Please correct answer and don't used hand raiting Q#5. A company must choose between new computer systems: Alpha and Bravo, toreplace the existing system to support its ongoing operations. System alpha costs $50,000and will result in savings of $19,000 per year during its four-year life. System Bravo costs$75,000 and will result in savings of $15,000 per year during its nine-year life. Theappropriate discount rate is 8%. Which system should the firm choose and why? Assumeboth systems can be replicated indefinitely and there are no taxes.

CONCEPT:Net Present Value (NPV) compares projects with different timelines by:1. Converting future…

Answered: Q#5. A company must choose between new…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 15E

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Basic Present Value Concepts The Atlantic Medical Clinic can purchase a new computer system that will save $7,000 annually in billing costs. The computer system will last for eight years and have no salvage value. Required: What is the maximum price (i.e., the price that exactly equals the present value of the annual savings in billing costs) that the Atlantic Medical Clinic should be willing to pay for the new computer system if the clinic’s required rate of return is: 1. Sixteen percent? 2. Twenty percent?
3. A company is planning to purchase a new machine to expand its production and to start anew project. There are two brand available A and B in the market. Both the machines are costing RO 70,000. The following cash inflows are expected to come for both the machines. Advise which machines will be better if the discounting rate is 10% for expansion of this project. Years Machine A Machine B A B 15,000 17,600 20,200 22,000 18,500 20,000 21,500 23,000 14,800 10,600 11,700 11,000 6.
Trulovia Manufacturing is looking to purchase a machine that will increase its efficiency in their manufacturing process. Trulovie wants to use Scenario Manager to evaluate the following four scenarios based on possible purchase prices and interest rates for a 10-year loan. What is the monthly payment for Scenario 2? Scenario Equipment Cost Loan Tern 1 9 years 2 10 years 11 years 9 years 3 $ 145,000 $ 147,500 $ 150,000 $ 155,000 Multiple Choice $116174 $1.260.41 $1,385.72 $1,448.26 Interest Rate 78 58 48 28
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Q. 3. You have an opportunity to install solar panels on your home. The upfront cost of installing the system is $30,000 and the system is expected to save you $140 per month in electricity costs. The expected lifetime of the system is 25 years. a) Write down the formula for the internal rate of return on this project. b) Use Excel to graph the internal rate of return at different discount rates, ranging from 0% to 10%. Attach your graph. c) Over the last 20 years the rate of return on the U.S. stock market has been an average of 7% (using the annual rate of growth in the Wilshire 5000 index). Given that you could invest your $30,000 in the stock market, does the investment in solar panels make sense from an economic perspective? Why or why not? d) How high would the monthly electricity savings need to be to justify this investment if the internal rate of return needed to be at least 7%.
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Give typing answer with explanation and conclusion Galvanized Products is considering the purchase of a new computer system for their enterprise data management system. The vendor has quoted a purchase price of $100,000. Galvanized Products is planning to borrow 1/4th of the purchase price from a bank at 15% compounded annually. The loan is to be repaid using equal annual payments over a 3-year period. The computer system is expected to last 5 years and has a salvage value of $5,000 at that time. Over the 5-year period, Galvanized Products expects to pay a technician $25,000 per year to maintain the system but will save $45,000 per year through increased efficiencies. Galvanized Products uses a MARR of 21%/year to evaluate investments. What is the future worth of this investment?
1
i want the answer asap. lol dont reject them under incomplete info again
6. A large electronic retailer is considering the purchase of software that will minimize shipping expenses in its supply chain network. This software, including installation and training would be a $10 million investment for the retailer. If the firm nominal interest is 15% per year and the life of the software is four years, what annual savings in shipping expenses must there be justify the purchase of the software?
Q.1.
5/ a/ You propose to replace windows to save energy. With a discount rate of 6%, what yearly energy savings are required to offset the $25,000 project cost? Consider an investment period of 10 years, and a lifetime of the windows of 30 years b/ Assume that the windows save the amount of energy calculated in 5/a. If the windows would have needed to be replaced anyways at a cost of $20,000 for standard efficiency windows, what is the ROI and Payback for upgrading the windows to the energy efficient model used in Sa/ for the upgrade cost of $5,000?

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