Attached is questions diagram, USE EXCEL AS ITS REQUIREDQuestion 10. Using the replacement chain method (machine B can be replaced with an identical machine at the end of year 3), determine which project should be adopted after tax. Pick the correct answer.Machine AMachine BEither machineNeither machine A firm is trying to choose between two machines to manufacture a new line of office furniture. The financial data for each machine have been compiled as follows:Machine AMachine BInitial investment required$20,000$12,000Service lifeб уеars3 yearsSalvage value$5,000$3,000Annual operating expenses$4,000$2,500Annual operating revenue$15,000$12,500Depreciation method5-year MACRS5-year MACRSThe firm's marginal tax rate is 40% and uses a 15% discount rate to value the projects. Also, assume that the required service period is indefinite.

Machine A Annual operating revenue=$15000 Annual operating expense=$4000 Annual savings= $11000…

Attached is questions diagram, USE EXCEL AS ITS REQUIRED Question 10. Using the replacement chain method (machine B can be replaced with an identical machine at the end of year 3), determine which project should be adopted after tax. Pick the correct answer. Machine A Machine B Either machine Neither machine

Attached is questions diagram, USE EXCEL AS ITS REQUIRED Question 10. Using the replacement chain method (machine B can be replaced with an identical machine at the end of year 3), determine which project should be adopted after tax. Pick the correct answer. Machine A Machine B Either machine Neither machine

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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According to replacement analysis, determine the number of years that the defender should be used before replacement. Defender Challenger Year, TC EUAC TC EUAC 1 9,000 9,000 9,000 9,000 2 8,000 8,519 5,500 7,317 Scenario 3 6,000 7,743 6,500 7,066 4 5,000 7,134 8,000 7.273 5. 5,000 6,771 11,000 7,908 Your answer: Use defender: 5 years than replace with the challenger Use defender: 4 years than replace with the challenger O Use defender: 3 years than replace with the challenger Use defender: 2 years than replace with the challenger O Use defender: 1 year than replace with the challenger O Use defender: 0 year than replace with the challenger
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Project A and Project B are independent projects. Investment life of Project A is 4 years and investment life of Project B is 17 years. Project A's NPV is $375 and Project B's NPV is $1,743. EANPV of project A is $102 and EANPV of project B is $96. Which of the following decision is correct? O a. Select both projects because both have positive NPVs. O b. Select Project A because it has a shorter investment life O c. Select Project B because it has a longer investment life Od. Select Project A because it has a higher EANPV O e. Select Project B because it has a higher NPV
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x E My Home CengageNOWv2 |Online teachir x+ now.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inpro. ta o 伯 Determine the average rate of return for a project that is estimated to yield total income of $250,000 over 4 years, costs $480,000, and has a $20,000 residual value. Next Previous Submit Test for Grading
Novell, Inc., has the following mutually exclusive projects. Year Project A Project B 0 $27,000 $30,000 1 15,500 2 12,000 3 3,600 16,500 10,500 12,000 a-1. Calculate the payback period for each project. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Project A Project B 1.958 years 2.250 years a-2. If the company's payback period is two years, which, if either, of these projects should be chosen? Project A Project B
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Can please get help with practice question 5.6 with a quick explaination of how? Required information Skip to question [The following information applies to the questions displayed below.] On January 1, Mitzu Company pays a lump-sum amount of $2,650,000 for land, Building 1, Building 2, and Land Improvements 1. Building 1 has no value and will be demolished. Building 2 will be an office and is appraised at $780,000, with a useful life of 20 years and a $75,000 salvage value. Land Improvements 1 is valued at $360,000 and is expected to last another 12 years with no salvage value. The land is valued at $1,860,000. The company also incurs the following additional costs. Cost to demolish Building 1 $ 348,400 Cost of additional land grading 195,400 Cost to construct Building 3, having a useful life of 25 years and a $398,000 salvage value 2,242,000 Cost of new Land Improvements 2, having a 20-year useful life and no salvage value 168,000 Required: 1. Allocate the…
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