15. A machine was bought for SAR 70,000 and was used for 10 years at the end of which, it wassold. The machine generated an annual savings of SAR 15,000 for the company. Assumingan 8% interest rate, how much would the machine have been sold for if its annual capital costwas SAR 7,500? (select the closest answer)a) SAR 22,500b) SAR 30,650c) SAR 42,475d) Cannot be determined using the given information

In this we need to calculate the present value of annual savings and calculate the salvage value.

Answered: was b old. The machin n 8% interest rat…

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was b old. The machin n 8% interest rat was SAR 7,500? SAR 22,500 SAR 30,650 SAR 42,475 Cannot be dete

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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Question

15. A machine was bought for SAR 70,000 and was used for 10 years at the end of which, it was
sold. The machine generated an annual savings of SAR 15,000 for the company. Assuming
an 8% interest rate, how much would the machine have been sold for if its annual capital cost
was SAR 7,500? (select the closest answer)
a) SAR 22,500
b) SAR 30,650
c) SAR 42,475
d) Cannot be determined using the given information

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XYZ company has A piece of new equipment will cost $70,000. The equipment will provide a cost savings of $15,000 per year for ten years, after which it will have a $3,000 salvage value. If the required rate of return is 14%, the equipment's net present value is: a. (8240) b. None of answers are correct c. 9050 d. 23888
2. A company determines that the maximum they should pay for a new machine is $46,679. The company estimates the machine will produce a net cash flow of $8,000 per year and will last for 7 years. The interest rate that is acceptable to the company is 5%. At the end of 7 years the company estimates it will be able to sell the machine for what amount? A. $980 B. $391 C. $1,186 D. $ 68 E. $550
Help question 17
2. It is rëquired to select one of the three machines. Which machine should be selected, based on the present worth comparison at an interest rate of 12% per year, if the costs are shown below? Туре X 7,650 1,200 Туре Y 12,900 900 2,000 Туре Z 17,000 750 First cost, $ Maintenance cost,.( $ lyear) Salvage value, ( $) Economic (years) 4,000 12 4
W:48)
1. Use the information below for the next two questions. Leaky Pipe Inc. is considering a new machine for its largest product line. The cash flows Lastalled Purchase Price S40, 000 Roduced Cost of Materials S 6,000 per year Labor Savings S9, 000 per year locrease in Working Capital $5, 000 (for Year 0 and I only) Depreciable Life (zero salvage value) 4 years Economic Life 8 years Required Return 12% Tax Rate 40% a . What is the NPV of this machine if it does not replace any other?. b. Suppose the machine replaces another machine with the following characteristics: Book Value of Old Machine $6.000 Market Value of Old Machine $4,000 Remaining Depreciable Life of Old Machine 6years Assume the old machine was not expected to have any salvage value and compute the NPV of the New Machine.
9. Lt. Dan Corporation invested S$80,000 in a manufacturing equipment. The salvage value of the asset is expected to be $0. The company is expected to add $9,600 per year to the net income. Using the original cost of the asset, the unadjusted rate of return on the investment will be? Hint: If the problem does not give you enough information to determine the net values, keep your calculations simple!
Please do it in EXCEL FİLE
Note: Give me solution in Excel otherwise leave it. Thank you What is the payback period at an interest rate of 10% per year for an asset with initial cost of $ 16,000 ; salvage value of $ 18,000 whenever it is sold and annual revenue of $ 2,000 per year?
T1.
Mj
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