Calculate the present worth of all costs for a newly acquired machine with an initial cost of $32,000, no trade-in value, a life of 14 and an annual operating cost of $17,000 for the first 3 years, increasing by 10% per year thereafter. Use an interest rate of 10% per year. years, The present worth of all costs for a newly acquired machine is determined to be $ [

Calculate the present worth of all costs for a newly acquired machine with an initial cost of $32,000, no trade-in value, a life of 14 and an annual operating cost of $17,000 for the first 3 years, increasing by 10% per year thereafter. Use an interest rate of 10% per year. years, The present worth of all costs for a newly acquired machine is determined to be $ [

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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Question

Calculate the present worth of all costs for a newly acquired machine with an initial cost of $32,000, no trade-in value, a life of 14 years,
and an annual operating cost of $17,000 for the first 3 years, increasing by 10% per year thereafter. Use an interest rate of 10% per year.
The present worth of all costs for a newly acquired machine is determined to be $ [

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The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Operating Net Cash Year Income Flow 1 $18,750 $93,750 2 18,750 93,750 3 18,750 93,750 4 18,750 93,750 5 18,750 93,750 The cash payback period for this investment a. 4 years Xb. 3 years c. 5 years d. 20 years
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With the estimates shown below, Sarah needs to determine the trade-in (replacement) value of machine X that will render its AW equal to that of machine Y at an interest rate of 8% per year. Determine the replacement value. Machine X Machine Y 90,000 Market Value, S -40,000 for year 1,increasing by 2000 per year thereafter. 24,000 Annual Cost, $ per Year -59,500 Salvage Value Life, Years 19,500 The replacement value is $
The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Year 1 2 $18,750 18,750 18,750 18,750 18,750 The average rate of return for this investment 3 4 Operating Income 5 Net Cash Flow $93,750 93,750 93,750 93,750 93,750