If you give me wrong answer I will give you unhelpful rate A machine, which costs $100,000 when new, has a 15-year lifetime and a salvage value equal to 20% of itsoriginal value. Determine the capital recovery costs,based on an interest rate of 10% per year,compounded annually.a. $13,777b. $21,111c. $12,833d. $12,518

Step 1: Define Capital RecoveryCapital recovery is the difference between an asset's acquisition…

Answered: A machine, which costs $100,000 when…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section9.A: Depreciation

Problem 1P

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.1. An asset with a first cost of $20,000 has an annual operating cost of $12,000 and a $4000 salvage value after its 4-year life. Determine the capital recovery amount over the 4-year life if a MARR of 10% per year is required.
An asset costs $210,000 with a $30,000 salvage value at the end of its ten-year life. If annual cash inflows are $30,000, the cash payback period isa) 8 years.b) 7 years. c) 6years. d) 5 years.
An asset costs R6 300,000 with a R900,000 salvage value at the end of its ten-year life. If annual cash inflows are R900,000, the cash payback period is A. 8 years. B. 7 years. C. 6 years. D. 5 years.
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An investment of $20,000 for a new condenser is being considered. Estimated salvage value of the condenser is $5,000 at the end of an estimated life of 6 years. Annual income each year for the 6 years is $8,500. Annual operating expenses are $2,300. Assume money is worth 15% compounded annually. Determine the internal rate of return and whether or not the condenser should be purchased.
Please answer if you conform and give correct answer.
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Compute the present equivalent cost of a machine tool that costs $10,000 initially plus $500 for maintenance every year. The estimated life of the tool is twenty years and its estimated salvage value at that time is $3000. Interest rate is 12%. A) $13,400 B) $13,700 C) $15,000 D) $17,000
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a. A new operating system for an existing machine is expected to cost $837,000 and have a useful life of six years. The system yields an incremental after-tax income of $245,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $105,000. b. A machine costs $570,000, has a $58,000 salvage value, is expected to last eight years, and will generate an after-tax income of $155,000 per year after straight-line depreciation. Assume the company requires a 10% rate of return on its investments. Compute the net present value of each potential investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Complete this question by entering your answers in the tabs below. Required A Required B A new operating system for an existing machine is expected to cost $837,000 and have a useful life of six years. The system yields an incremental after-tax income of $245,000 each year after deducting its…
A project with the following costs are under consideration to determine its profitability. Using the IRR comparison, and an annual MARR of 10% compounded semiannually. determine if the project should be executed. First cost : $51,300 Semiannual operating cost : $10,000 Semiannual income : $20,000 : $20,,000 : 4 years Salvage value Life in years O a. IRR = 15% semiannual O b. IRR 15.83% semiannual O c. IRR 16.9% semiannual O d. IRR 18.7% semiannual
A piece of equipment has a first cost of $165,000, a maximum useful life of 7 years, and a market (salvage) value described by the relation S = 120,000 – 23.000k, where k is the number of years since it was purchased, The salvage value cannot go below zero. The AOC series is estimated using AOC = 60,000 + 12,000k. The interest rate is 13% per year. Determine the economic service life and the respective AW. The economic service life is 4 year(s) and the AW value is $ 100,000 a

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A machine, which costs $100,000 when new, has a 15- year lifetime and a salvage value equal to 20% of its original value. Determine the capital recovery costs, based on an interest rate of 10% per year, compounded annually. a. $13,777 b. $21,111 c. $12,833 d. $12,518