Dinshaw Company is considering the purchase of a new machine. The invoice price of the machine is $87,306, freight charges are estimated to be $2,620, and installation costs are expected to be $7,370. The annual cost savings are expected to be $14,980 for 11 years. The firm requires a 20% r

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

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A: As per rule, allowed to answer first three subparts and post the remaining in the next submission.

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A: Present worth = Future value / (1+r)^n

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A: Formulas that are used:-

Q: Calculate the PV of the project using the APV method.

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Q: Should the company make this investment?

A:

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Q: Solve

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Q: Want Answer

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A: In this we have to calculate the present value of all cash flow.

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A: Life of the machine = 1 year  cost of machine = $2,000 Output of the machine = $2,300

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.