Crane Inc. wants to purchase a new machine for $40,700, excluding $1,500 of installation costs. The old machine was purchased 5years ago and had an expected economic life of 10 years with no salvage value. The old machine has a book value of $2,300, and CraneInc. expects to sell it for that amount. The new machine will decrease operating costs by $9,700 each year of its economic life. Thestraight-line depreciation method will be used for the new machine for a 6-year period with no salvage value.Click here to view the factor table.(a)Determine the cash payback period. (Round cash payback period to 2 decimal places, e.g. 10.53.)Cash payback period(b)Determine the approximate internal rate of return. (Round answer to 0 decimal places, e.g. 13%. For calculation purposes, use 5 decimalplaces as displayed in the factor table provided.)Internal rate of return(c)yearsThe investmentAssuming the company has a required rate of return of 10%, determine whether the new machine should be purchased.be accepted.%

The objective of the question is to evaluate the financial feasibility of purchasing a new machine…

Answered: Crane Inc. wants to purchase a new…

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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Sheep Ranch Golf Academy is evaluating new golf practice equipment. The "Dimple- Max" equipment costs $137,000, has a 4-year life, and costs $10,600 per year to operate. The relevant discount rate is 9 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $10,100 at the end of the project's life, The relevant tax rate is 23 percent. All cash flows occur at the end of the year. What is the equivalent annual cost (EAC) of this equipment? (A negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. $ 40,871.52 X EAC
Please do not give solution in image format ? And Explain Proper Step by Step.
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Paymore Products places orders for goods equal to 75% of its sales forecast in the next quarter. The sales forecasts for the next five quarters are as follows: Following Year First Quarter Quarter in Coming Year First Second Third Fourth Sales forecast $460 $334 $351 $399 $399 On average, one-third of sales are collected in the quarter that they are sold, and two-thirds are collected in the following quarter. Assume that sales in the last quarter of the previous year were $351. What is the forecast for Paymore's cash receipts in each quarter of the coming year? (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Quarter Collections 1 3 4
There is old machinery with a value of $95,565, with an expected life of 20 years. There is a sale of old equipment with a book value of $30,000 and a market value of $66,000.It is intended to replace that machine with a new one worth $145,000 with a useful life of 10 years. It will ultimately be sold at market value for $90,000, to generate salvage value.Old operating costs are $95,565 and new costs are $56,984. There is an initial working capital of $35,000, with movements of 15% of the initial working capital untilyear 6. From year 7 and 8 they are 20% of the initial working capital and in the ninth year 14% of the initial working capital.The WACC required for this project is 17% with a tax rate of 38.5%. The following table shows the depreciation of the new equipment.Depreciation1 20%2 15%3 15%4 10%5 10%6 10%7 7%8 5%9 5%10 3%Calculate your PV, NPV, IRR, TIRM, PAYBACK, IR and ROIPlease if you can send me the excel to: 0229275@up.edu.mxor tell me the steps to follow and if you can…
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Which values am I supposed to use for the depreciation?
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