Correct Answer Your company is deciding whether to invest in a new machine. The new machine will increase cash flow by $343,762 per year. You believe the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $1,760,000. The cost of the machine will decline by $110,000 per year until it reaches $1,320,000, where it will remain. The required return is 16%. What is the value of the option to wait 2 years to purchases the machine? (Round answer to 2 decimal places. Do not round intermediate calculations) 63,711.41 margin of error +/- 0.02

dad.3   XYZ Inc. is deciding whether to buy a new building. The building will increase cash flows by $6,000,000 per year. The building has a 20-year life and will be obsolete 20 years from today. The building is currently priced at $22 million. The cost of the building will decline by $1,500,000 per year until it reaches 10 million, where it remains until it is obsolete. The required rate of return is 10%. Assuming XYZ is willing to wait and risk not being able to acquire the building, how many years from today should they wait to purchase the building to maximize the NPV?

A mini-mart needs a new freezer and the initial investment will cost $310,000. Incremental revenues, including cost savings, are $198,000, and incremental expenses, including depreciation, are $125,000. There is no salvage value. What is the accounting rate of return (ARR)? How much must be invested now to receive $30,000 for 10 years if the first $30,000 is received one year from now and the rate is 8%?

Your company is deciding whether to invest in a new machine. The new machine will increase cash flow by $490,000 per year. You believe the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $2.87 million. The cost of the machine will decline by $319,000 per year until it reaches $1.275 million, where it will remain. If your required return is 8 percent, should you purchase the machine? If so, when should you purchase it?

A firm is considering an investment in a new machine with a price of $15.9 million to replace its existing machine. The current machine has a book value of $5.7 million and a market value of $4.4 million. The new machine is expected to have a 4-year life, and the old machine has four years left in which it can be used. If the firm replaces the old machine with the new machine, it expects to save $6.45 million in operating costs each year over the next four years. Both machines will have no salvage value in four years. If the firm purchases the new machine, it will also need an investment of $280,000 in net working capital. The required return on the investment is 11 percent and the tax rate is 23 percent. The company uses straight-line depreciation. a)- What is the NPV of the decision to purchase the new machine? b) What is the IRR of the decision to purchase the new machine? c) WHat is the NPV of the decison to keep using the old machine? d) What is the IRR of the decison to keep…

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Nikul

At the beginning of 2018, Apple Corp. is considering to replace an old machine.The old machine is fully depreciated but can still be used for five years, that is, through 2022. If replaced, it can be replaced for P50,000 on the replacement date. The machine has a purchase price of P1,000,000. The use of the new machine will result in greater operating efficiency and will cause annual cash savings in operating costs of P320,000 through 2022, the end of its expected useful life. Both machines will have no salvage value at the end of 2022.Apple Corp. requires all investments to earn 10% after-tax rate of return to be accepted. It is subject to 32% income tax rate. The new machine will be depreciated on a straight-line basis over a period of five years, from 2018 to 2022.Use 3 decimal places for the PV factor.The new machine’s profitability index is?   0.937 1.105 1.068 0.905

Accounting The SWEET Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $200,000. The equipment will have an initial cost of $900,000 and have a 6-year life. The salvage value is $60,000 at the end of the sixth year. If the hurdle rate is 12%, the internal rate of return is ____ %. (express your final answer in basis points, i.e., 13.14%)

give me the right answer only ASAP   Suppose we are thinking about replacing an old computer with a new one. The old one cost us $1.4 million; the new one will cost $1.7 million. The new machine will be depreciated straight-line to zero over its five-year life. It will probably be worth about $325,000 after five years.   The old computer is being depreciated at a rate of $281,000 per year. It will be completely written off in three years. If we don’t replace it now, we will have to replace it in two years. We can sell it now for $450,000; in two years, it will probably be worth $130,000. The new machine will save us $315,000 per year in operating costs. The tax rate is 22 percent, and the discount rate is 12 percent.   a-1. Calculate the EAC for the old and the new computer. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a-2. What is the NPV of the decision to…