Question 2 Another Company has just invested in a new Machining Center that cost $550,000. The company believes that it will be able to use this new piece of equipment for the next 10 years. At the end of this 10 year period, the company thinks that they can sell this equipment for $75,000. The company's MARR value is 10% ycy. (P/F %.n) (A/F%n (F/A Xn) (A/P %n) (P/A%n 10 0.3855 0.06275 15.9374 0.16275 6.1446 Assume The Annual Capital Recovery & Return Value (CR) for this new equipment $-84,806 The Annual Labor Costs - $50,000 The Annual Material Costs = $23.000 The Annual Overhead Costs - $45,000 Annual Sales Revenue resulting from the purchase of the new machine $220,000 Question: What is the Annual Profit Amount the company can expect from the purchase of the new machine? O $15,194 O $-1.706 O $12,514 O $17.194 O $3.206
Question 2 Another Company has just invested in a new Machining Center that cost $550,000. The company believes that it will be able to use this new piece of equipment for the next 10 years. At the end of this 10 year period, the company thinks that they can sell this equipment for $75,000. The company's MARR value is 10% ycy. (P/F %.n) (A/F%n (F/A Xn) (A/P %n) (P/A%n 10 0.3855 0.06275 15.9374 0.16275 6.1446 Assume The Annual Capital Recovery & Return Value (CR) for this new equipment $-84,806 The Annual Labor Costs - $50,000 The Annual Material Costs = $23.000 The Annual Overhead Costs - $45,000 Annual Sales Revenue resulting from the purchase of the new machine $220,000 Question: What is the Annual Profit Amount the company can expect from the purchase of the new machine? O $15,194 O $-1.706 O $12,514 O $17.194 O $3.206
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Question 2
Another Company has just invested in a new Machining Center that cost $550,000. The company believes that it will be able to use this
new piece of equipment for the next 10 years. At the end of this 10 year period, the company thinks that they can sell this equipment for
$75,000. The company's MARR value is 10% ycy.
(P/F %.n) (A/F%.n) (F/A %,n)(A/P %.n) (P/A%n)
10
0.3855
0.06275
15.9374 0.16275
6.1446
Assume:
The Annual Capital Recovery & Return Value (CR) for this new equipment $-84,806
The Annual Labor Costs = $50,000
The Annual Material Costs = $23.000
The Annual Overhead Costs $45,000
Annual Sales Revenue resulting from the purchase of the new machine - $220,000
Question: What is the Annual Profit Amount the company can expect from the purchase of the new machine?
O $15,194
O $-1,706
O $12,514
$17,194
O $-3.206
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