A new absorption chiller system costs $360,000 and will save $52,500 in each of the next 12 years. The asset is classified as a seven-year MACRS property for depreciation purpose. The expected salvage value is $20,000. The firm pays taxes at a combined rate of 40% and has an MARR of 12%. What is the net present worth of the system?(a) $46,725(b) $63,739(c) $62,112(d) $53,317

Astor Industries plans to automate its production process. The new equipment will cost $460,000 and will provide net cash inflows in the form of annual cost savings of $110,000 each year for 6 years. At the end of year 6, Astor will spend $50,000 to refurbish the equipment so that it can be used for one more year. The equipment will provide cost savings of $65,000 in year 7 and will have a salvage value of $30,000 at the end of year 7. Astor uses a discount rate of 10% to make capital budgeting decisions. What is the net present value of this project? O $24,195 O $39.585 O $67,785 O $125.685 pts O None of the above

Assume that a company purchased a new machine for $26,000 that has no salvage value. The machine is expected to save the company $6,000 a year in cash operating costs for seven years. The company also expects the machine to provide annual intangible benefits that are difficult to quantify. Assuming the company’s hurdle rate is 24%, the minimum value of the intangible benefits that would be required to make this investment acceptable is closest to:

Heidi Company is considering the acquisition of a machine that costs $401,000. The machine is expected to have a useful life of 6 years, a negligible residual value, an annual net cash inflow of $128,000, and annual operating income of $88,392. The estimated cash payback period for the machine is (round to one decimal point)? a.5.5 years b.4.5 years c.4.0 years d.3.1 years

The DDB Corporation wants to purchase a new machine for its factory operations at a cost of P 800,000. The investment is expected to generate P 400,000 in annual cash flows for a period of five years. The required rate of return is 10%. The old machine can be sold for P 75,000. The machine is expected to have zero value at the end of the five-year period. Disregard income taxes and depreciation. Compute for net present value of the investment.

The Sip & Dip Donut company is considering the acquisition of a new automatic donut dropper for $600,000. The machine will have a six-year life and will produce before tax cash savings of $200,000 each year. The asset is to be depreciated using the straight-line method with no salvage value. The company's tax rate is 40 percent. What is the after-tax net cash inflow on the investment?

A machine costs $600,000 and is expected to yield an after-tax net income of $23,000 each year. Management predicts this machine has a 12-year service life and a $120,000 salvage value, and it uses straight-line depreciation. Compute this machine's accounting rate of return. Choose Numerator: Annual after-tax net income $ 1 23,000 / Accounting Rate of Return Choose Denominator: Annual average investment $ = 360,000 = Insert

Your company is considering taking on a new project that will cost $200,000. It is estimated that the system will increase sales/revenues by $150,000 annually for Years 1-6. Operating expenses, other than depreciation, are expected to be equal to 60 percent of sales in each year. The system will be depreciated on a MACRS basis over 5 years (depreciation rates are 20%, 32%, 19%, 12% 11%, and 6%) to a zero book value, but the expected salvage at Year 6 is $40,000. The firm will also be required to invest $25,000 in net working capital at Year 0, but will recapture this amount at Year 6. You may assume that the tax rate on ordinary income is 40 percent (record negative taxes as a positive cash flow). As you can calculate, the IRR for this project is 13.02%. If we assume that the firm's cost of capital for this project is 11 percent, then what is the NPV for this project? $29,055.63 O $37.201.15 $6,874.69 $21,301.58 O $13,915.29

A new machine costing $150,000 is expected to save the McKaig Brick Company $11,000 per year for 5 years before depreciation and taxes. The machine will be depreciated on a straight-line basis for a 5-year period to an estimated salvage value of $0. The firm’s marginal tax rate is 40 percent. What are the annual net cash flows associated with the purchase of this machine? Round your answer to the nearest dollar. $   Compute the net investment (NINV) for this project. Round your answer to the nearest dollar. $

ces Finch Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce the company's cash outflow for operating expenses by $1,280,000 per year. The cost of the equipment is $6,820,160.00. Finch expects it to have a 9-year useful life and a zero salvage value. The company has established an investment opportunity hurdle rate of 11 percent and uses the straight-line method for depreciation. (PV of $1 and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required a. Calculate the internal rate of return of the investment opportunity. Note: Do not round intermediate calculations. b. Indicate whether the investment opportunity should be accepted. a. Internal rate of return b. Should the investment opportunity be accepted? % 4