A company is considering buying a machine that costs $500,000, has a useful life of ten years, and is depreciated over its u years will be $40,000. This machine will replace an old machine that is fully depreciated; the old machine has a salvage valu annual incremental net operating income from this machine for each of the next ten years is (ignore income taxes):

Q: OCF analysis

A: Operating Cashflow Analysis  = Net Income + Depreciation and Amortization- Net Working capital

Q: Describe about the LIFO and FIFO method.

A:

Q: Define value chain.

A: Value Chain: Value Chain is the combination of activities including all the costs to do such…

Q: Describe WACC and its components.

A: WACC: The weighted average cost of capital (WACC) is a computation of   cost of capitalof a company…

Q: Explain NAREIT Index?

A: NAREIT Index Rate: It implies the compound dividend yield which is communicated as far as a yearly…

Q: What is data mining?

A:

Q: Define NRV method.

A: Definition:   Product costs: The costs incurred to acquire the merchandise, ship the stock, prepare…

Q: Explain an example of internal users.

A: Accounting: Accounting is a system, or a process of collecting and organizing economic transactions,…

Q: Define TED spread

A: The term TED spread stands for Treasury Euro Dollar Spread. It can be defined as the credit…

Q: Define value drivers

A: Introduction: Value drivers are related to concept of free cash flow valuation model. This helps the…

Q: What is the client-server model?

A: Client Server model: A client-server model can be defined as the architecture of distributed…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.