EAC
Q: What is the purchase price of the machine?
A: Purchase price of the machine or any asset is the cost of the asset which has been paid by the…
Q: The NPV of the replacement is $ ?
A: Net present value is the difference of discounted cash inflows and outflows.
Q: Lowell Inc. is thinking about replacing an old computer with new one. The new one will cost…
A: Free cash flow is that amount which is earned by the investor from the project. It is the net amount…
Q: by a Bawan at an interest rate of 12% payable annually Determine the aher tax cash flows by using…
A: Net present value is determined by deducting the initial investment from the current value of cash…
Q: If a machine costs $125,000 and has a life of 7 years with a salvage value of 5% of the original…
A: The net cash flow = $4,700 per month - $2,500, = $2,200 per month or $26,400 per year.
Q: SGS Golf Academy is evaluating different golf practice equipment. The "Dimple-Max" equipment costs…
A: Equivalent annual cost refers to teh cost which is incurred for owning, operating, and the…
Q: The market value of a presently owned machine in a wind turbine manufacturing plant is $130,000. It…
A:
Q: JADO Mfg. is trying to decide which one of two machines to purchase. Machine A costs $398,000, has a…
A: Machine AMachine BInitial cost$398,000$510,000Useful life5 years4 yearsPre-tax annual operating…
Q: SGS Golf Academy is evaluating different golf practice equipment. The "Dimple-Max" equipment costs…
A: Equivalent annual cost (EAC) is a financial metric used to compare the costs of different investment…
Q: Sheep Ranch Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs…
A: Equivalent annual cost refers to the cost incurred for owning, operating, and the maintenance of an…
Q: Your firm needs a machine which costs $220,000, and requires $37,000 in maintenance
A: MACRS (Modified Accelerated Cost Recovery System) is a system used to calculate tax deduction of…
Q: Please DO NOT USE EXCEL TO SOLVE A land development company is considering the purchase of earth…
A: To determine whether it is more cost-effective for the company to purchase or rent the equipment, we…
Q: A corporation purchased a machine for $60,000 four years ago. It had an estimated life of 10 years…
A: Business organizations are required to charge depreciation expenses on their assets. The book value…
Q: A machine can be purchased at t=0 for $20,000. The estimated life is 15 years, with an estimated…
A: While evaluating the project, cash inflow should be higher than cash outflow in present value terms.…
Q: Your firm needs a machine which costs $280,000, and requires $43,000 in maintenance for each year of…
A: After Tax salvage value is that amount which is received by the investor from selling the assets…
Q: A remotely situated fuel cell has an installed cost of BD2,000 and will reduce the existing expen:…
A: Salvage value is the book value of an asset (like an equipment or a machinery) after all…
Q: Sheep Ranch Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs…
A: equivalent annual cost is also EAC. It is a capital budgeting technique which helps in knowing…
Q: ne member of a
A: Capitalize Cost = FC + OMi+RC -SV(1 + i)n-1
Q: A dump truck was bought for P30,000 six years ago. It will have a salvage value of 3,000 four years…
A: Depreciation is the reduction in the value of asset because of its use & obsolescence.…
Q: Animals, Inc. is considering a machine that will cost $18,000 and which can be sold after 3 years…
A: Net present value refers to the method of capital budgeting used for estimating the difference…
Q: As a result of improvements in product engineering, United Automation is able to sell one of its two…
A: There are two options available to the company.Option 1: Selling the old machinery and retaining new…
Q: An asset in the five-year MACRS property class cost $100,000 and has a zero estimated salvage value…
A: Present worth is the worth in current time of the amount which is expected to be received in some…
Q: You need to choose between two machines based on the folowing information: Machine 1 has a 4 year…
A: Given that :- Machine 1 cost = $322,500 ( 4 years life ) Pre tax operating cost = $64,500 Machine…
Q: A machine was purchased with an amount of P375,000.00 and a modification cost of P100,000.00 after…
A: Capitalization costs include: Installation costs Labor charges Transportation costs Interest…
Q: A project to replace an old machine with a new one is under consideration. The new machine costs…
A: Salvage value net of tax is that amount which is received by the investor from selling the assets at…
Q: The following is governed by an income tax rate of 25% . Depreciation rate is determined using MACRS…
A: Correct option is 1.
Q: A firm is looking at a new project requiring a machine that would cost $500,000.The cost will be…
A: Salvage value = $125,000Tax rate = 23%
Q: The following data is associated with a proposed replacement project: A machine that originally cost…
A: Machine original cost =25,000 Life of assets =5 year Market value now= 12000 Tax rate =34%
Q: 2. Super Apparel wants to replace an old machine with a new one. The new machine would increase…
A: The objective of the question is to calculate the Accounting Rate of Return (ARR) for the new…
Q: An industrial organization has established an automated assembly line (for $240,000) that will…
A: a) Before Tax Cash Flow (BTCF) and After-Tax Cash Flow (ATCF) can be computed as follows: Result…
Q: If the machine is purchased, annual revenues are expected to be $100,000 and annual operating…
A: Pay back period is number of years required to recover initial investment of machine.
Q: Two different mutually exclusive alternatives can be used for producing a certain machine part.…
A: For Alternative A:Initial cost= $60,000Salvage value= $15,000Operating cost= $35,000Number of years…
Q: Clemson Software is considering a new project whose data are shown below. The required equipment…
A: Straight-Line Method is used to compute depreciation on fixed asset where equal depreciation for…
Q: is replaced, it has no salvage value. Compute the present equivalent cost of the equipment using 10%…
A: Present Value: It is the present worth of the cash flows discounted at a specific interest rate.…
Q: Sheep Ranch Golf Academy is evaluating new golf practice equipment. The "Dimple Max" equipment costs…
A: Equivalent annual cost refers to the cost which is incurred for owning, operating, and the…
Q: Steadman Company is considering an investment in a new machine for an independent five-year project.…
A: Accounting Rate of Return, or ARR, is a financial statistic used to evaluate the viability of a…
Q: The cost of a new machine is $40,000 and the new machine takes $2,000 to install. At the end of its…
A: Depreciation is the way of allocating the capitalized cost of assets over its useful life. The…
Q: Builtrite is considering the purchase of a new five-year machine worth $90,000. It will cost another…
A: Terminal cash flow is the cash flow available when equipment is used and sold at the end of project…
Q: 2. Super Apparel wants to replace an old machine with a new one. The new machine would increase…
A: The objective of the question is to calculate the Accounting Rate of Return (ARR) for the new…
Q: Muthusamy Curry Mills (MCM) is considering the purchase of a new milling equipment to replace an…
A: a) Calculate the initial investment as shown below. Hence the initial investment after selling an…
A machine costs $50.000 and it requires $1,200 as maintenance fees for each year over its five-year life. After that, this machine has to be replaced by a new one. Assume a tax rate of 20% and a discount rate of 12%. If the machine belongs in a 30% CCA class and has no salvage value. what is the EAC,
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- A machine costs $100,000 and generates $25,000 of pre-tax operating income per year. The tax rate is 40%. The machine is in a CCA class with a 20% rate. The cost of capital is 12%. The machine is expected to last 10 years and will have no salvage value. Other assets will remain in the asset class. What is the NPV of the machine?A certain company is considering the use of a concrete electric pole in the expansion of its power distribution lines. A concrete pole cost 18,000 each and will last 20 years. The company is presently using wooden poles which cost 12,000 per pole and will last 10 years. Assume annual taxes amount to 1 percent of first cost and zero salvage value in both cases. Money is worth 12 percent. 1.1. What is the amount of annual depreciation each pole? 1.2. Excluding interest on capital, what is the annual cost of the wooden pole?with diagram thank you
- You purchased a box-making machine that cost $50,000 five years ago At that time, the system was estimated to have a service life of five years with salvage value of $5,000. These estimates are still good. The property has been depreciated at a declining balance CCA rate of 30%. Now (at the end of year 5 from pur chase) you are considering selling the machine for $10,000. What UCC should you use in determining the disposal tax effect?A certain company is considering the use of a concrete electric pole in the expansion of its power distribution lines. A concrete pole cost 18,000 each and will last 20 years. The company is presently using wooden poles which cost 12,000 per pole and will last 10 years. Assume annual taxes amount to 1 percent of first cost and zero salvage value in both cases. Money is worth 12 percent. 1.3. Excluding interest on capital, what is the annual cost of the concrete pole? 1.4. Using ROR on additional investment, which pole should be used?Sheep Ranch Golf Academy is evaluating new golf practice equipment. The "Dimple- Max" equipment costs $110,000, has a 4-year life, and costs $9,100 per year to operate. The relevant discount rate is 12 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 $8,300 at the end of the project's life. The relevant tax rate is 24 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.) EAC
- RR must build a tunnel to maintain his access around the mountain. The tunnel could be fabricated of normal steel for an initial cost of $45,000 and should last for 18 years. Maintenance will cost $1,000 per year. Another option would be to use corrosion resistant steel, which will last for 18 years, with annual maintenance cost of $100. In 18 years there would be no salvage value for either bridge. RR pays combined federal and state taxes at the 48% marginal rate and uses straight-line depreciation. If the after tax MARR is 10%, what is the maximum amount that should be spent on the corrosion-resistant tunnel? Enter your answer as follow: 123456.78A company plans to buy $ 11300 worth of metering devices. The machine, which has an economic life of 12 years and will not be used afterwards, should be put into maintenance at the end of a period of 2 years in order to be able to make good measurements. First maintenance cost $ 500 And each maintenance cost is twice the previous maintenance cost. There is no scrap value at the end of the machine's economic life. The company gains varying amounts every year due to the purchase of this machine. For the first three years, the earnings are $ 1000 each year. Annual earnings for each subsequent 3-year period increase by $ 1000 over the previous 3-year period. a) Draw the cash flow diagram and find the IIR value. b) If you managed the company, would you buy this machine when the MARR was 5% and explain why.Your firm needs a machine which costs $120,000, and requires $33,000 in maintenance for each year of its 5 year life. After 5 years, this machine will be replaced. The machine falls into the MACRS 5-year class life category. Assume a tax rate of 35 percent and a discount rate of 15 percent. What is the depreciation tax shield for this project in year 5?
- The Lana company is planning to purchase a machine known as machine D. Machine D would cost $ 28580 and would have a useful life of 5 years with zero salvage value. The expected annual cash inflow of the machine is $ 9529. Answer:please help me, thank youa) Titiwangsa Corporation is using a computer where its original cost was RM25,000. The machine is now 5 years old and has a current market value of RM5,000. The computer is being depreciated over a 10-year life toward zero salvage value. Depreciation is on straight line basis. Management is contemplating to purchase a new computer which will cost RM50,000 and the estimated salvage value is RM1,000. Expected savings from the new computer is RM3,000 a year. Depreciation is on straight line basis over a seven-year life and the cost of capital is 10%. If the tax rate is 50%, should the firm replace the asset?
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