M101. Ivanhoe Inc. is considering modernizing its production facility by investing in new equipment and selling the old equipment. Thefollowing information has been collected on this investment:CostOld EquipmentAccumulated depreciationRemaining lifeCurrent salvage valueSalvage value in 8 yearsAnnual cash operating costs(c)ed Text$81,600$40,3008 years$10,530$0$35,100Net present value $Click here to view the factor table.CostDepreciation is $10,200 per year for the old equipment. The straight-line depreciation method would be used for the new equiprover an eight-year period with salvage value of $5,000.New EquipmentEstimated useful lifeSalvage value in 8 yearsAnnual cash operating costs$39,2008 years$5,000$29,800Calculate the net present value assuming a 12% rate of return. (Ignore income taxes.) (If the net present value is negative, use either anegative sign preceding the number e.g. -45 or parentheses e.g. (45). For calculation purposes, use 5 decimal places as displayed in thefactor table provided, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5,275.)ActivGo to!

Name: M101. Ivanhoe Inc. is considering modernizing its production facility
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: M101. Ivanhoe Inc. is considering modernizing its production facility by investing in new equipment and selling the old equipment. Thefollowing information has been collected on this investment:CostOld EquipmentAccumulated depreciationRemaining lifeC

Capital budgeting is a decision-making process to evaluate two or more projects. With the help of…

Business

Accounting

Ivanhoe Inc. considering modernizing its production facility by investing in new equipment and selling the old eq following information has been collected on this investment: Cost Accumulated depreciation Remaining life Current salvage value Salvage value in 8 years Annual cash operating costs Old Equipment (a) (c) ed Text $81,600 $40,300 8 years $10,530 Net present value $ $0 $35,100 Click here to view the factor table. Cost Depreciation is $10,200 per year for the old equipment. The straight-line depreciation method would be used for t over an eight-year period with salvage value of $5,000. New Equipment Estimated useful life Salvage value in 8 years Annual cash operating costs $39,200 8 years $5,000 $29,800 Calculate the net present value assuming a 12% rate of return. (Ignore income taxes.) (If the net present value is negative, negative sign preceding the number e.g. -45 or parentheses e.g. (45). For calculation purposes, use 5 decimal places as displayed factor table provided, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5,275.)