A Company has just invested in a new Machining Center that cost $150,000. The company believes that it will be able to use this new piece of equipment forthe next 10 years. At the end of this 10 year period, the company thinks that they can sell this equipment for $20,000. The company's MARR value is 10% ycy.(P/F %.n)(A/F %,n)(F/A %,n) (A/P %,n)(P/A %,100.38550.0627515.93740.162756.1446Question: Calculate the Annual Capital Recovery & Return Value (CR) for this new equipment. Please Fill the dollar amount in the answer window. (Forexample if your answer was $30,000; enter 30,000. If your answer was $-15,000; then enter -15,000)-23,157.5

Capital recovery is the equivalent annual amount that an asset must earn every year in order to recover the initial cost at the given rate of return over its useful expected life. Capital recovery=-PA/P,i%,n+SA/F,i%,nCapital recovery=-$150,000×0.16275+20,000×0.06275=-24,412.5+1255=-23,157.5

Business

Finance

A Company has just invested in a new Machining Center that cost $150,000. The company believes that it will be able to use this new piece of equipment for the next 10 years. At the end of this 10 year period, the company thinks that they can sell this equipment for $20,000. The company's MARR value is 10% ycy. (P/F% n) (AE %.n) (F/A %,n) (A/P %,n) (P/A %.n) 0.3855 0.06275 15.9374 0.16275 6.1446 Question: Calculate the Annual Capital Recovery & Return Value (CR) for this new equipment. Please Fill the dollar amount in the answer window. (For example if your answer was $30,000; enter 30,000. If your answer was $-15,000; then enter -15,000) -23,157.5

A Company has just invested in a new Machining Center that cost $150,000. The company believes that it will be able to use this new piece of equipment for the next 10 years. At the end of this 10 year period, the company thinks that they can sell this equipment for $20,000. The company's MARR value is 10% ycy. (P/F% n) (AE %.n) (F/A %,n) (A/P %,n) (P/A %.n) 0.3855 0.06275 15.9374 0.16275 6.1446 Question: Calculate the Annual Capital Recovery & Return Value (CR) for this new equipment. Please Fill the dollar amount in the answer window. (For example if your answer was $30,000; enter 30,000. If your answer was $-15,000; then enter -15,000) -23,157.5

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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A company is considering purchasing a new piece of equipment that costs $100,000 and has an estimated useful life of 5 years. The equipment should increase annual cash receipts by $80,000 per year. Cash expenses to operate the equipment should be $25,000. The company uses straight-line depreciation. If the after-tax cost of capital is 10% and the tax rate is (Round your 30%, the net present value of this project based on the tables in the appendix is $ answer to the nearest whole number.) Need help? Review these concept resources. Read About the Concept
Oriole Corporation is considering adding a new product line. The cost of the factory and equipment to produce this product is $1,700,000. Company management expects net cash flows from the sale of this product to be $630,000 in each of the next eight years. If Oriole uses a discount rate of 11 percent for projects like this, what is the net present value of this project? (Round intermediate calculations to 5 decimal places, e.g. 0.42354. Round answer to O decimal places, e.g. 52.25. Enter negative amounts using negative sign e.g. -45.25.) NPV $ 36695.55 What is the internal rate of return? (Round answer to 2 decimal places, e.g. 52.50.) Internal rate of return %
A manufacturer of video games develops a new game over two years. This costs $850,000 per year with one payment made immediately and the other at the end of two years. When the game is released, it is expected to make $1.20 million per year for three years after that. What is the net present value (NPV) of this decision if the cost of capital is 10%? OA. $1,462,112 OB. $1,005,202 OC. $913,820 OD. $1,736,258
Ilana Industries Incorporated needs a new lathe. It can buy a new high-speed lathe for $1 million. The lathe will cost $35,000 per year to run, but it will save the firm $125,000 in labor costs and will be useful for 10 years. Suppose that, for tax purposes, the lathe is entitled to 100% bonus depreciation. At the end of the 10 years, the lathe can be sold for $100,000. The discount rate is 8%, and the corporate tax rate is 21%. What is the NPV of buying the new lathe? Note: A negative amount should be indicated by a minus sign. Enter your answer in dollars not in millions. Do not round intermediate calculations. Round your answer to 2 decimal places.
Oriole Company is considering an investment that will return a lump sum of $820,000, 6 years from now. Click here to view the factor table 1. Table 2 Table 3 Table 4 What amount should Oriole Company pay for this investment to earn an 7% return? (For calculation purposes, use 5 decim displayed in the factor table provided, e.g. 5.24571. Round answer to 2 decimal places, e.g. 25.25.) Oriole Company should pay 4 $
15. A company purchases a piece of equipment for $15,000. After nine years, the salvage value is $900. The annual insurance cost is 5% of the purchase price, the electricity cost is $600/yr, and the maintenance and replacement parts cost is $120/yr. The effective annual interest rate is 10%. Neglecting taxes, what is most nearly the present worth of the equipment if it is expected to save the company $4500 per year? (A) $2300 (B) $2800 (C) $3200 (D) $3500
A company invested P100,000 to purchase a new equipment that wil We used to increase the profit but it is expected to be realized after two years from the year of purchase. The said profit was P50,000 per year for four years. Three years later, the company purchased an add-on to the machine worth P75,000. Due to that add on, the profit increased to P85,000 and lasted for five more years. If the company decided to sell that equipment for P8,000 and MARR is 15% per year
Esc You consider purchasing a new piece of equipment (7yr MACRS property) for your manufacturing process for $120,000. The equipment has a 6-year useful life and no salvage value. The equipment is expected to generate an additional $40,000 of net income before taxes and depreciation each year by using this upgraded system. The combined federal and state income tax rate= 35%. Annual inflation = 4%. a. Fill in the following table assuming MACRS depreciation rates Year 46°F Rain showers 0 1 F1 2 O 2 3 4 5 Pretax income 6 MACRS Taxable Depreciation income F2 - F3 + F4 Ⓡ b. If your MARR = 12%, should you purchase this system based on your real after-tax income? Why or why not? F5 8 C B Tax owed F6 Q Search G After tax income F7 Ca 7 F8 O Inflation adjustment factor O F9 ala LG F10 Real after tax income 0 A I THE F11 - 0 1 asod F12 + Prt Sc ScrLk Post-it sod Ins Post-it Del Backspace Post-it PgUp Home asod> Post-it Mumi 1-10 PgOn End Pause Break 11-15 11-15 C
Alpha company invested $10,000,000 in manufacturing equipment for producing small wastebaskets. If the company uses an interest rate of 15% per year, the amount of money it will have to earn each year to recover its investment in 7 years is closest to: Select one: a. $6,403,600 b. $4,403,600 c. $2,403,600 d. $9,403,600

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