Current Attempt in Progress Bridgeport Hammocks is considering the purchase of a new weaving machine to prepare fabric for its hammocks. The machine undes consideration costs $67,100 and will save the company $10,000 in direct labor costs. It is expected to last 10 years. Click here to view the factor table. (a) Calculate the internal rate of return on the weaving machine. (Round answer to 0 decimal place, e.g. 15.) Internal rate of return %

Current Attempt in Progress Bridgeport Hammocks is considering the purchase of a new weaving machine to prepare fabric for its hammocks. The machine undes consideration costs $67,100 and will save the company $10,000 in direct labor costs. It is expected to last 10 years. Click here to view the factor table. (a) Calculate the internal rate of return on the weaving machine. (Round answer to 0 decimal place, e.g. 15.) Internal rate of return %

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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Average Rate of Return—Cost Savings Maui Fabricators Inc. is considering an investment in equipment that will replace direct labor. The equipment has a cost of $140,000 with a $12,000 residual value and a ten-year life. The equipment will replace one employee who has an average wage of $29,460 per year. In addition, the equipment will have operating and energy costs of $6,780 per year. Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment. If required, round to the nearest whole percent.fill in the blank 1 %
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A 3 year-old a computer-controlled fabric cutting machine, which had a $25,000 purchasing price, has a current market (trade-in) value of $12,000 and expected O&M costs of $3,000, increasing by $1,000 per year. The machine is required to have an immediate repair that costs $2,000. The estimated market values are expected to decline by 15% annually (going forward). The machine can be used for another 7 years at most. The new machine has a $40,000 purchasing price. The new machine's O&M cost is estimated to be $5,000 for the first year, decreasing at an annual rate of $100 thereafter. The firm's MARR is 15%. Assume a unique minimum AEC(15%) for both machines (both the current and replacement machine). (This is an infinite horizon decision problem). If the new machine's economic service life is four years, how much is saved in PEC (present equivalent cost, so at n=0) by keeping the defender only for one extra year when marginal analysis dictates (so PEC of savings by choosing jo…
Gardner Denver Company is considering the purchase of a new piece of factory equipment that will cost $402,240 and will generate $120,000 per year for 5 years. Calculate the IRR for this piece of equipment. Present value and future values table: https://openstax.org/books/principles-managerial-accounting/pages/time-value-of-money ________%
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A manufacturer of automated optical inspection devices is deciding on a project to increase the productivity of the manufacturing processes. The estimated costs for the two feasible alternatives being compared are shown below. Use the internal rate of return (IRR) method to determine which alternative should be selected if the analysis period is 8 years and the company's MARR is 4% per year. Alternative M N Initial costs $30,000 $45,000 Net annual cash flow $4,500 $7,000 Life in years 8 8 (a) IRR of base alternative = (b) IRR of incremental cash flow = (c) Choose Alternative
Use an excel spreedsheet to answer this question: The National Potato Cooperative purchased a deskinning machine last year for $150,000. Revenue for the first year was $ 50,000. Over the total estimated life of 8 years, use a spreadsheet to estimate the remaining equivalent annual revenues (years 2 through 8) to ensure breakeven by recovering the investment and a return of 10% per year. Costs are expected to be constant at $42,000 per year and a salvage value of $10,000 is anticipated.
A company is planning to install a new automated plastic-moulding press. Four different presses are available. The initial capital investments and annual expenses for these four mutually exclusive alternatives are as follows: Assume that each press has the same output capacity and has no market value at the end of its useful life; the selected analysis period is five years. Which press should be chosen? Use MARR = 20% per year.
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