3.An industrial firm is considering purchasing several programmable controllers and automating the company's manufacturing operations. It is estimated that the equipment will initially cost $120,000, and the labor to install it will cost $25,000. A service contract to maintain the equipment will cost $5,000 per year. Trained service personnel will have to be hired at an annual salary of $50,000. Also estimated is an approximate $10,000 annual income-tax savings (cash inflow). How much will this investment in equipment and services have to increase the annual revenues after taxes in order to break even? The equipment is estimated to have an operating life of 10 years with no salvage value (because of obsolescence). The firm's MARR is 12%. Ans. R= $90,662.70
3.An industrial firm is considering purchasing several programmable controllers and automating the company's manufacturing operations. It is estimated that the equipment will initially cost $120,000, and the labor to install it will cost $25,000. A service contract to maintain the equipment will cost $5,000 per year. Trained service personnel will have to be hired at an annual salary of $50,000. Also estimated is an approximate $10,000 annual income-tax savings (cash inflow). How much will this investment in equipment and services have to increase the annual revenues after taxes in order to break even? The equipment is estimated to have an operating life of 10 years with no salvage value (because of obsolescence). The firm's MARR is 12%. Ans. R= $90,662.70
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Good day! I need your help tutor please answer the question attached below. The answer is already provided, which means that will be your basis if your answers are correct or not.
Ps. In your solution, you identify the given and the what is being asked in the problem and I want to see the formula that you used and box your final answer. Don't give me a solution that is made in ms excel, I am not econ major so i'm asking for you to do the manual or the traditional computation.Lastly, don't give me a shortcut solution because i want to learn and study your computation :)
Pps. I want you to use the Present Worth Method,
Transcribed Image Text:3.An industrial firm is considering purchasing several programmable controllers and automating the company's
manufacturing operations. It is estimated that the equipment will initially cost $120,000, and the labor to install it will
cost $25,000. A service contract to maintain the equipment will cost $5,000 per year. Trained service personnel will have
to be hired at an annual salary of $50,000. Also estimated is an approximate $10,000 annual income-tax savings (cash
inflow). How much will this investment in equipment and services have to increase the annual revenues after taxes in
order to break even? The equipment is estimated to have an operating life of 10 years with no salvage value (because of
obsolescence). The firm's MARR is 12%. Ans. R= $90,662.70
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