You are operating an old machine that is expected to produce a cash inflow of $6,100 in each of the next 3 years before it fails. Youcan replace it now with a new machine that costs $21,100 but is much more efficient and will provide a cash flow of $11,650 a year for 4years.Calculate the equivalent annual cost of the new machine if the discount rate is 14%.Note: Do not round intermediate calculations. Round your answer to 2 decimal places.Equivalent annual cost of the purchase priceShould you replace your equipment now?O YesNo

EAC means net annual cost of operating the machine. With the passage of time, the value of money…

can replace it now with a new machine that costs $21,100 but is much more efficient and will provide a cash flo years. Calculate the equivalent annual cost of the new machine if the discount rate is 14%. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Equivalent annual cost of the purchase price Should you replace your equipment now? O Yes No

can replace it now with a new machine that costs $21,100 but is much more efficient and will provide a cash flo years. Calculate the equivalent annual cost of the new machine if the discount rate is 14%. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Equivalent annual cost of the purchase price Should you replace your equipment now? O Yes No

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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Econo-Cool air conditioners cost $380 to purchase, result in electricity bills of $166 per year, and last for 5 years. Luxury Air models cost $580, result in electricity bills of $132 per year, and last for 8 years. The discount rate is 20%. a. What is the equivalent annual cost of the Econo-Cool model? Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
9.)show complete solution, final answer should be in two decimal only, i will automatically give upvote.
Modern Artifacts can produce keepsakes that will be sold for $50 each. Nondepreciation fixed costs are $2,500 per year, and variable costs are $30 per unit. The initial investment of $2,000 will be depreciated straight-line over its useful life of 5 years to a final value of zero, and the discount rate is 10%. Note: For all the requirements, do not round intermediate calculations. Round your answer up to the nearest whole unit. a. What is the accounting break-even level of sales if the firm pays no taxes? b. What is the NPV break-even level of sales if the firm pays no taxes? c. What is the accounting break-even level of sales if the firm's tax rate is 40%? d. What is the NPV break-even level of sales if the firm's tax rate is 40%? a. Acounting break-even level of sales b. NPV break-even level of sales c. Acounting break-even level of sales d. NPV break-even level of sales units units units units
You are operating an old machine that is expected to produce a cash inflow of $5,100 in each of the next 3 years before it fails. You can replace it now with a new machine that costs $20,100 but is much more efficient and will provide a cash flow of $10,150 a year 4 years. Calculate the equivalent annual cost of the new machine if the discount rate is 14%. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Equivalent ann the purchase price Should you replace your equipment now? Yes No
am. 117.
Our new computer system cost us $121,600. We will outgrow it in five years. When we sell it, we will probably get only 10% of the purchase price. CCA on the computer will be calculated at a 30% rate (Class 10). Calculate the CCA and UCC values for five years. (Round your intermediate calculations and final answers to 2 decimal places. Omit $ sign in your response.) Year 1 2 3 4 5 CCA $ Ending UCC $ $ $ What will be the after-tax proceeds from the sale assuming the asset pool remains open? Assume a 40% tax rate. (Omit $ sign in your response.) After-tax proceeds $
An engineer is considering the purchase of a new set of batteries for an electric pallet jack. Given the cost, annual benefit, useful life, and i = 5%, conduct a net future worth analysis to decide which alternative to purchase.
A firm can lease a truck for 4 years at a cost of $35,000 annually. It can instead buy a truck at a cost of $85,000, with annual maintenance expenses of $15,000. The truck will be sold at the end of 4 years for $25,000. a. What is the equivalent annual cost of buying and maintaining the truck if the discount rate is 12%? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Equivalent annual cost b. Which is the better option? Lease O Buy
A firm is considering two alternatives that have no salvage value. At the end of 4 years, another B may be purchased with the same cost, benefits and so forth. a. Construct a choice table for interest rates from 0% to 100%. b. If the MARR is 10%, which alternative should be selected? Item Initial Cost Uniform Annual Benefits Useful Life, in years A -$10,700 2,100 8 B -$5,500 1,800 4
Subject: accounting
Vaughn Excavating Inc. is purchasing a bulldozer. The equipment has a price of $97,600. The manufacturer has offered a payment plan that would allow Vaughn to make 10 equal annual payments of $15.883.95, with the first payment due one year after the purchase. x Your answer is incorrect. How much total interest will Vaughn pay on this payment plan? (Round factor values to 5 decimal places, eg 1.25124 and final answer to 0 decimal places, eg. 458.5811 Total interest 501877 Your answer is partially correct. Vaughncould borrow $97,600 from its bank to finance the purchase at an annual rate of 9% Click here to view factor tables Should Vaughn borrow from the bank or use the manufacturer's payment plan to pay for the equipment? (Round factor values to decimal places, s 1.25124 and final answer to O decimal places, eg 7%) 15.00 % Manufacturer's rate from the Da
A forklift will last for only 4 more years. It costs $6,500 a year to maintain. For $20,000 you can buy a new lift that can last for 10 years and should require maintenance costs of only $3,500 a year. a-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 4% per year. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a-2. Should you replace the forklift? b-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 14% per year. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b-2. Should you replace the forklift? a-1. Equivalent cost a-2. Should you replace the forklift? b-1. Equivalent cost b-2. Should you replace the forklift? $ Yes $ No 23,594.51 18,256.40

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