A company has decided to buy a new machine. Two alternatives, A and B, are considered with thefollowing data. Find the incremental rate of return between A and B.ABCost new$850,000$980,000Annual O&M Cost$50,000/yr$45,000/yrSalvage value$180,000$300,000Annual income$230,000/yr$240,000/yrEstimated life (yr)1010

Incremental rate of return is a capital budgeting technique that gives the return of a potential…

A company has decided to buy a new machine. Two alternatives, A and B, are considered with the following data. Find the incremental rate of return between A and B. Cost new $850,000 $980,000 Annual O&M Cost $50,000/yr $45,000/yr Salvage value $180,000 $300,000 Annual income $230,000/yr $240,000/yr Estimated life (yr) 10 10

A company has decided to buy a new machine. Two alternatives, A and B, are considered with the following data. Find the incremental rate of return between A and B. Cost new $850,000 $980,000 Annual O&M Cost $50,000/yr $45,000/yr Salvage value $180,000 $300,000 Annual income $230,000/yr $240,000/yr Estimated life (yr) 10 10

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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Two alternative machines will produce the same product, but one is capable of higher-quality work, which can be expected to return greater revenue. The following are relevant data: Determine which is the better alternative, assuming using straight-line depreciation method, an income tax rate of 40% and an after-tax MARR of 10%.
For the below ME alternatives, which machine should be selected based on the AW analysis. MARR=10% First cost, $ Annual cost, $/year Salvage value, $ Life, years Machine A 15000 B- AW for machine B= 8,342 4,000 Answer the below questions : Machine B 6 20,447 6,000 5,000 Machine C 10000 4,000 1,000
Please answer net present value and profitability index:
Consider two air-conditioning systems with the cash flow estimates as given below. Use AW analysis to determine the sensitivity of the economic decision to MARR values of 4%, 6%, and 8% per year. Air-Conditioning System 1 System First cost, $ AOC, $ per year Salvage value, $ New compressor and motor cost at midlife, $ Life, years -10,000 -500 -100 -1,850 8 The annual worth of air-conditioning system 1 when the MARR is 4% is $ The annual worth of air-conditioning system 2 when the MARR is 4% is $ The annual worth of air-conditioning system 1 when the MARR is 6% is $ The annual worth of air-conditioning system 2 when the MARR is 6% is $ The annual worth of air-conditioning system 1 when the MARR is 8% is $ The annual worth of air-conditioning system 2 when the MARR is 8% is $ Air-Conditioning System 2 -14,000 -85 -300 -2,540 12
Given the two machines' data Machine A Machine B First Cost P8,000.00 P14,000.00 Salvage value Annual operation 2,000.00 3,000.00 2,400.00 Annual maintenance 1,200.00 1,000.00 Taxes and insurance 3% 3% Life, years 10 15 Money is worth at least 16%. What is the exact rate of return?
What is the present worth equivalent of the machine considered to be the most preferred choice? (i=10%) show detailed solution
The Fence Company is setting up a new production line to create top rails. The relevant data for two alternatives are shown below. Flow Line Manufacturing Cell Installed Cost Expected Life Salvage Value Variable Cost per Top Rail Click here to access the TVM Factor Table Calculator $15,000 5 years $0 $6.00 $10,000 5 years $0 $7.00
Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company requires a 6% return from its investments. $ (260,000) 150,000 146,000 117,000 Initial investment Net cash flows: Year 1 Year 2 Year 3 Compute this machine's net present value. (PV of $1. EV of $1. PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.) Year 1 Year 2 Year 3 Totals Initial investment Net present value Net Cash Flow $ 0 Present Value Factor Present Value of Net Cash Flows $ $ 0
Subject;
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As an engineer, you have been asked to recommend a new cooling system for a large warehouse. You have narrowed it down to three different systems with the associated costs shown below If the minimum attractive rate of return in 10%, which system would you recommend. Cooling system A В C $250,000 $75,000 $300,000 $60,000 $36,000 $375,000 $80,000 $45,000 9 years Installation costs Annual operating costs Salvage value Lifespan None 5 years 7 years
hi, could u explain how to solve plan B thx

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