The revenue from a manufacturing process (in millions of dollars per year) is prejected to follow the model R-130 for 10 years. Over the same period of time, the cost (in millions of dollars per year) is projected to follow the model C-50+ 0.2², where t is the time (in years). Approximate the profit over the 10-year period. (Round your answer to two decimal places) Need Help? Pet

The revenue from a manufacturing process (in millions of dollars per year) is prejected to follow the model R-130 for 10 years. Over the same period of time, the cost (in millions of dollars per year) is projected to follow the model C-50+ 0.2², where t is the time (in years). Approximate the profit over the 10-year period. (Round your answer to two decimal places) Need Help? Pet

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5PB: Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated...

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Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated revenue producing lite of 4 years. Mason has a required rate of return that is 12% and a cost of capital of 11%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?
An operation manager expects that the new machine will generate the following streams of income: Year 1- Ᵽ 13, 240.25; Year 2 - Ᵽ 15, 780; Year 3 - Ᵽ18, 990.95; Year 4 - Ᵽ21, 500.50; Year 5 - Ᵽ25,000.00. What is the present value of these future payments if the assumed interest rate is 3.7% ? If a new technology can reduce the future cost of production in 6 years at the following rate: Ᵽ8,550, Ᵽ10,200, Ᵽ13,600, Ᵽ 15,000, Ᵽ12,500, Ᵽ9000 what is present value of the future cost of production assuming that the interest is 6.33%? If the cost of the new technology in Item No. 2 is Ᵽ 52,435.60, what is the net present value? Should you buy or not the new technology?
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