Fruit Packers uses packing machines to prepare its products for shipping. Each machine  costs $136,000 and lasts about 4 years before it needs to be replaced. In addition, the  operating cost per machine is $6,000 a year. What is the equivalent annual cost of one  packing machine if the required rate of return is 12%? Ignore tax.  The annuity factor is 1/r-1/[r*(1+r)^n

Q: You own a wholesale plumbing supply store. The store currently generates revenues of $1.01 million…

A: The objective of the question is to calculate the value of the business today given the potential…

Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…

A: Step 1:a)We have to calculate the IRR of this project.We will use the IRR function in Excel to…

Q: A machine costs $5240 and produces benefits of $1000 at the end of each year for 8 years. Assume an…

A: The Payback period is among the of the techniques of capital budgeting that do not take into…

Q: A device is purchased for $30,000. It yields a $5,000 yearly net profit for first 4 years and then…

A: Given,  price of device =$30,000

Q: You own a wholesale plumbing supply store. The store currently generates revenues of $1.03 million…

A: A company entity's entire value or financial worth is generally called as its "business worth." This…

Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…

A: Here,

Q: A firm can lease a truck for 4 years at a cost of $38,000 annually. It can instead buy a truck at a…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…

A: IRR should be higher than the cost of capital to accept the project because the NPV will be positive…

Q: A new gizmo costs $9050. Maintenance costs $6907 per year and labour savings are $1900 per year.…

A: The payback period is a financial metric that is commonly used to determine how long it will take…

Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…

A: Both parts of the question are solved.Explanation and Working files are attached below:Comment below…

Q: Champion Bakers uses specialized ovens to bake its bread. One oven costs $1000,000 and lasts about 4…

A: First cost (X) = $1000000 Annual cost (A) = $10000 n = 4 years r = 17%

Q: A new gizmo costs $10 000. Maintenance costs $2000 per year and labour savings are $6567 per year.…

A: The payback period refers to the period that is required to recover the initial cost. With the help…

Q: A new transmission in your truck will cost $5,000. Luckily, it should reduce maintenance expense by…

A: Profitability Index is a financial tool which tells whether an investment should be accepted or…

Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…

A: Annual cash inflow = $5.05Initial cost = $7.97 millionIRR = ?IRR should be higher than the cost of…

Q: The ABC Corporation is considering introducing a new product, which will require buying new…

A: Calculation of break even sale in units are as follows, Break even point where revenue  equal to…

Q: ALUM Inc. uses high-tech equipment to produce specialized products. Each one of its machines costs…

A: Cost of Machine = $2345000Required rate of return = 9.5%Life of the machine = 4 years

Q: about 5 years before it needs replaced. The operating cost per machine is $16,000 a year. What is…

A: We can determine the EAC by converting the cost of the machine into an annual periodic cost and…

Q: How to compute Equivalent Annual Annuity on financial calculator: The old combine is good for 2…

A: Equivalent annual annuity (EAA) is an approach which is used to select best alternative between two…

Q: Econo - Cool air conditioners cost $390 to purchase, result in electricity bills of $168 per year,…

A: Equivalent annual cost is equivalent cost that includes the cost of purchase and also the cost of…

Q: You have purchased a canning machine for $7,000. You expect the machine to save your company $3,775…

A: The profitability index (PI) is a financial metric used to evaluate the attractiveness of an…

Q: A new delivery van costs $20,000 and can be financed for 60 months with a $4,000 down payment.…

A: The monthly payment is the amount that will be paid each month to repay the loan. It mainly depends…

Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…

A: To solve this problem, we can use the IRR formula and compare it with the NPV value provided: a. To…

Q: You own a small machine shop. You would like to save $340, 000 to buy new equipment six years from…

A: Amount like to save to buy new equipment = $340,000Number of years  = 6 yearsReturns = 5.8%

Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…

A: IRR refers to the internal rate of return. It is the rate at which NPV becomes nil.

Q: You own a wholesale plumbing supply store. The store currently generates revenues of $1.01 million…

A: Understanding the value of your business can provide valuable insights into its financial health,…

Q: A forklift Currency cost $39,000. You estimale that you will need to replace this forklift in w…

A: Variables in the question:PV=$ 39000n=10 yearsIncrease in the cost of forklift cost per year (r)=3%

Q: A company sells Tidbits to consumers at a price of $120 per unit. The costs to produce Tidbits is…

A: Operating cash flow refers to the cash flow that the company generates after adjustment of all types…

Q: Your firm needs to purchase 1,200 traffic cones from a supplier. One supplier demands a payment of…

A: Present value is an estimate of the present value of future cash values ​​that may be received at a…

Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…

A: The objective of the question is to calculate the Internal Rate of Return (IRR) for a project and to…

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.