Your firm needs a computerized machine tool lathe that costs $50,000 and requires $12,000 in maintenance for each year of its three-year life.  After three years, this machine will be replaced.  The machine falls into the MACRS three-year class life category, and neither bonus depreciation nor Section 179 expensing can be used.  Assume a tax rate of 21 percent and a discount rate of 12 percent.  If the lathe can be sold for $5,000 at the end of year three, what is the after-tax salvage value

Q: You are debating on purchasing a limo for the use of the executive team. The purchase price would be…

A: Net present value is present value of cash inflows minus present value of cash outflows. In the…

Q: The NPV of the replacement is $        ?

A: Net present value is the difference of discounted cash inflows and outflows.

Q: ou must evaluate a proposal to buy a new milling machine. The base price is $108,000, and shipping…

A: After tax salvage value is calculated as shown below.

Q: Karsted Air Services is now in the final year of a project. The equipment originally cost $24…

A: Given: Cost of equipment = $24 million Depreciated = 100% Tax rate = 30% Sale value = $7 million

Q: what is the NPV of this project?

A: The difference between the current value of cash inflows and outflows is referred to as net present…

Q: You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner…

A: Amortized loan: It is a type of loan where the borrower would make equal periodic payments towards…

Q: You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner…

A: given that, scanner costs $4,800,000 method of depreciation used = Straight line method useful life…

Q: Food Harvesting Corporation is considering purchasing a machine for $1,718,750. The machine is…

A: Introduction: The payback period is the number of years needed to repay the initial financial…

Q: Karsted Air Services is now in the final year of a project. The equipment originally cost $33…

A: Book value of asset today = $0 million (100% depreciated)  Equipment selling price today = $10…

Q: Cori's Dog House is considering the installation of a new computerized pressure cooker for hot dogs.…

A: Net Present value(NPV) = Present value of Future cash flows - Initial investmentPresent value =…

Q: Fine Press is considering replacing the existing press with a more efficient press. The new press…

A: Cash flow shows the net balance of the company's cash inflow and outflow means how much cash is…

Q: Thornley Machines is considering a 3-year project with an initial cost of $618,000. The project will…

A: Project is to be selected when the net present value of project is more than 0.NPV = PV of inflows -…

Q: How should the $4,500 spent last year be handled? The cost of research is an incremental cash flow…

A: $4500 spent on the feasibility study is a sunk cost. Sunk cost is a cost that has already occurred…

Q: Cori's Meats is looking at a new sausage system with an installed cost of $440,000. The system…

A: Given, The cost of machine is $440,000 Term is 5 years Savings in operating costs $215,000

Q: 10s.13 You are interested in purchasing a machine that will save $200,000 per year before taxes. The…

A: The financial data related to the machine is given Initial cost: $150,000 Economic service life: 5…

Q: We can continue to use an existing machine at a cost of $22,500 annually (after-tax cash basis,…

A: A financial statistic called net present value (NPV) compares the present value of projected cash…

Q: what is the NPV of this project? ons and round your answer to 2 decin ons

A: The net present value involves taking the total expected return on an investment, deducting the…

Q: North Woods Paper Company owns 600 acres of forest. The company plans to cut 100 acres of trees and…

A: If Trees sold today:Sale value = $2.2 million.If Trees sold after 1 yearSale value = 30% more   =…

Q: You must evaluate a proposal to buy a new milling machine. The base price is $105,000, and shipping…

A: Base price$105,000Shipping & installation cost$9,000Salvage value$68,250Increase in net…

Q: Fox Hollow Franks is looking at a new system with an installed cost of $540,000. This equipment is…

A: Net present value refers to the method of capital budgeting which is useful investors in evaluating…

Q: You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: Elder, Inc. is considering the purchase of a new air-handling system that will have no effect on…

A: Savings means the amount which a firm earns by installing a new plant or project. The project which…

Q: As a result of improvements in product engineering, United Automation is able to sell one of its two…

A: There are two options available to the company.Option 1: Selling the old machinery and retaining new…

Q: Dog Up! Franks is looking at a new sausage system with an installed cost of $715,000. The asset…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: Your company wants to purchase a photostat machine which costs RM15,000. It will be obsolete in 5…

A: A company considering the purchase of an asset, whose ownership is just incidental to using the…

Q: Karsted Air Services is now in the final year of a project. The equipment originally cost $24…

A: Book value of asset = 0 million (100% depreciated)  Equipment sold at = 10 million Tax rate = 20%

Q: Dog Up! Franks is looking at a new sausage system with an installed cost of $715,000. The asset…

A: Therefore, Net present value = PV of cash inflow + PV of terminal cashflow - PV of cash outflow…

Q: You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: Fort requires equipment costing $320,000.  It is a  9-year project, and is depreciated straight line…

A: cost of equipment= $320,000 life span of the project= 9 years  Sales generated= $189,000  cost=…

Q: Karsted Air Services is now in the final year of a project. The equipment originally cost $21…

A: Equipment originally cost =21,000,000 Depreciation (100%*21,000,000)  =21,000,000 Book value…

Q: EAC

A: EAC stands for the equal annum cost or the equivalent annual cost. It is the cost of the asset as…

Q: Your firm needs a computerized tool lathe which cost $49000 and requires $119000 in maintenance for…

A: Given information: Cost of computerized tool is $49,000 Maintenance cost is $119,000 Tax rate is 34%…

Q: An industrial organization has established an automated assembly line (for $240,000) that will…

A: a) Before Tax Cash Flow (BTCF) and After-Tax Cash Flow (ATCF) can be computed as follows: Result…

Q: incorporated is considering the use of concrete electric pole in the expansion of its power…

A: The present value of pole is annual cost of pole that is being used and lowest annual cost will be…

Q: You have been asked to evaluate the proposed acquisition of a new Machine for your company.  The…

A: Net present value is the sum of present value of cash flows. Present value = cash flows/(1+discount…

Q: Am. 140.

A: To determine whether XYZ Manufacturing should purchase the new machine, we'll conduct a Net Present…

Q: You must evaluate a proposal to buy a new milling machine. The purchase price of the milling…

A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…

Q: You must evaluate a proposal to buy a new milling machine. The purchase price of the milling…

A: Honor Code- Since you have posted a question with multiple sub-parts, we will solve the first three…

Q: A new machine can be purchased for $1,500,000. It will cost $45,000 to ship and $55,000 to install…

A: Given Cost of machine = $1500000 cost to ship = $45000

Q: Rust Industrial Systems Company is trying to decide between two different conveyor belt systems.…

A: Step-by-Step SolutionSystem A:System B:Explanation:Summary of EAC for Both Systems:EAC for System A:…

Q: w machine costing $150,000 is expected to save the McKaig Brick Company $11,000 per year for 5 years…

A: The cash flow from the project are the after tax benefits of equipment and the benefit of…

Q: The initial cost of one customized machine is $675,000 with an annual operating cost of $14,800, and…

A: The objective of this question is to calculate the equivalent annual cost of a machine given its…

Q: A machine costs $100,000 and generates $25,000 of pre-tax operating income per year.  The tax rate…

A: The NPV of an asset is used to measure its profitability by discounting the future cash flows to…

Q: Corf's Dog House is considering the installation of a new computerized pressure cooker for hot dogs.…

A: Increase in sales$9,500Annual operating cost$13,300Purchase and installation cost$50,100Estimated…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.