Please provide Detailed solutions Under current pandemic conditions, a Huwan wet market must install a new pangolin disinfector, and hasto choose from two made-in-Mamoral brands with different initial and operating costs. The dispenser ineach option needs replacing at regular intervals. Huwan demands a 9% annual interest rate to analysesuch investments. Determine the capitalised cost (i.e. the present cost of purchase, operation andreplacement in perpetuity) using the information in the table.Disinfector 1 Disinfector 2Disinfector purchase cost, $ 350210Dispenser cost, $3584Annual operating costs, $3556Dispenser life, years4Disinfector service life, years 1212Salvage value, $3535

Firstly Annual value is calculated for each items in both Disinfector 1 and 2 and then their…

Answered: Under current pandemic conditions, a…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 10PA: The Ham and Egg Restaurant is considering an investment in a new oven that has a cost of $60,000,...

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Assume that a company is considering purchasing a machine for $50,500 that will have a five-year useful life and no salvage value. The machine will lower operating costs by $17,000 per year. The company's required rate of return is 18%. The profitability index for this investment is closest to: Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. Multiple Choice O 0.95. 1.01. 1.05. 1.11.
The management of East Manufacturing needs a new high tech sorting machine and has two different proposals under consideration. They require a rate of return of 10% (discount rate) and the Accounting Department has prepared the following information: Initial Investment Useful Life of Equipment Net Annual Cash Flow Salvage Value Investment B: Click to open:↓ Ⓡ Clearly label and show calculations for full credit! No calculations = No credit. 1) Calculate the Payback Period for each option: Investment A: 2) Calculate the Net Present Value of each option: Investment A: $ 3,700,000 7 years $ 900,000 $0 Investment B: A $3,400,000 7 years $800,000 $90,000 B
The Atlantic Medical Clinic can purchase a new computer system that will save $6,000 annually in billing costs. The computer system will last for seven years and have no salvage value. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: What is the maximum price (i.e., the price that exactly equals the present value of the annual savings in billing costs) that the Atlantic Medical Clinic should be willing to pay for the new computer system if the clinic’s required rate of return is: (Round your final answer to the nearest whole dollar amount.) Maximum Price 1. Seven percent 2. Nine percent
The management of Penfold Corporation is considering the purchase of a machine that would cost $390,000, would last for 7 years, and would have no salvage value. The machine would reduce labor and other costs by $74,000 per year. The company requires a minimum pretax return of 12% on all investment projects. Click here to view Exhibit 7B-1 and Exhibit 7B-2 to determine the appropriate discount factor(s) using the tables provided. The net present value of the proposed project is closest to (Ignore income taxes.): (Round your intermediate calculations and final answer to the nearest whole dollar amount.)
Parker Hannifin of Cleveland, Ohio manufactures CNG fuel dispensers. It needs replacement equipment to streamline one of its production lines for a new contract, but plans to sell the equipment at or before its expected life is reached at an estimated market value for used equipment. Select between the two options using the corporate MARR of 15% per year and a future worth analysis for the expected use period. Also, write the FV spreadsheet functions that will display the correct future worth values. Option D E First cost, $ −62,000 −77,000 AOC, $ per year −15,000 −21,000 Expected market value, $ 8,000 10,000 Expected use, years 3 6
Octavia Bakery is planning to purchase one of two ovens. The expected cash flows for each oven are shown below. MARR is 8%/year. Solve, a. What is the discounted payback period for each investment? b. Which oven should Octavia Bakery purchase if they wish to minimize the DPBP?
Management of Carla Vista Mints, a confectioner, is considering purchasing a new jelly bean-making machine at a cost of $312,50O. They project that the cash flows from this investment will be $ 90,000 for the next seven years. If the appropriate discount rate is 14 percent, what is the NPV for the project? (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525.) NPV %24
Gondoko Manufacturing is considering purchasing two machines. Each machine costs P90,000 and will produce cash flows as follows: End of Year Machine B A 1 P 50,000 P 10,000 2 40,000 20,000 3 20,000 110,000 Turk Manufacturing uses the net present value method to make the decision, and it requires a 15% annual return on its investments. Which machine should Turk purchase? Group of answer choices Neither machine is acceptable. Only Machine B is acceptable. Both machines are acceptable, but A should be selected because it has the greater net present value. Both machines are acceptable, but B should be selected because it has the greater net present value. Only Machine A is acceptable.
A firm urgently needs a large printer and will either lease a printer at an end-of-year cost of $ 5000 for a 6 year period, or they will purchase the printer at an initial cost of $50,000. If purchased, the printer will have a zero salvage value at the end of 6- years life. No other costs are to be considered. MARR is 4%. What is the best investment decision on the basis of the internal rate of return. O a. IRR could not be calculated due to no change in cashflow sign Ob. Negative IRR is not justified and is not applied here to make a proper decision C. Lease o d. Buy
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The management of Kunkel Company is considering the purchase ofa $20,000 machine that would reduce operating costs by $5,000 per year. At the end of the machine's five-year useful life, it will have zero sallvage value. The company's required rate of return is 13%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table. Required: 1. Determine the net present value of the investment in the machine. 2 What is the difference between the total, undiscounted cash inflows and cash outflows over the entire life of the machine? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the net present value of the investment in the machine. (Negative amount should be indicated by a minus sign. Use the appropriate table to determine the discount factor(s). Round your final answer to the nearest whole dollar amount.) Net present value Prev 1 of 2 ere to search F4 F5 F7 F12 81 Coca V. 24 ) 4. 9. 7.…
The Atlantic Medical Clinic can purchase a new computer system that will save $7,000 annually in billing costs. The computer system will last for nine years and have no salvage value. Required: What is the maximum price (i.e., the price that exactly equals the present value of the annual savings in billing costs) that the Atlantic Medical Clinic should be willing to pay for the new computer system if the clinic's required rate of return is: (Round your final answer to the nearest whole dollar amount.) Maximum Price 1. Seven percent $ 49,164 2. Eleven percent $ 34,198

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