poi The Borstal Company has to choose between two machines that do the same job but have different lives. The two machines have thefollowing costs:YearMachine AMachine B0$ 50,000$ 60,000112,00011,700212,00011,7003412,000+ replace11,70011,700+ replaceThese costs are expressed in real terms.a. Suppose you are Borstal's financial manager. If you had to buy one or the other machine and rent it to the production managerfor that machine's economic life, what annual rental payment would you have to charge? Assume a 10% real discount rate andignore taxes.Note: Do not round intermediate calculations. Enter your answers as a positive value rounded to 2 decimal places.b. Which machine should Borstal buy?c. If there is steady 4% per year inflation, what will be the annual rental payment for machine B for the second year?Note: Enter your answer as a positive value rounded to 2 decimal places.> Answer is complete but not entirely correct.Annual RentalPaymenta. Machine A$27,773.54 xa. Machine B$50,419.03 ×b. Which machine should Borstal buy?Machine Bc. Year 2 rental payment$33,127.51 X

a. To calculate the annual rental payment, we need to determine the equivalent annual cost (EAC) for…

Answered: The Borstal Company has to choose…

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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The Borstal Company has to choose between two machines that do the same job but have different lives. The two machines have the following costs: Year Machine A Machine B $51,000 0 $41,000 1 10,200 8,400 2 10,200 8,400 3 10,200+ replace 8,400 4 8,400 + replace These costs are expressed in real terms. a. Suppose you are Borstal's financial manager. If you had to buy one or the other machine and rent it to the production manager for that machine's economic life, what annual rental payment would you have to charge? Assume a 8% real discount rate and ignore taxes. (Do not round intermediate calculations. Enter your answers as a positive value rounded to 2 decimal places.) Answer is complete but not entirely correct. Annual Rental Payment Machine A $ 25,108.00 Machine B $ 24,561.00 > b. Which machine should Borstal buy? Machine A Machine B
The Borstal Company has to choose between two machines that do the same job but have different lives. The two machines have the following costs: Year Machine A $48,000 11,600 11,600 11,600+ replace OLZ3+ 0 1 2 4 Machine A Machine B Machine B $58,000 Annual Rental Payment 11, 200 11, 200 These costs are expressed in real terms. a. Suppose you are Borstal's financial manager. If you had to buy one or the other machine and rent it to the production manager for that machine's economic life, what annual rental payment would you have to charge? Assume a 12% real discount rate and ignore taxes. (Do not round intermediate calculations. Enter your answers as a positive value rounded to 2 decimal places.) 11,200 11,200 replace
The Borstal Company has to choose between two machines that do the same job but have different lives. The two machines have the following costs: Year Machine A 0 OLN3+ 1 2 4 $48,000 11,600 11,600 11,600 + replace Machine A Machine B These costs are expressed in real terms. a. Suppose you are Borstal's financial manager. If you had to buy one or the other machine and rent it to the production manager for that machine's economic life, what annual rental payment would you have to charge? Assume a 12% real discount rate and ignore taxes. (Do not round intermediate calculations. Enter your answers as a positive value rounded to 2 decimal places.) Machine B $58,000 11,200 11, 200 11,200 11,200 + replace Annual Rental Payment
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The Borstal Company has to choose between two machines that do the same job but have different lives. The two machines have the following costs: Year Machine A 0 1 2 3 4 $46,000 11, 200 11,200 11,200 replace Machine A Machine B Machine B $56,000 These costs are expressed in real terms. a. Suppose you are Borstal's financial manager. If you had to buy one or the other machine and rent it to the production manager for that machine's economic life, what annual rental payment would you have to charge? Assume a 8% real discount rate and ignore taxes. (Do not round intermediate calculations. Enter your answers as a positive value rounded to 2 decimal places.) $ 29,029.46 x $ 27,318.43 x 10,400 10,400 > Answer is complete but not entirely correct. Annual Rental Payment 10,400 10,400 replace O Machine A Machine B b. Which machine should Borstal buy? c. If there is steady 4% per year inflation, what will be the annual rental payment for machine B for the second year? (Enter your answer as a…
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hello, help please with B and C
Font Paragraph Styles The Borstal Company has to choose between two machines that do the same job but have different lives. The two machines have the following costs: Year Machine A Machine B 0 $ 43,500 $ 53,500 1 10,700 9,400 2 10,700 9,400 3 4 10,700+ replace 9,400 9,400+ replace These costs are expressed in real terms. a. Suppose you are Borstal's financial manager. If you had to buy one or the other machine and rent it to the production manager for that machine's economic life, what annual rental payment would you have to charge? Assume a 7% real discount rate and ignore taxes. Note: Do not round intermediate calculations. Enter your answers as a positive value rounded to 2 decimal places. b. Which machine should Borstal buy? c. If there is steady 5% per year inflation, what will be the annual rental payment for machine B for the second year? Note: Enter your answer as a positive value rounded to 2 decimal places. a. Machine A a. Machine B b. Which machine should Borstal buy? c.…
k esc Daily Kneads, Inc., is considering outsourcing one of its many products rather than making it internally. The supplier will charge $20,000 for 20,000 pounds of the product. The costs per pound to make this product include: Direct Labor Direct Materials Allocated Corporate Overhead Calculate the incremental savings (or loss) per pound if the company outsources the product. If the company will lose money per pound by outsourcing, enter your answer with a negative sign "-" (not parentheses). Click Save and Submit to save and submit. Click Save All Answers to save all answers. 1 Q A Z 2 W S Cost per Pound $0.30 $0.40 $0.80 #3 X E $ 4 D. .:: R C 07 dº % 5 F MacBook Pro T 6 V G & Y 7 H B * 00 8 U J N O Save All O O K M
the answer to this question is Q7.3= A,F,H but we just need to find how we get that answer for thIis questions, please help NO EXCEL
An operations manager is deciding on the level of automation for a new process. The fixed cost for automation includes the equipment purchase price, installation, and initial spare parts. The variable costs per unit for each level of automation are primarily labor related. Each unit can be sold for $81. As in many cases, you have the default alternative of doing nothing ($0 fixed cost, $0 variable costs). Hint: For these questions, also consider the “Do Nothing” option as a viable option when making your decision. Alternative Fixed Costs Variable Costs per Unit A $100,000 $54 B $272,000 $31 C $560,000 $20 Recommended: graph each alternative with units on the x-axis and $ on the y-axis. Also, include revenue on the chart. Identify the break-even points and points of indifference.
InteliSystems needs 79,000 optical switches next year . By outsourcing them, InteliSystems can use its idle facilities to manufacture another product that will contribute $140,000 to operating income, but none of the fixed costs will be avoidable. Should InteliSystems make or buy the switches? Show your analysis based on the information in the table below for making 70,000 switches.

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