It costs $30,000 to retrofit the gasoline pumps at a certain filling station so the pumps can dispense E85 fuel (85% ethanol and 15% gasoline). If the station makes a profit of $0.08 per gallon from selling E85 and sells an average of 20,000 gallons of E85 per month, how many months will it take for the owner to recoup her $30,000 investment in the retrofitted pumps? The interest rate is 1% per month.

Big Rock Brewery currently rents a bottling machine for $51,000 per year, including all maintenance expenses. The company is considering purchasing a machine instead and is comparing two alternate options: option a is to purchase the machine it is currently renting for $160,000, which will require $20,000 per year in ongoing maintenance expenses, or option b, which is to purchase a new, more advanced machine for $250,000, which will require $19,000 per year in ongoing maintenance expenses and will lower bottling costs by $13,000 per year. Also, $36,000 will be spent upfront in training the new operators of the machine. Suppose the appropriate discount rate is 9% per year and the machine is purchased today. Maintenance and bottling costs are paid at the end of each year, as is the rental of the machine. Assume also that the machines are subject to a CCA rate of 45% and there will be a negligible salvage value in 10 years' time (the end of each machine's life). The marginal corporate tax…

A new machine is bought by Obsidian Corporation to process potato chips for $75,000. They add a customized conveyor belt to connect it to their current system for $10,000. It will use an extra $2,000 a year in electricity and costs $1,000 to insure. What is the recorded value of the new machine?

Big Rock Brewery currently rents a bottling machine for $55,000 per year, including all maintenance expenses. The company is considering purchasing a machine instead and is comparing two options: a. Purchase the machine it is currently renting for $165,000. This machine will require $20,000 per year in ongoing maintenance expenses. b. Purchase a new, more advanced machine for $260,000. This machine will require $16,000 per year in ongoing maintenance expenses and will lower bottling costs by $11,000 per year. Also, $39,000 will be spent upfront in training the new operators of the machine. Suppose the appropriate discount rate is 9% per year and the machine is purchased today. Maintenance and bottling costs are paid at the end of each year, as is the rental of the machine. Assume also that the machines are subject to a CCA rate of 45% and there will be a negligible salvage value in ten year's time (the end of each machine's life). The marginal corporate tax rate is 35%. Should Big Rock…