our company is looking at purchasing a front-end loader at a cost of $120,000. The loader can be billed out at $107.00 per hour. It costs $30.00 per hour to operate the front-end loader and $37.00 per hour for the operator. The useful life of the equipment is five years. Using 1,200 billable hours per year and a MARR of 10%, determine the payback period with interest for the front-end loader. 2.89 4.15 4.52 3.74 3.02 Please write to text formet but don't copy paste

our company is looking at purchasing a front-end loader at a cost of $120,000. The loader can be billed out at $107.00 per hour. It costs $30.00 per hour to operate the front-end loader and $37.00 per hour for the operator. The useful life of the equipment is five years. Using 1,200 billable hours per year and a MARR of 10%, determine the payback period with interest for the front-end loader. 2.89 4.15 4.52 3.74 3.02 Please write to text formet but don't copy paste

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 17EB: Caduceus Company is considering the purchase of a new piece of factory equipment that will cost...

See similar textbooks

Similar questions

Conestoga Plumbing plans to invest in a new pump that is anticipated to provide annual savings for 10 years of $50,000. The pump can be sold at the end of the period for $100,000. What is the present value of the investment in the pump at a 9% interest rate given that savings are realized at year end?
Caduceus Company is considering the purchase of a new piece of factory equipment that will cost $565,000 and will generate $135,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return In Excel, see Appendix C.
A restaurant is considering the purchase of new tables and chairs for their dining room with an initial investment cost of $515,000, and the restaurant expects an annual net cash flow of $103,000 per year. What is the payback period?
RJR Logistics needs a new color printer. The cost of the printer is $2,025, plus $380 per year in maintenance costs (the first maintence cost would occur in 1 year). The color printer will last for five years. Alternatively, a local company offers to lease the printer to RJR and do the maintenance as well. If the discount rate is 5.7%, what is the most RJR would be willing to pay per year to lease the color printer (the first lease payment would be due in one year)? The most RJR would be willing to pay per year to lease the color printer is closest to: O A. $897 B. $857 C. $884 D. $777
The initial cost needed to set up your freelancing engineering design service is $50,000. The salvage value of the equipment you purchased is $2,500 after five years. You estimated that each hour of design would cost you $75 per day. If you offered your services online with a price of $310 per day, how many days per year must you work to break even if the interest rate is 10% per year?
You are considering purchasing a dump truck. The truck will cost $45,000 and have operating and maintenance costs that start at $15,000 in the first year and increase by $2,000 per year thereafter. Assume that the salvage value at the end of five years is $9,000 and the interest rate is 12%. Determine the equivalent annual cost of owning and operating the truck.
A precision lathe costs $11,300 and will cost $26,500 a year to operate and maintain. If the discount rate is 12% and the lathe will last for 4 years, what is the equivalent annual cost of the tool? (Enter your answer as positive value. Round your answer to the nearest cent.) The equivalent annual cost $
Cal Construction Company must choose between two types of cranes. Crane X costs $600,000, will last for 5 years, and will require $60,000 in maintenance each year. Crane Y costs $800,000 and will last for 7 years and will require $30,000 in maintenance each year. Maintenance costs for cranes X and Y are incurred at the end of each year. The appropriate discount rate is 10% per year. Which machine should the company purchase? Crane X as EAC is $218,278.49 Crane X as EAC is $827,447.21 Crane Y as EAC is $946,052.56 Crane Y as EAC is $194,324.40
A precision lathe costs $10,400 and will cost $22,000 a year to operate and maintain. If the discount rate is 13% and the lathe will last for 4 years, what is the equivalent annual cost of the tool? (Enter your answer as positive value. Round your answer to 2 decimal places.) The equivalent annual cost $
Elijah Enterprises will need to upgrade the computer system in 5 years. They anticipate the upgrade to cost $98,900. If the discount rate is 15%, what will be the required yearly investment needed to obtain the money for the upgrade?Round your (1+R)^n value to 2 decimal places and use that number for your final amount required rounded to the nearest dollar.
A construction firm needs a new small loader. It can be purchased for $20,000. The firm expects the loader to have a salvage value of $6,000 after 7 years. The maintenance cost will be $1,400 each year. The firm's interest rate is 1% per year. Compute the Equivalent Uniform Annual Worth (EUAW).
A specialized machine essential for a company's operations costs $5,000 and has operating costs of $2,000 the first year. The operating costs increase by $1,000 each year thereafter. We assume that the operating costs occur at the end of each year. The interest rate is 20% and the company plans to stay in operation forever. You have an option to replace the machine periodically after a period of n years, where n must be an integer. The replacement cost is $5,000. Your objective is to select the replacement period n such that the present value of the total cost is minímized. Assume that due to its specialized nature, the machine has no salvage value. What is the optimal replacement period, n? Note n must be an integer.