11500216003Year52500607Cost of18002100290034004000operationRescue350025001700800800600500500ValueCost charges are assumed to occur in the middle of the year and are discounted from thebeginning of the year, so they must be multiplied by a factor V'/2 = (1 + i)-/2,We want to find the optimal replacement period. Use 12% annual interest and a newmachine value of $5,000.00

An asset's usage or maintenance cost increase with the period of time, then the assets need to be…

Answered: Year 2 3 5 2500 7 8 Cost of 1500 1600…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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! Required information A process for producing the mosquito repellant Deet has an initial investment of $165,000 with annual costs of $43,000. Income is expected to be $90,000 per year. What is the annual breakeven production quantity for both payback periods if net profit, that is, income minus cost, is $10 per gallon? (Consider the rounded values of years calculated in part a. Also, round your answer to the nearest integer.) When i = 0%, the annual breakeven production quantity is determined to be When i = 12%, the annual breakeven production quantity is determined to be gallons per year. gallons per year.
Question 5 An investment of $50,000 is made to purchase machinery that will allow us to manufacture a new product. The annual expenses to make the product are (5,000 + 5x) and the revenues from the product are 30 x, where x = the number of products sold each year. How many products must be sold per year, x, to break even? Consider a 7 year project life and an MARR of 12%.
Consider a 200,000 SF office building complex, with NOI of $25/SF/year with rents and operating expenses paid in arrears (at the end of the year) annually, and no capital expenditures. The rent will increase by 3% per year. The discount rate is 10%/year. a. What is the value of this office building, assuming that the building is sold at the end of year 10 and the cap rate at that time is expected to be 10%? What is the cap rate at time 0? b. What is the value of this office building, assuming that the building will be held and rented indefinitely (perpetually)? What is the implied cap rate at time 0? c. What is the value if the rents are paid in advance (at the beginning of the year) and the building is rented perpetually?
The purchase price of the machine required to produce a certain part is 40000 TL, the maintenance cost is 14000 TL / year and the scrap value after 5 years is 8000 TL. Since the variable cost in the production of the part is 2.5 TL/piece and the sales price of the piece is 4 TL / piece, how many products should be sold to reach the breakeven point at 12% interest rate?
Answer using excel: Machine A costs $316 and produces a profit of $106 at the end of each year for 7 years, while Machine B costs $128 and produces a profit of $71 at the end of each year for 4 years. Assuming the operation continues indefinitely and the cost of capital is 13%. Calculate equivalent annual value (EAV) to determine the better option. Enter EAV for Machine A below.
D-74 Your company is considering two alternatives: Alt. I Alt. II First cost $42,500 $70,000 Annual maintenance 6,000 4,000 Annual savings if implemented 18,500 20,000 Salvage value 12,000 25,000 Useful life of alternative 3 years 6 years What is the annual dollar advantage of Alt. II over Alt. I at an interest rate of 15%? (a) Alt. II has no annual advantage over Alt I. (b) $3020 (c) $3500 (d) $7436
Question 4: You have a opportunity to make a investment that has $10.000,000 landing, 1.500.000 machine, outsourcing 500.000 and finance cost 1.000.000. Machines have no scrap value at end of 4th year. You will pay interest payment at the end of 4rd year, that is $500.000. If you make this investment now, you will receive $4.500,000 one year from today, $3.000,000, $5.000,000 and $ 4.000,000 respectively. The appropriate discount rate for this investment is 14 percent. Tax rate is % 30. Should you make the investment? Why?
Fablab Mindanao purchased a water jet cutter in which their total manufacturing cost is expected to decrease due to an increased productivity as shown on the table below. 4 190 185 180 7 175 170 Year 2 200| 195 3 6 1 Cost, PhP 1000 165 a) Draw the Cash Flow Diagram b) Determine the equivalent annual cost at an interest rate of 8% per yeari
View Policies Current Attempt in Progress Cecil's Manufacturing is considering producing a new product. The sales price would be $10.65 per unit. The cost of the equipment is $86,000. Operating and maintenance costs are expected to be $4,100 annually. Based on a 7-year planning horizon and a MARR of units 12%, determine the number of units that must be sold annually to achieve breakeven. Carry all interim calculations to 5 decimal places and then round your final answer up to the nearest unit. The tolerance is ±5.
#34 to decide is you and trying of investment are worth while, compare Alternative: A > Incremental analysis (Alternative B соmраnу More than 2 alternatives if the additional increment pairs B wins then B vs C C A MARR Company at considering 2 different machines at 12% Both life spons = 10 years м/с X м/с у Initial Cost 160000 285000 Annual Operating Cost 45000 45000 Benefits per year. Salvage 90000 105000 Value 20000 40000
Q.1. special for extension rice in initial cost of 50,000 their recovery period conpute the dissipation amount if the 3rd year and the PV at the end of 5th year of life by each of these methods method A is SL method and method B is DD method the SV is 60,000
please answer with full work explanation calculation etc. please answer correctly KB. Chicago Co. is interested in purchasing a machine that would improve its operational efficiency. The cost is $200,000 with an estimated residual value of $20,000 and a useful life of eight years. Cash inflows are expected to increase by $40,000 a year. The company's minimum rate of return is 10 percent.The net present value of the project is

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