Austin General Hospital is evaluating new lab equip- ment. The interest rate is 12% and in each case the equipment's useful life is 5 years. Use NPW analysis to pick which company you should purchase from. Company A First cost D&M costs Annual benefit Salvage value $13,500 $20,000 $15,000 1,500 1,800 1,100 9,500 11,000 9,000 3,500 6,000 4,000

Austin General Hospital is evaluating new lab equip- ment. The interest rate is 12% and in each case the equipment's useful life is 5 years. Use NPW analysis to pick which company you should purchase from. Company A First cost D&M costs Annual benefit Salvage value $13,500 $20,000 $15,000 1,500 1,800 1,100 9,500 11,000 9,000 3,500 6,000 4,000

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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Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $491,000 cost with an expected four-year life and a $20,000 salvage value. Additional annual information for this new product line follows. (PV of $1. EV of $1. PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Required: 1. Determine income and net cash flow for each year of this machine's life. 2. Compute this machine's payback period, assuming that cash flows occur evenly throughout each year. 3. Compute net present value for this machine using a discount rate of 7%. $ 1,990,000 1,509,000 117,750 162,000 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute net present value…
BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isn't equipped to do. Estimates regarding each machine are provided below. Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows Net present value. Machine A $76,600 Profitability index 8 years Which machine should be purchased? $19,900 $4,890 Machine A 0 Click here to view the factor table. Calculate the net present value and profitability index of each machine. Assume a 9% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg-45 or parentheses eg (45). Round answer for present value to 0 decimal places, e.g. 125 and profitability index to 2 decimal places, e.g. 10.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) should be purchased. Machine B $179,000 8 years 0 $40,400 $9,940 Machine…
D-76 A new chemical remediation tank is needed. C'urrent lechnology tanks, which cost $150,000, musI Ie drained and treated every 2 years at a cost of $30,000; the tanks will last 10 years, and ench will have a salvage value of 5% of first cost. A tank with new technology has just come on the market. T'hore are no periodic maintenance costs, and a tank will last 20 years. If the new tanks cost $325,000, what minimum salvage value, as a percentage of lirst cont, would be required for this technology to be a betler option? Use a 12% interest rate. (a) 10% (b) 36% (c) 57% (d) 72%
Tippy Toe Spa Company offers various services, such facials, laser hair removal and microdermabrasion. Currently, the company is considering purchasing the following spa equipment: Laser Hair Removal Machines Microdermabrasion Machines Facial Oxygen Units $64,500 $27,000 $126,400 $37,800 $91,400 $27,200 11% Cost per Machine Annual Cash Inflow Annual Cash Outflow Required Rate of Return Useful Life Residual Value 4 years $890 $29,700 $212,200 $197,900 14% 3 years $890 Laser Hair Removal Machine: Answer Years Microdermabrasion Machine: Answer Years Facial Oxygen Unit: Answer Years 7% Assume that each equipment's annual cash flow will occur for the period equal to its useful life. Do not enter dollar signs or commas in the input boxes. Use the present values tables in the textbook appendix. Use the negative sign for negative values. Round your answers to the nearest whole number. a) Determine the NPV of each piece of equipment. Laser Hair Removal Machine: $Answer Microdermabrasion…
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1- Which Project will be selected? 2- please attach your handwritten answer.

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