A company with a MARR of 10% must install one of two production machines. The economic parameters of each machine are asfollows:MachineInitial cost (5)Service life (years)Salvage value endof life (S)$15,0004 years$22,0006 years52,000$1,000The Future worth (FW) for the machine Y over the 12 years analysis period is:

Project Y MARR = 10℅ Initial cost = $22,000 Salvage value = $1,000 Service Life = 6 Years Time…

A company with a MARR of 10% must install one of two production machines. The economic parameters of each machine are as follows: Machine Inital cost (5) Service e yean) $15,000 4 years $22.000 6 years Salvage value end of fe (5) 52,000 S1,000 The Future worth (Fw) for the machine Y over the 12 years analysis period is:

A company with a MARR of 10% must install one of two production machines. The economic parameters of each machine are as follows: Machine Inital cost (5) Service e yean) $15,000 4 years $22.000 6 years Salvage value end of fe (5) 52,000 S1,000 The Future worth (Fw) for the machine Y over the 12 years analysis period is:

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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With the estimates shown below, Sarah needs to determine the trade-in (replacement) value of machine X that will render its AW equal to that of machine Y at an interest rate of 11% per year. Determine the replacement value. Market Value, $ Annual Cost, $ per Year Salvage Value Life, Years The replacement value is $ Machine X ? -62,500 12,500 3 Machine Y 85,000 -40,000 for year 1,increasing by 2000 per year thereafter. 21,000 5
A piece of equipment has a first cost of $75000, a maximum useful life of 4 years, and a market (salvage) value described by the relation Sk = 60000 – 10500k, where k is the number of years since it was purchased. The AOC series is estimated using AOC = 30000 + 4500k. The interest rate is 9% per year. When should the company replace this asset?
ZLX is evaluating an investment and has generated the following: Initial investment at time t=0 is $2,000,000 Life of project is 8 years Initial investment depreciated to $0 via straight-line over entire life NWC investment required = $0.00 Expected market salvage value of investment assets = $0.00 Starting 1-year from today, and remaining constant over project life: Incremental sales as a result of investment = $1,600,000 / year Incremental expenses as a result of investment = $1,100,000 / year firm' tax rate = 28% What is the IRR of this investment? Enter rate in decimal form, rounded to fourth digit, as in "0.1234"
Pina Colada Manufacturing Company is considering three new projects, each requiring an equipment investment of $25,600. Each project will last for 3 years and produce the following cash flows. Year 1 2 3 AA BB $8,200 $11,100 $12,200 11,200 10,200 16,200 Total $34,600 (a) 11,100 11,100 Payback period $33,300 CC 10,200 The salvage value for each of the projects is zero. Pina Colada uses straight-line depreciation. Pina Colada will not accept any project with a payback period over 2.2 years, Pina Colada's minimum required rate of return is 12%. Click here to view PV tables. $33,600 Compute each project's payback period: (Round answers to 2 decimal places, e.g. 52.75.) AA years BB years CC years
For the below ME alternatives, which machine should be selected based on the AW analysis. MARR=10% First cost, $ Annual cost, $/year Salvage value, $ Life, years Machine A 15000 B- AW for machine B= 8,342 4,000 Answer the below questions : Machine B 6 20,447 6,000 5,000 Machine C 10000 4,000 1,000
E1
Calculate the present worth of all costs for a newly acquired machine with an initial cost of $24,000, no trade-in value, a life of 11 years, and an annual operating cost of $14,000 for the first 6 years, increasing by 10% per year thereafter. Use an interest rate of 10% per year. The present worth of all costs for a newly acquired machine is determined to be $
24. Using a MARR of 15%, determine the annual worth of packaging equipment having an initial cost of P830 000, a 10-year life, and a salvage value of P140 000.00. A net revenue of P250 000.00 per year is expected from this equipment. (Ans. P91 516.08)
A firm is considering an investment in new equipment that has the following information. Purchase Cost: $132,793 Salvage Value in five years time: $18,337 Useful life is 5 years and depreciation is determined using the straightline method. Expected increased annual cash flows are $52,651 What is the payback period in years? Calculate to 2 decimal places
Two machines with the following cost estimates are under consideration for a dishwasher assembly process. Using an interest rate of 10% per year, determine which alternative should be selected on the basis of an annual worth analysis.
Project XYZ has a first cost of $75,000, operating and maintenance costs of $10,000 during each year of its 10 years life, and a $15,000 salvage value. What is its equivalent uniform annual cost (EUAC) if the interest rate is 10%/year? Most nearly number for answer. O No correct answer 21546 O 21262 21622 26223 22126
Heidi Company is considering the acquisition of a machine that costs $453,000. The machine is expected to have a useful life of 6 years, a negligible residual value, an annual net cash inflow of $119,000, and annual operating income of $80,621. The estimated cash payback period for the machine is (round to one decimal point)? Oa. 18 years Ob. 5.6 years Oc. 50 years Od. 65 years

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