A manufacturing company is considering a capacity expansion investment at the cost of $250,000. The expansion would enable the company to produce up to 100,000 more parts and the useful life of the additional capacity is seven years. Each part would generate $2 net profit and annual operating and maintenance costs are estimated at $25,000 per year. If the MARR of the firm is 10%, what is the minimum yearly production rate to make this investment justifiable?Assume a salvage value of 0.(a) Less than 37,000                       (b) Between 37,000 and 39,000(c) Between 39,000 and 42,000        (d) More than 42,000

Suppose you are considering an investment project that requires $800,000, has a six-year life, and has a salvage value of $100,000. Sales volume is projected to be 65,000 units per year. Price per unit is $63, variable cost per unit is $42, and fixed costs are $532,000 per year. The depreciation method is a five-year MACRS. The tax rate is 35% and you expect a 20% return on this investment.(a) Determine the break-even sales volume.(b) Calculate the cash flows of the base case over six years and its NPW.(c) lf the sales price per unit increases to $400, what is the required break-even volume?(d) Suppose the projections given for price, sales volume, variable costs, and fixed costs are all accurale to wi thin ± 15%. What would be the NPW figures of the best-case and worst-case scenarios?

Your firm requires an average accounting return (AAR) of at least 15 percent on all fixed asset purchases. Currently, you are considering some new equipment costing $96,000. This equipment will have a 3-year life over which time it will be depreciated on a straight line basis to a zero book value. The annual net income from this project is estimated at $5,500, $12,400, and $17,600 for the 3 years. Should you accept this project based on the accounting rate of return? Why or why not? a. no; because the AAR is equal to 15 percent b. yes; because the AAR is less than 15 percent c. yes; because the AAR is greater than 15 percent d. yes; because the AAR Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.

Sheridan's Hair Salon is considering opening a new location in French Lick, California. The cost of building a new salon is $261,000. A new salon will normally generate annual revenues of $63,650, with annual expenses (including depreciation) of $40,200. At the end of 15 years, the salon will have a salvage value of $74,000. Calculate the annual rate of return on the project. Annual rate of return eTextbook and Media Save for Later % Attempts: 0 of 7 used Submit Answer

A corporation is considering purchasing amachine that will save $150,000 per year beforetaxes. The cost of operating the machine (includingmaintenance) is $30,000 per year. The machine willbe needed for five years, after which it will have azero salvage value. MACRS depreciation will beused, assuming a three-year class life. The marginalincome tax rate is 40%. If the firm wants 15% returnon investment after taxes, how much can it afford topay for this machine?

A company is considering purchasing a new piece of equipment that costs $100,000 and has an estimated useful life of 5 years. The equipment should increase annual cash receipts by $80,000 per year. Cash expenses to operate the equipment should be $25,000. The company uses straight-line depreciation. If the after-tax cost of capital is 10% and the tax rate is (Round your 30%, the net present value of this project based on the tables in the appendix is $ answer to the nearest whole number.) Need help? Review these concept resources. Read About the Concept

A corporation is considering purchasing a machine that will save $150,000 per year before taxes. The cost of operating the machine (including maintenance) is $30,000 per year. The machine will be needed for five years, after which it will have a zero salvage value. MACRS depreciation will be used, assuming a three-year class life. The marginal income tax rate is 25%. If the firm wants 15% return on investment after taxes, how much can it afford to pay for this machine? Click the icon to view the MACRS depreciation schedules Click the icon to view the interest factors for discrete compounding when /- 15% per year. If the firm wants 15% return on investment after taxes, it can afford to pay thousand for this machine. (Round to one decimal place.)

You are considering purchasing a new injection molding machine. This machinewill have an estimated service life of 10 years with a negligible salvage value.Its annual net operating cash flows are estimated to be $60,000. To expect a 15%rate of return on investment, what would be the maximum amount that should bespent on purchasing the injection molding machine?(a) $301,126 (b) $234,645(c) $600,000 (d) $126,450

ACE Ltd is evaluating whether it should invest in a machine that costs $100,000. The machine would be fully depreciated over ten years to zero value using the straight-line depreciation method. With the new machine, the firm projects that it will be able to generate an additional $20,000 annually in sales revenue and additional $10,000 cost annually. The firm would also need an additional net working capital of $40,000. Given the firm’s cost of capital is 10% and tax rate of 20%, calculate annual operating cash flow (OCF) of the investment.

Consider a new machine at a bottling plant that has a first cost of $250000, operating and maintenance costs of $15600 per year, and an estimated net salvage value of $23000 at the end of 30 years. Assume an interest rate of 7%. What is the annual equivalent cost of the investment if the planning horizon is 30 years? S