Office Automation Inc. must choose between two copiers, XX40 and RH45. XX40 costs less than RH45, but its economic life is shorter.The costs and maintenance expenses of these two copiers are given as follows. These cash flows are expressed in real terms:CopierXX40RH45Year 0$ 9001,400Year 1$ 12095Year 2$ 12095Year 3Year 4Year 5$ 12095$ 95$ 95The inflation rate is 5 percent and the nominal discount rate is 14 percent. Assume that revenues are the same regardless of thecopier, and that whichever copier the company chooses, it will buy the model forever.a. Calculate the value of EAC for XX40 and RH45 copier? (Input all amounts as positive values. Do not round intermediatecalculations. Round the final answers to 2 decimal places. Omit $ sign in your response.)CopierXX40EAC$ -955.08 ⭑RH45$-338.82b. Which copier should the company choose? Ignore taxes and depreciation.XX40RH45

EAC is the uniform equivalent annual cost which includes the cost of ownership and cost of…

Answered: Office Automation Inc. must choose…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 7EB: An auto repair company needs a new machine that will check for defective sensors. The machine has an...

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Based on the pro - forma income statement, please estimate OCF and complete the tables. Sales 125,000 Variable costs -29, 000 Fixed costs -30,000 Depreciation -12,800 EBIT 53, 200 Tax -18, 620 NI 34, 580 Enter your final answers as whole numbers without using 1000 separators. Use a " -" sign for cash costs, expenses, cash outflows. (1) Starting from EBIT EBIT + Depreciation - Tax OCF? = OCF What is EBIT? What is Depreciation? What is Tax? What is
In each of the following cases, calculate the accounting break-even and the cash break- even points. Ignore any tax effects in calculating the cash break-even. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Case Unit Price Unit Variable Cost Fixed Costs 1 2 3. $ 2,830 56 13 $ 2,315 45 4 Depreciation $8,000,000 45,000 1,900 $2,460,000 170,000 800 Case Accounting break-even Cash break-even 2 3
In each of the following cases, calculate the accounting break-even and the cash break- even points. Ignore any tax effects in calculating the cash break-even. (Do not round Intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Case 123 Case 1 2 3 Unit Price $ 2,980 44 8 Unit Varlable Cost $1,640 39 3 Accounting break-even Fixed Costs $ 7,200,000 275,000 5,800 Cash break-even Depreciation $2,900,000 183,000 1,100
3. [EXCEL] Cash conversion cycle: Devon Automotive management estimates that it takes the company 62 days to collect cash from customers on finished goods from the day it receives raw materials, and it takes 65 days to pay its suppliers. What is the company's cash conversion cycle? Interpret your answer.
An auto repair company needs a new machine that will check for defective sensors. The machine has an Initial investment of $224,000. Incremental revenues, including cost savings, are $120,000, and Incremental expenses, including depreciation, are $50,000. There is no salvage value. What is the accounting rate of return (ARR)?
In each of the following cases, calculate the accounting break-even and the cash break- even points. Ignore any tax effects in calculating the cash break-even. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Unit Case Price $3,010 1 2 3 Case 1 2 3 86 19 Unit Variable Cost $2,435 57 5 Fixed Costs Depreciation $2,660,000 $8,040,000 230,000 820 75,000 2,500 Accounting break-even Cash break-even
A product is currently reported on the balance sheet at a cost of $29. The selling price of the product is currently $30 and disposal costs are $3. If the company had to buy the product today, it would pay $28. The product has a normal profit margin on sales of 30%. What amount should the product be valued at under each of the following methods? Lower of Cost or Market (LCM) Lower of Cost of Net Realizable Value (LCNRV)
A company has to decide between two machines that do the same job but have different lives.Net Cash Flow Machine 1 Machine 2 -$40,000 -$55,000-$15,000 -$10,000-$15,000 -$10,000-$15,000 -$10,000 -$10,000Which machine should the company buy, al an interest rate of 10%, based on the principle of internal rate of return?
| Dally Inc. has the following information about its truck fleet miles and operating costs: Year 2016 2017 Miles 400,000 428,000 560,000 Operating Costs $256,000 $254,000 $320,000 2018 What is the best estimate of total operating costs if the expected fleet mileage for 2019 is 482,000 miles? Round your answer to the nearest dollar. a. $288,800 b. $267,667 с. $289,200 d. $125,000 e. $192,800 f. $308,480 g. $281,000 h. None of the above. 3.
What is the incremental cash flow for a company that forgoes $7000 p.a. rental for factory space for manufacturing a product that will return net cash inflows of $20 000 p.a.?
. Consider the following information: ITEM SALES(Units) SALES VARIABLE COST A 9000 $54000 5.95 B 12000 60000 3.75 C 15000 60000 3.50 D 25000 75000 1.75 Costs of the period are as follows (salaries $45000, rent $10000, depreciation $8000, furniture and computers $24000, raw materials $ 120,000, insurance $5000, periodic maintenance $4000, interest expense $3000, utilities (fixed) $4000, property tax $3000, advertising $9000 (set at the beginning of the year), and new cars $62000). What is the breakeven point for all items? How many units of item A, B, C, & D are needed to breakeven? Calculate the profit of item A.
I need help with finding the accounting breakeven and cash break even and OCF at financial breakeven with taxes. Also, what excel function to use for NPV calculation in the NPV profile D11 XVfx C TOSK T lapet area: Initial cost Unit sales Price/unit Variable cost/unit B TOYT E Fixed costs Project life 1,000,000 Required return 11% 5,000 Tax rate 21% 7,000 Unit sales uncertainty 8% 6,400 Variable cost uncertainty 270,000 Fixed cost uncertainty 8% 5 Question 1 Base Case Best Case Worst Case Unit sales 5,000 Variable cost/unit 6,400 5,400 1 5,888 4,600 6,912 Fixed costs 270,000 Sales 35,000,000 Variable cost 32,000,000 Fixed cost 270,000 Depreciation 200,000 248,400 37,800,000 31,795,200 248,400 ! 200,000 32,200,000 31,795,200 291,600 291,600 200,000 EBIT 2,530,000 5,556,400 (86,800) Taxes (21%) Net income OCF 531,300 1,166,844 (18,228) 1,998,700 4,389,556 (68,572) 2,138,700 4,589,556 131,428 NPV $7.126.168.77 $15,962,526.33 ($514,255.65) Question 2 fignoring Taxes with Taxes) x…

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