An equipment is bought for $9,000 and sold at the end of its service life for $800. If the service period is 10 years and the MARR is 10%, then the minimum annual savings that this equipment must yield for it to break even is closest to?
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- Lipsion Ltd company is thinking about investing in one of two potential new productsfor sale. The projections are as follows: year revenue/ (product s) revenue/ (product V) 0 (150,000) outlay (150,000) outlay 1 14,000 15,000 2 24,000 25,333 3 44,000 52,000 4 84,000 63,333 Calculate the payback period for both products in years and months, not as a decimal. Please present answer to nearest month.Given the following two alternatives and using the repeatability assumption and MARR=15%/year, the equation for computing the present worth of vendor B is Vendor A First Cost, $ -15,000 Annual cost, $ per year -3500 Salvage Value, $ 1000 Life, years 3 Vendor B -18000 -3100 2000 4 OPW=18000-18000(P/F,15%, 4)-18000(P/F,15%, 8)+2000(P/F, 15%, 4)+2000(P/F, 15%, 8) +2000 (P/F, 15%, 12)-3100(P/A, 15%, 12) PW=18000-18000(P/F, 15%, 12)+2000(P/F, 15%, 4)+2000 (P/F, 15%, 8)+2000(P/F, 15%, 12)-3100(P/A, 15%, 12) O PW=-18000-18000(P/F,15%, 4) - 18000(P/F,15%, 8) +2000(P/F, 15%, 4)+2000(P/F, 15%, 8) +2000 (P/F, 15%, 12)-3100(P/A, 15%, 12) O PW=-18000(P/F,15%, 4) -18000(P/F,15%, 8) +2000(P/F, 15%, 4)+2000(P/F, 15%, 8) +2000(P/F, 15%, 12)-3100(P/A, 15%, 12)Show complete solutiion. Do not use excel. Manual Method. Steel drums manufacturer incurs a yearly operating cost of P 200,000. Each drum manufactured cost P 160 and sells for P 300. A machine use for the production has a first cost of P 20,000 and a salvage value of P 2,000 after producing 1,000 units. What is the break even number of units per year?
- Chambers Company has just gathered estimates forconducting a break-even analysis for a new product.Variable costs are $7 a unit. The additional plant willcost $48,000. The new product will be charged $18,000a year for its share of general overhead. Advertisingexpenditures will be $80,000, and $55,000 will be spenton distribution. If the product sells for $12, what is thebreak even point in units? What is the break even pointin dollar sales volume?Nissan is advertising a 24-month lease on the all-electric Leaf for $190 payable at the beginning of each month. The lease requires a $2000 down payment plus the first months payment on signing. No security deposit is required. The lessee pays for maintenance, excess wear and tear, and $0.18 per mile over 12,000 miles per year. Lease end purchase option is $17500 and lease payments total $4560. A disposition fee of $350 is due at the end of the lease period. Assuming an interest rate of 6% compounded monthly, what is the total cost of leasing if you put 40,000 miles at the end of lease?Two lathes are being considered in the manufacture of certain machine parts. Data is given below, all cost in peso: LATHE A LATHE B First Cost 40,000 56,000 Salvage Value 5,000 7,000 Annual Maintenance 2,000 2,800 Operation, Cost/hour 4 3.5 Life, in years 10 12 Time per part (hours) 0.40 0.25 REQUIRED: Determine the number of machine parts/year that could be produced so that 2 lathes will be equally economical if the MARR is 18%. Use AWM If the number of parts is 10,000 units, which lathe will you recommend? Use ROR If the number of parts is 10,000 units, which lathe will you recommend? Use PWM If the number of parts is 10,000 units, which lathe will you recommend? Use EUAC
- Cell (A) stands for the total cost of 9 units. Its value should be ____. a) 151.65b) 323.52c) 909.80d) 252.75You are starting a new project. This project would last 4 years. The following is the input information that you have collected: Building cost (1.3% in the first year and then 2.6% every year) $12,000,000 Equipment cost (MACRS 5 years) $8,000,000 Net operating working capital requirement (% of Sales) 10% First year sales (in units) 20,000 Growth rate in units sold 0% Sales price per unit $3,000 Variable cost per unit $2,100 Fixed costs $8,000,000 Market value of building at the end of year 4 7,500,000 Market value of equipment at the end of year 4 2,000,000 Tax rate 40% WACC 12% Inflation growth in sales price per year 2% Inflation growth in VC per unit per year 2% Inflation growth in fixed costs per year 1% What is the NPV of this project? (In your calculations use zero decimal spaces/round to the whole numbers).A company is considering three types of equipment for its manufacturing plant. Pertinent data are as follows: Турe A Туре В Туре С First cost P150,000 P200,000 P250,000 Annual operating cost P30,000 P25,000 P20,000 Annual labor cost P50,000 P40,000 P35,000 Insurance and property taxes 3% 3% 3% Payroll taxes 4% 4% 4% Estimated life 10 10 10 If the minimum required rate of return is 15%, which equipment should be selected? Use: The Rate of Return on Additional Investment Method
- You purchased a building 5 years ago for P 5M. Its annual maintenance expense has been P 250,000 per year. At the end of three years, you spent P 450,000 on roof repairs. At the end of 5 years (now), you sell the building for P 6M. During the period of ownership, you rented the building for P 500,000 per year paid at the beginning of each year. Use the AW AW, PW, FW and ERR method in your solution evaluate this investment when your MARR is 12% per year.You invested $100,000 in a project and received $40,000 at n = 1, $40,000 atn = 2, and $30,000 at n = 3 years. You need to terminate the project at the end of year 3. Your interest rate is 10%; what is the project balance at the time of termination?(a) Gain of $10,000(b) Loss of $8,039(c) Loss of $10,700(d) Just break evenLim Bon Fing Y Hermanos Inc has offered for sale its two-storey building in thecommercial district of Cebu City. The building contains two stores on the ground floor anda number of offices on the second floor.A prospective buyer estimates that if he buys this property, he will hold it for about 10years. He estimates that the average receipts from the rental during this period to beP350,000.00 and the average expenses for all purpose in connection with its ownershipand operation (maintenance and repairs, janitorial services, insurance, etc.) to beP135,000.00. He believes that the property can be sold for a net of P2,000,000 at the endof the 10th year. If the rate of return on this type of investment is 7%, determine thecash price of this property for the buyer to recover his investment with a 7% return beforeincome taxes.ANSWER: P2,526,768.61