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Q: Beryl's Iced Tea currently rents a bottling machine for $52,000 per year, including all maintenance…
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A: Npv is the discounted present value of all the future cash flows after deduction of initial…
Q: Beryl's Iced Tea currently rents a bottling machine for $52,000 per year, including all maintenance…
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A: Net present value:The net present value (NPV) of the project represents the difference between the…
Q: Beryl's Iced Tea currently rents a bottling machine for $52,000 per year, including all maintenance…
A: As per the given information:
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Bridgewell Industries is evaluating the option of purchasing a fork-lift truck costing $60,000. If purchased, the truck will replace 4 workers, each with an average annual salary of $15,000. However, an experienced fork-lift operator will have to be hired at a salary of $20,000 per year. Fuel and maintenance expense is expected to be $10,000 per year. At the end of its 5-year life, the truck will have a market value of $10,000. Bridgewell uses straight-line
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- Beryl's Iced Tea currently rents a bottling machine for $53,000 per year, including all maintenance expenses. It is considering purchasing a machine instead, and is comparing two options: a. Purchase the machine it is currently renting for $150,000. This machine will require $20,000 per year in ongoing maintenance expenses. b. Purchase a new, more advanced machine for $255,000. This machine will require $17,000 per year in ongoing maintenance expenses and will lower bottling costs by $12,000 per year. Also, $38,000 will be spent upfront training the new operators of the machine. Suppose the appropriate discount rate is 8% 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 will be depreciated via the straight-line method over seven years and that they have a 10-year life with a negligible salvage value. The corporate tax rate is 28%. Should Beryl's Iced Tea continue…shobhaTanaka Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $417,000 is estimated to result in $155,000 in annual pretax cost savings. The press falls in the MACRS five-year class (MACRS schedule) and it will have a salvage value at the end of the project of $56,000. The press also requires an initial investment in spare parts inventory of $16,100, along with an additional $3,100 in inventory for each succeeding year of the project. The shop's tax rate is 21 percent and its discount rate is 8 percent. Calculate the project's NPV. Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Net present value
- Beryl's Iced Tea currently rents a bottling machine for $52,000 per year, including all maintenance expenses. It is considering purchasing a machine instead and is comparing two options: a. Purchase the machine it is currently renting for $160,000. This machine will require $20,000 per year in ongoing maintenance expenses. b. Purchase a new, more advanced machine for $265,000. This machine will require $17,000 per year in ongoing maintenance expenses and will lower bottling costs by $15,000 per year. Also, $35,000 will be spent up front to train the new operators of the machine. Suppose the appropriate discount rate is 8% per year and the machine is purchased today. Maintenance and bottling costs are paid at the end of each year, as is the cost of the rental machine. Assume also that the machines will be depreciated via the straight-line method over seven years and that they have a 10-year life with a negligible salvage value. The marginal corporate tax rate is 25%. The NPV of renting…SKR Inc. is considering the purchase of a new leather-cutting machine to replace an existing machine that has a book value of $5000 and can be sold for $ 1,500. The old machine is being depreciated as written down value method basis. The WDV rate is 20%. The old machine’s estimated salvage value 5 years from now is $0. The new machine will reduce fixed costs (before taxes) by $10,000 per year. The new machine will improve quality, thus increasing our leather sales from $25,000 to $35,000 per year. Variable costs are 45% of sales. The new machine has a 5-years life, it costs $20,200 and it can be sold for an expected $3,500 at the end of the third year. Because of the new sales, we will increase our inventory by $4,000, our accounts receivable by $500. The tax accountant has told SKR Inc that the new machine would also be depreciated using written down value method at 20%. Assume a 30% tax rate (corporate as well as capital gain) and a cost of capital of 15 per cent. You are required…Beryl's Iced Tea currently rents a bottling machine for $53,000 per year, including all maintenance expenses. It is considering purchasing a machine instead, and is comparing two options: a. Purchase the machine it is currently renting for $150,000. This machine will require $21,000 per year in ongoing maintenance expenses. b. Purchase a new, more advanced machine for $255,000. This machine will require $18,000 per year in ongoing maintenance expenses and will lower bottling costs by $13,000 per year. Also, $36,000 will be spent upfront training the new operators of the machine. Suppose the appropriate discount rate is 8% 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 will be depreciated via the straight-line method over seven years and that they have a ten-year life with a negligible salvage value. The corporate tax rate is 20%. Should Beryl's Iced…
- Beryl's Iced Tea currently rents a bottling machine for $53,000 per year, including all maintenance expenses. It is considering purchasing a machine instead, and is comparing two options: a. Purchase the machine it is currently renting for $150,000. This machine will require $20,000 per year in ongoing maintenance expenses. b. Purchase a new, more advanced machine for $265,000. This machine will require $18,000 per year in ongoing maintenance expenses and will lower bottling costs by $15,000 per year. Also, $35,000 will be spent upfront training the new operators of the machine. Suppose the appropriate discount rate is 8% 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 will be depreciated via the straight-line method over 7 years and that they have a 10-year life with a negligible salvage value. The corporate tax rate is 30%. Should Beryl's Iced Tea continue to…Beryl's Iced Tea currently rents a bottling machine for $51,000 per year, including all maintenance expenses. It is considering purchasing a machine instead, and is comparing two options: a. Purchase the machine it is currently renting for $150,000. This machine will require $25,000 per year in ongoing maintenance expenses. b. Purchase a new, more advanced machine for $255,000. This machine will require $15,000 per year in ongoing maintenance expenses and will lower bottling costs by $15,000 per year. Also, $35,000 will be spent upfront training the new operators of the machine. Suppose the appropriate discount rate is 8% 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 will be depreciated via the straight-line method over 7 years and that they have a 10-year life with a negligible salvage value. The corporate tax rate is 28%. Should Beryl's Iced Tea continue to…Wettway Sailboat Corporation is considering whether to launch its new Margo-class sailboat. The selling price will be $41,000 per boat. The variable costs will be about half that, or $20,000 per boat, and fixed costs will be $465,000 per year. The total investment needed to undertake the project is $3,100,000. This amount will be depreciated straight-line to zero over the 5-year life of the equipment. The salvage value is zero, and there are no working capital consequences. Wettway has a required return of 11 percent on new projects. FC + OCF-TCX D 1-TC P-v Use the above expression to find the cash, accounting, and financial break-even points for Wettway Sailboat. Assume a tax rate of 21 percent. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Cash break-even Accounting break-even Financial break-even
- A construction firm is considering establishing an engineering computing center. The center will be equipped with three engineering workstations that cost $45,000 each, and each has a service life of five years. The expected salvage value of each workstation is $2,000. The annual operating and maintenance cost would be $25,000 for each workstation. At a MARR of 15%, determine the equivalent annual cost for operating the engineering center. Click the icon to view the interest factors for discrete compounding when MARR= 15% per year. C The equivalent annual cost is $thousand. (Round to the nearest whole number.) More Info Worth Single Payment Compound Present Amount Factor (F/P, i, N) 1.1500 Compound Amount Factor (F/A, i, N) Factor (P/F, i, N) 0.8896 1.0000 1.3225 0.7561 2.1500 1.5209 0.6575 3.4725 0.5718 4.9934 1.7490 2.0114 0.4972 6.7424 0.4323 8.7537 0.3759 11.0688 2.3131 2.6800 3.0590 3.5179 0.3269 13.7268 0.2843 16.7858 4.0456 0.2472 20.3037 SAWNIN 2 3 4 5 67899 10 Equal Payment…Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two types of machines that would be appropriate are presently on the market. The company has determined the following: Machine A could be purchased for $54,000. It will last 10 years with annual maintenance costs of $1,700 per year. After 10 years the machine can be sold for $5,670. Machine B could be purchased for $45,000. It also will last 10 years and will require maintenance costs of $6,800 in year three, $8,500 in year six, and $10,200 in year eight. After 10 years, the machine will have no salvage value. Required: Assume an interest rate of 8% properly reflects the time value of money in this situation and that maintenance costs are paid at the end of each year. Ignore income tax considerations. Calculate the present value of Machine A & Machine B. Which machine Esquire should purchase?You are evaluating a potential purchase of several light - duty trucks. The initial cost of the trucks will be $194,000. The trucks fall in the MACRS 5-year class that allows depreciation of 20% the first year, 32% the second year, 19 % the third year, 12 % the fourth year, 11% the fifth year, and 6% the sixth year. You expect to sell the trucks for 29, 100 at the end of five years. The expected revenue associated with the trucks is $155,000 per year with annual operating costs of $81,000. The firm's marginal tax rate is 25.0% . What is the after - tax cash flow associated with the sale of the equipment? Group of answer choices $21, 825 $24, 735 $17, 460 $13,095 $7,275
