6 A new machine costs $X. It will be used for Y years then sold for $Z. If interest is A%, what net yearly savings are needed to justify its cost? X= Y= Z= A= $45,000 25 years $25,000 8% Try Again
Q: Blue Run Snowboards makes snowboards. The company wants to add a new machine that would cost $80,000…
A: Present value of cash inflows = annual cash inflows x Present Value of Annuity of $1,10%, 5 years =…
Q: The makers of Lifestraw, a filter designed to allow the user to drink water safely from a stream,…
A: Present value is the present worth of any sum of money to be received in the future at a specified…
Q: Columbia Sheetmetal is thinking about purchasing a new machine that will have an expected life of 8…
A: The IRR is a measure of the profitability of a project. It signifies the maximum return for which…
Q: You have a project which pays $1,000 in year 1 and cash flows decline 2% in each subsequent year.…
A: The formula to find the PV of a declining perpetuity is as follows: PV0 = CF1r-g Where CF1 = cash…
Q: hat is the present value of $3,000 received a. 10 years from today if the interest rate is 4%…
A: Present value is the equivalent value of money today to be received in the future based on time and…
Q: Suppose yoU want to buy a new house. You currently have $15,000, and you figure you need to have a…
A: Cost of house is $150,000 Interest rate is 7.5% Current amount we have is $15000 Down payment 10%…
Q: Exercise #5: A digital printer costs $12,000. It can generate production savings of $4,000 for 5…
A: Net present value (NPV) is the difference between present value of all cash inflows and initial…
Q: Elijah Enterprises will need to upgrade the computer system in 8 years. They anticipate the upgrade…
A: Time = t = 8 YearsFuture Value = fv = $112,100Discount Rate = r = 11%
Q: Your firm has the option of marking an investment in softwarre that will cost $400,000 today but…
A: Investment cost = $ 400,000 Required return = 7%
Q: Elijah Enterprises will need to upgrade the computer system in 6 years. They anticipate the upgrade…
A: Present value:Present value refers to the current worth of a future sum of money or stream of cash…
Q: You are considering buying a new machine that costs $75,000. You think you will keep it for 5 years.…
A: Cost of the machine is the amount invested for purchase thus entity will be required $75,000 funds…
Q: The present worth of alternative X is $[ Alternative (Click to select) is selected by the company.…
A: Present worth of Alternative = First Cost + Present Value of the Maintenance cost per Year - Present…
Q: Compute the net present value (NPV) of this investment.
A: Meaning of Net present value It is the difference between present value of cash inflows and present…
Q: You purchase a machine. It costs $75,000 and will expand cash flow by $1,000 /month in year 1…
A: To Find: NPV IRR
Q: If you insulate your office for $13,000, you will save $1,300 a year in heating expenses. These…
A: NPV is also known as Net present value. It is a capital budgeting technique which helps in decision…
Q: . A new computer is to be purchased for a lab. It costs $3,000. The software this machine needs will…
A: A cash flow diagram is a visual representation of the flow of cash in and out of an investment or…
Q: Automating a process will cost $8000 now, but it will save $2200 annually for 5 years. The machinery…
A: Net present value method (NPV): Net present value method is the method which is used to compare the…
Q: Suppose that a new machine tool having a useful life of only one year costs $80,000. Suppose, also,…
A: Given, New machine cost = $80,000 Benefit from tool = $88,000
Q: A new heat exchanger will cost $220,000, and it will save $50,000 annually. After 10 years it will…
A: Cost of the new heat = 220000 Savings = 50000 annually Year term = 10 Interest rate = 10% Inflation…
Q: An industrialist is considering the purchase of a new machine for $50000. If purchased, the machine…
A: The question is related to the Capital Budgeting. The Net Present Value (NPV) is calculated with…
Q: A new electronic process monitor costs $ 990,000This cost could be depreciated at 30% per year…
A: To solve for the Net Present Value (NPV) of purchasing the new electronic process monitor, we'll…
Q: 3. Calculate the internal rate of return for a machine that costs $550,000 and provides annual…
A: IRR decision criteria facilitates financial analyst to arrive at best opinion after computing IRR.…
Q: Your company is eyeballing a new project in which they believe will cost $40,000 to start. They…
A: Time value of money :— According to this concept, value of money in present day is greater than the…
Q: uture Value solving for I Going back to the jeep problem, in 10 years, you'd like to have 200,000…
A: Solution Concept The present value can be taken to future value by compounding the amount with the…
Q: An energy efficiency project has a first cost of $400,000, a life of 10 years, and no salvage value.…
A: Present worth is the increased value of the firm from a prospective project. The present worth is…
Q: Rapir khe system if the software will save the company Php150000 per year for the next 5 years? Use…
A: The maximum amount that the company can afford to spend will be amount accumulated at the end of 5…
Q: Ignore income taxes in this problem.) Your Company is considering buying a new machine that would…
A: Maximum amount for the machine = annual cost savings x Present value factor (12%, 10 years)
Q: What is the IRR for installing a waste heat recovery system, given that the capital cost is…
A: Internal rate of return (IRR) of an alternative refers to the rate at which the Net present value…
Q: Elijah Enterprises will need to upgrade the computer system in 10 years. They anticipate the upgrade…
A: Yearly investments or payments refer to the periodic deposits that are made to fund future…
Q: What is the project's payback? Round your answer to two decimal places.
A: Given: Outflow = $55,000 Inflow = $10,000
Q: #34 Equivalent Annual Annuity Econo- Cool Air conditioners cost $300 to purchase, result in…
A: Part (1): Calculation of Equivalent annual cost of Econo-Cool model: Answer: Equivalent annual cost…
Q: #32 Equivalent Annual Annuity A precision lathe cost $10,000 and will cost $20,000 a year to…
A: The formula for computing equivalent annual cost (EAC):
Q: and scrap vai ted at 6 years and $4,00 O per day and maintenan tively, you can rent enor e of $130 a…
A: Maintaincence cost refers to the expenses involved in repairing or equipment or some part of the…
Q: Problem 1: You are considering the purchase of one of two machines used in your manufacturing plant.…
A: The concept of equivalent annual cost (EAC) is used for the purpose of making a choice between…
Q: next 2 years, respectively. Sketch a net present value profile for each of these projects. Which…
A: Net Present Value: It is the value of the project from the difference of the discounted cash flows…
Q: Assuming XYZ is willing to wait and risk not being able to acquire the building, how many years from…
A: Net Present Value (NPV) is a financial concept widely used in investment analysis and capital…
Q: You are thinking of building a new machine that will save you $4,000 in the first year, The machine…
A: Present value of savings = First year savings / (cost of capital - Growth)
Q: Elijah Enterprises will need to upgrade the computer system in 4 years. They anticipate the upgrade…
A: Time = t = 4 YearsFuture Value = fv = $105,300Discount Rate = r = 13%
Q: ah Enterprises will need to upgrade the computer system in 5 years. They anticipate the upgrade to…
A: The idea of future value is essential to many financial computations, such as retirement planning,…
![6 A new machine costs $X. It will be used for Y years then sold for $Z.
If interest is A%, what net yearly savings are needed to justify its cost?
X=
Y=
Z=
A=
$45,000
25 years
$25,000
8%
Try Again](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fda56eb86-e94a-4ed4-87fe-c588c4002e64%2Fb75e6029-3775-411e-89bd-c4232ba01183%2Fjdw0o0f_processed.jpeg&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
- 3. A shop installs an oil collection system to reduce waste. The collector installed has an initial cost of $2,500 and results in annual savings of $500. If the expected lifetime of the collector is 5 years and the relevant annual interest rate is 10%, what is most nearly the Net Present Value of this system? (Hint: NPV = PV of Cash In - PV of Cash Out)3. Schultz Company is considering purchasing a machine that would cost $478,800 and have a useful life of 5 years. The machine would reduce cash operating costs by $114,000 per year. The machine would have a salvage value of $6,200. Schultz Company prefers a payback period of 3.5 years or less.Required: a. Compute the payback period for the machine. What does this mean? b. Compute the return on average investment (ROI)Question 5 An investment of $50,000 is made to purchase machinery that will allow us to manufacture a new product. The annual expenses to make the product are (5,000 + 5x) and the revenues from the product are 30 x, where x = the number of products sold each year. How many products must be sold per year, x, to break even? Consider a 7 year project life and an MARR of 12%.
- 222b. Suppose you were considering purchasing a $6300 machine today that would generate additional net profit of $2500 booked at the end of each year. Assuming you need a 10 percent annual return to justify the investment, would the investment be worth doing if you had only three years of payouts? Would your answer change if you only needed a 9 percent annual return on your investment ? Why or why not? You must use present value to demonstrate your answer, and show your work.Elijah Enterprises will need to upgrade the computer system in 6 years. They anticipate the upgrade to cost $95,300. If the discount rate is 15%, what will be the required yearly investment needed to obtain the money for the upgrade?Round your (1+R)^n value to 2 decimal places and use that number for your final amount required rounded to the nearest dollar. Future Value / (1+R)^n = Amount Required / = What would be required if the discount rate was 8%? Future Value / (1+R)^n = Amount Required / =Suppose you were considering purchasing a $5000 machine today that would generate additional net profit of $2000 booked at the end of each year. Assuming you need a 15 percent return to justify the investment, would the investment be worth doing if you had only three years of payouts? Would your answer change if you had four years of $2000 payouts? Why or why not?
- #34 to decide is you and trying of investment are worth while, compare Alternative: A > Incremental analysis (Alternative B соmраnу More than 2 alternatives if the additional increment pairs B wins then B vs C C A MARR Company at considering 2 different machines at 12% Both life spons = 10 years м/с X м/с у Initial Cost 160000 285000 Annual Operating Cost 45000 45000 Benefits per year. Salvage 90000 105000 Value 20000 40000Spending $1,500 more today for a hybrid engine rather than a gasoline engine will result in annual fuel savings of $300. How many years must this savings continue in order to justify the extra investment if money is worth 10% per year, compounded annually?PQR, Inc., is considering investing $160,000 in a machine that may last 4 years with no residual value. The new machine will generate annual operating income of $60,000 per year for 4 years. What is the Simple rate of return? OA. 12.5% B. 10.5% O C. 14% OD. 15.66%
- You are thinking of buildinga new machine that will save you $5,000 in the first year. The machine will then begin to wear out so that the savings decline at a rate of 1% per year forever. What is the present value of the savings if the interest rate is 6% per year? The present value of the savings is $. (Round to the nearest dollar.) -12.. Ereen Sho 529.00 O Time Remaining: 00:25:34 Next etv DD DIL 80 888 FR F7 F6 F5 F4 esc F2 F3 & 2$ % @ #3 7 8. 2 3 4 P Y U W E R QView Policies Current Attempt in Progress You are starting a family pizza parlor and need to buy a motorcycle for delivery orders. You have two models in mind. Model A costs $8,000 and is expected to run for 6 years; Model B is more expensive, with a price of $13,000, and has an expected life of 9 years. The annual maintenance costs are $760 for Model A and $600 for Model B. Assume that the opportunity cost of capital is 9 percent. Calculate equivalent annual costs (EAC) of each models. (Do not round the discount factor. Round intermediate calculations and final answers to 2 decimal places, eg. 15.25.) EAC of Model Ai EAC of Model B is $ You should buy $ Which one should you buy? eTextbook and Media Attempts: 0 of 2 used Submit Apne1. Show your solutions completely. The ABC Freight Company has invested USD80,000 in a new sorting machine that is expected to produce a return of USD9,000 per year for the next 10 years. a.) At a 9% annual interest rate, is this investment worthwhile? b.) If the new machine was not purchased and the amount of USD80,000 was invested in another business that would give a 10% interest rate, what would be the equivalent future amount at the end of 10 years? Mr. Mason wants to open an account in a bank with a 3% interest rate, so he can withdraw after the 25th year the amount of USD4,500 each year for 5 years. a.) How much should he deposit now? b.) should he decide not to withdraw any amount after 25 years, and instead withdraw the whole amount at the end of the 30th year, how much can he withdraw assuming that the interest rate is uniform? c. If Mr. Mason wishes to withdraw the amount of USD4,500 each year for 5 years, beginning at the end of the first year after the making the initial…
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)