The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $59,000. The machine would replace an old piece of equipment that costs $15,000 per year to operate. The new machine would cost $7,000 per year to operate. The old machine currently in use is fully depreciated and could be sold now for a salvage value of $25,000. The new machine would have a useful life of 10 years with no salvage value.   Required: 1. What is the annual depreciation expense associated with the new bottling machine? 2. What is the annual incremental net operating income provided by the new bottling machine? 3. What is the amount of the initial investment associated with this project that should be used for calculating the simple rate of return? 4. What is the simple rate of return on the new bottling machine? (Round your answer to 1 decimal place i.e. 0.123 should be considered as 12.3%.)

You have been asked to evaluate the proposed acquisition of a new Machine for your company.  The machine’s basic price is $100,000.  Assume that the machine can be depreciated using straight line over three years.  The Machine would require an increase in net working capital (spare parts inventory) of $4,000 at the start of the project. This working capital will be recovered at Year 3.  The machine would have no effect on revenues, but it is expected to save the firm $40,000 per year in before tax operating costs. This machine will help the firm reduce its labor costs.  Assume that the firm’s marginal tax rate is 35%.  a) If the cost of capital (WACC) is 10% , should the machine be purchased? Show all your work in the attached excel file.  b) What is the minimum cost savings required to justify the purchase of this machine? Click here to get the Excel Template for this problem. (I attached a picture) Please upload your completed excel file.

Blossom Company is considering the purchase of a new machine. The invoice price of the machine is $151,000, freight charges are estimated to be $4,000, and installation costs are expected to be $6,000. The salvage value of the new equipment is expected to be zero after a useful life of 5 years. The company could retain the existing equipment and use it for an additional 5 years if it doesn't purchase the new machine. At that time, the equipment's salvage value would be zero. If Blossom purchases the new machine now, it would have to scrap the existing machine. Blossom's accountant, Donna Clark, has accumulated the following data for annual sales and expenses, with and without the new machine: 1. 2. 3. Without the new machine, Blossom can sell 13,000 units of product annually at a per-unit selling price of $100. If it purchases the new machine, the number of units produced and sold would increase by 10%, and the selling price would remain the same. The new machine is faster than the old…

A manufacturer is considering the replacement of one of its boring machines with a newer and more efficient one. The relevant details for both defender and challenger are as follows:• Defender: The current book value of the old boring machine is $50,000, and it has a remaining useful life of five years. The salvage value expected from scrapping the old machine at the end of five years is zero, but the company can sell the machine now to another firm in the industry for $10,000.• Challenger: The new boring machine can be purchased at a price of $150,000 and has an estimated useful life of seven years. It has an estimated salvage value of $50,000 and is expected to realize economic savings on electric power usage, labor, and repair costs and to reduce the amount of reworks. In total, annual savings of $80,000 will be realized if the new machine is installed.The firm uses an MARR of 12%. Using the opportunity-cost approach, address the following questions:(a) What is the initial cash…