Calculate the net present value and profitability index of each machine. Assume a 9% discount rate. Which machine should be purchased?

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A:

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A: 1. Calculation of Net present Value   YEAR AMOUNT P.V FACTOR PRESENT VALUE         0 25,000 1…

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A: Given in the question:Machine Cost = $102,990Life of Machine = 05 YearsSalvage Value = $0Net Cash…

Q: BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it…

A: NPV means Net present value.It is computed by deducting initial investment from present value of…

Q: A business firm is contemplating to purchase new equipment. The purchase price is 60,000 and its…

A: The question pertains to the concept of capital budgeting tools and time value of money and has been…

Q: Machine M Machine N $ 25,000 5 years $3,000 $10,000 $3,500 Initial Cost $25,000 4 years $4,000…

A: Present worth is the present value of all cost and revenue and cash flow from the machine…

Q: p=.30 p=.30 First cost $40,000  $40,000  $40,000  Annual savings 2,000 5,000 8,000 Annual…

A: The machine has an 8-year lifespan.The MARR for the firm is 7%. Find out the machine's NPW.

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A: Costs are the expenses incurred by a business, an individual, or society in the production or…

Q: BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it…

A: Net present value is computed as = Present value of cash inflows - Initial Investment Profitability…

Q: Sandhill Corp. is considering purchasing one of two new diagnostic machines. Either machine would…

A: Net present value method : It is defined as the difference between the present value of cash inflows…

Q: Dexter Inc. is considering replacing its existing computer system with a new computer system. The…

A: Answer - No do not replace, additional costs of $3,500. Working In the existing computer system…

Q: Calculate the het present value and profitability index of each machine. Assume a 9% discount rate.…

A: NET PRESENT VALUENet Present Value is one of the Important Capital Budgeting Techniques. Net Present…

Q: Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash…

A: Net present value(NPV) is the difference between present value of all cash inflows and initial…

Q: Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking…

A: Net Present Value=Present Value of Cash Inflows-Present Value of Cash Outflows

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A: A replacement decision is a kind of managerial decision that the top-level management with the aim…

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Q: Sala Co. is contemplating the replacement of an old machine with a new one. The following…

A: Savings in variable cost = (Annual operating costs of old machine - Annual operating costs of new…

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A: Net Present Value (NPV) is a Capital Budgeting technique in which discounted value of cash flows…

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A: Data given:Salvage value of fully depreciated machine= $10,000Cost of new machine= $60,000Useful…

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A: Since machine B is selected then working is restricked to Machine B only. Present Value of Machine =…

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A:

Q: it which they use to preserve their goods. Pertinent data are given below.…

A: In this we need to calculate the equivalent annual cost and project having minimum annual cost…

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A: NPV ( Net Present Value) is a method that is used to assess an investment's profitability by…

Q: Crane Corp. is considering purchasing one of two new diagnostic machines. Either machine would make…

A: Machine B:Original cost (Initial Cost) = $186,000Estimated annual cash inflows (CFt) =…

Q: Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking…

A: The net present value is the measure of profitability in which we add up the discounted cash…

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A: Relevant cost in management The term relevant cost really matters. The relevant cost is the cost…

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A: A method of capital budgeting that helps to evaluate the present worth of cash flow and a series of…

Q: Calculate the net present value assuming a 15% rate of return. (Ignore income taxes.) (If the net…

A: Capital Budgeting is a financial process used by organizations to evaluate and select long-term…

Q: • Purchase price $4,100,000 • Cost to bring boat to production facility $29,000 • Yearly insurance…

A: Costs that are incurred to put the boat into a capacity to use are capitalized. Other costs incurred…

Q: Blaylock Company wants to buy a numerically controlled (NC) machine to be used in producing…

A: Net annual cash inflows = Cash Revenues - Cash Expenses = $1,500,000 - $1,300,000 = $200,000

Q: Existing Machine New Machine Purchase cost (new) $ 15,000 $ 26,000 Remaining book value $ 6,000…

A: To calculate the financial advantage of replacing the existing machine with a new machine, we shall…

Q: Ahmed Corporation is considering replacing a machine that is presently used in its production…

A: Relevant cost is the cost that is considered while making a decision for the business operation of…

Q: Henrie's Drapery Service is investigating the purchase of a new machine for cleaning and blocking…

A: Net present value (NPV) is the difference between the current value of cash and the future worth of…

Q: Sheridan Corp. is considering purchasing one of two new diagnostic machines. Either machine would…

A: This pertains to capital budgeting. Both NPV and profitability index are capital budgeting tools.

Q: Wizard Company has an old machine that is fully depreciated but has a current salvage value of…

A: Data given:Salvage value of fully depreciated machine= $10,000Cost of new machine= $60,000Useful…

Q: Sandhill Corp. is considering purchasing one of two new diagnostic machines. Either machine would…

A: NPV stands for Net Present Value. NPV is the difference between the present value of the future cash…

Q: Calculate the net present value and profitability index of each machine. Assume a 9% discount rate.…

A: NET PRESENT VALUE Net Present Value is one of the Important Capital Budgeting Technique.  Net…

Q: Calculate the net present value and profitability index of each machine. Assume a 10% discount rate.…

A: Net present value is the difference between present value of cash inflows and present value of cash…

Q: An oil company is planning to install a new pipeline to connect storage tanks to a processing plant…

A: Capitalized costs arise when a fixed asset is purchased. These expenses are recognized in the form…