b. (21,629,733.69)The next five questions refer to Auto Assembly machine 2:7. What is the ATCF in year 2?a. (2,505,000.00)8. What is the PV after tax in Year 57b. (5,980,000.00)b. (1,934,319.62)a. (2,108,408.38)9. What is the depreciation charge in year 3?a. 2,970,000b. 1,980,000bluc. (17,694,102.22)c. (757,500.00)c. (1,774,605.15)c. 2,980,000d. (22,124,438.38)d. (4,970,000)d. (1,563,084.98)d. 1,970,000 Two alternative Auto Assembly machines are being considered for the new one ampere D1F semiconduproduction line for ABC company. The Production capacity and productivity of both machines are assumed to beidentical and equally satisfactory.Auto Assembly machine 1 will cost PHP 15,000,000 and is expected to last for 5 years with expected salvagevalue of 1% of equipment cost. Operating costs for Auto Assembly 1 are expected to be 2,000,000 per annum.Auto Assembly machine 2 will cost PHP 10,000,000 and is expected to last for 5 years with expected salvagevalue of 1% of equipment cost. Operating costs for Auto Assembly 2 are expected to be 4,000,000 per annum.ABC company has a before-tax MARR of 12% and is in the 25% tax bracket. Which Auto Assembly machinealternative meets the criterion of least cast financially?Perform a before-tax and an after-tax cash flow analysis based on a straight line depreciation method andNet Present Value comparison to answer the following questions: Do not round intermediate solutions.

Capital budgeting, also known as investment appraisal or expenditure decisions, is a financial…

Answered: 6. What is the NPV after tax? a.…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Lesego Ltd is considering an investment in a new machine for the production of a new product, X. There are two possibilities, Machine A and Machine B. Both product X and the machine would have an expected life of five years.The following information is available:Product X Selling price $50Variable cost 32Increase in fixed overhead (excluding depreciation of the new machine) is $90,000 per year.YearSales units 1 10,0002 15,0003 20,0004 20,0005 5,000 Machine A Machine BInitial cost ($000) 550 480Residual value 50 30The company’s cost of capital is 10%,Required:Evaluate each machine, using the following methods:Accounting rate of return Payback;Net present value. Discuss the importance of capital budgeting in organisations.
A new manutactunng facility will produce two products, each of which requires a dnilling operation during processing Two alternative types of drilling machines (D1 and D2) are being considered for purchase. One of these machines must be selected For the same annual demand, the annual production requirements (machine hours) and the annual operating expenses (per machine) are listed in the table below Which machine should be selected if the MARR is 18% per year? Assumptions The facility will operate 2,250 hours per year Machine availability is 85% for Machine D1 and 80% for Machine D2 The yield of Df is 90%, and the yield of D2 is 80% Annual operating expenses are based on an asşsumed operation of 2,250 hours per year, and workers are paid during any idle time of Machine D1 or Machine D2 Assume repeatability Click the icon to view the allternatives descrption Click the icon to view the interest and annuity table for discrete compounding when i= 18% per year The total oquivalent annual…
Airodyne Wind, Inc., has wind tunnels that can operate vertically or horizontally for evaluating the effects of air flow on a component's PCB response and reliability. The company expects to build a new tunnel that will be outfitted with multiple sensor ports. For the estimates below, calculate the equivalent annual cost of the project. First Cost Replacement Cost, Year 2 AOC per Year Salvage Value Life, Years Interest Rate The equivalent annual cost of the project is $ $-570,000 $-300,000 $-870,000 $270,000 7 13%
Two different machines are under consideration for a reengineering project. Machine X is expected to have an initial cost of $74,000 and an expected life of 7 years. It will have a fixed cost of $10,000 per year and a variable cost of $60 per unit per year. Process Y is expected to have a useful life of 9 years. It will have a fixed cost of $8500 per year and a variable cost of $57 per unit per year. The current process produces 150 units per year. Determine the amount the company can spend on Machine Y so the two machines will break even at an interest rate of 12% per year. You may assume repeatability.
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Two machines are being taken into consideration for the manufacturing of a selected component for which there's a protracted term-demand. Machine A value P50,000.00 and is anticipated to final three years and feature a P10,000 salvage value. Machine B expenses P75,000.00 and is anticipated to final 6 years and feature 0 salvage value. Machine A can produce a component in 18 seconds; Machine B calls for simplest 12 seconds in step with component. The out-of-pocket hourly value of operation is P38.00 for A and P30.00 for B. Monthly Maintenance value are P200.00 for A and P220.00 for B. If interest invested is 15%, decide the range of components in step with yr. at which the machines are similarly economical. If the anticipated range of components in parts per year is extra than this break-even quantity, which gadget might be favored?
You are evaluating two different silicon wafer milling machines. The Techron I costs $300,000, has a 3-year life, and has pretax operating costs of $83,000 per year. The Techron II costs $520,000, has a 5-year life, and has pretax operating costs of $49,000 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $60,000. If your tax rate is 24 percent and your discount rate is 12 percent, compute the EAC for both machines. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
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Give typing answer with explanation and conclusion A new production system for a factory is to be purchased and installed for $154982. This system will save approximately 300,000 kWh of electric power each year for a 6-year period. Assume the cost of electricity is $0.10 per kWh, and factory MARR is 15% per year, and the salvage value of the system will be $9668 at year 6. Using the PW method to analyzes if this investment is economically justified A- calculate the PW of the above investment and insert the result below.
A printed circuit board manufacturer will construct a new plant. The potential sites have the following estimates of income and cost. A plant on Site A would cost $30.2 million (mil) to build, produce $31.6 mil/year in revenues, $22.7 mil/year in expenses, and last 18 years. At Site B construction will cost $34.5mil with $35.2mil of revenues per year, $25.2 mil/year in expenses and will also last 18 years. Use the internal rate of return to determine which site should be selected. TheMARRis 25% per year.
You are evaluating two different silicon wafer milling machines. The Techron I costs $300,000, has a three-year life, and has pretax operating costs of $83,000 per year. The Techron Il costs $520,000, has a five-year life, and has pretax operating costs of $49,000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $60,000. If you tax rate is 24 percent and your discount rate is 12 percent, compute the EAC for both machines. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Techron I Techron II

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