B Problem 16-142 (Algo) Tanner Corporation is considering the acquisition of... nner Corporation is considering the acquisition of a new machine that is expected to produce annual savings in cash operating costs $55,000 before income taxes. The machine costs $150,000, has a useful life of five years, and no salvage value. Tanner uses raight-line depreciation on all assets, is subject to a 10% Income tax rate, and has an after-tax hurdle rate of 10%. Year 1 2 3 4 5 6 FV of $1 at FV of an ordinary annuity PV of $1 at PV of an ordinary annuity 10 % at 10% at 10% 1.100 1.210 1.331 1.464 1.611 1.772 1.000 2.100 3.310 4.641 6.105 7.716 A Rate of return B. Net present value 10% 0.909 0.826 0.751 % 0.683 0.621 0.564 equired: . Compute the machine's accounting rate of return on the initial investment. . Compute the machine's net present value. Note: For all requirements, do not round Intermediate calculations. Round final answers to whole number. 0.909 1.736 2.487 3.170 3.791 4.355

B Problem 16-142 (Algo) Tanner Corporation is considering the acquisition of... nner Corporation is considering the acquisition of a new machine that is expected to produce annual savings in cash operating costs $55,000 before income taxes. The machine costs $150,000, has a useful life of five years, and no salvage value. Tanner uses raight-line depreciation on all assets, is subject to a 10% Income tax rate, and has an after-tax hurdle rate of 10%. Year 1 2 3 4 5 6 FV of $1 at FV of an ordinary annuity PV of $1 at PV of an ordinary annuity 10 % at 10% at 10% 1.100 1.210 1.331 1.464 1.611 1.772 1.000 2.100 3.310 4.641 6.105 7.716 A Rate of return B. Net present value 10% 0.909 0.826 0.751 % 0.683 0.621 0.564 equired: . Compute the machine's accounting rate of return on the initial investment. . Compute the machine's net present value. Note: For all requirements, do not round Intermediate calculations. Round final answers to whole number. 0.909 1.736 2.487 3.170 3.791 4.355

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter12: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 11P: REPLACEMENT ANALYSIS St. Johns River Shipyards is considering the replacement of an 8-year-old...

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