Contemporary Engineering Economics (6th Edition)
Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 10, Problem 32P

a.

To determine

The PW’s cost of leasing in present worth.

b.

To determine

The PW’s cost of owning in present worth.

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A company is looking at purchasing a new Zeiss CMM (precision measurement machine). They believe having this machine will allow them to get a new contract. The machine would cost $525,000. It would allow the manufacturer to produce 250 custom engine block heads per day (350 days per year) at a gross profit of $1.95 each, but the company would have to pay tax of 25% on their profit. Assuming you looked at everything on a yearly basis and that the project would go on for 5 years, what is the rate of return (%) on this project? (round to the nearest tenth of a percent) 3.5% 9.5% 7.0% 7.5%
Following are transactions for Ridge Company. March 21 Accepted a $13,500, 180-day, 9% note from Tamara Jackson in granting a time extension on her past-due account receivable. September 17 Jackson dishonored her note. December 31 After trying several times to collect, Ridge Company wrote off Jackson's account against the Allowance for Doubtful Accounts. Complete the table to calculate the interest amounts at September 17 and use the calculated value to prepare your journal entries. Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar. Use 360 days a year. Complete this question by entering your answers in the tabs below. Interest Amounts General Journal Complete the table to calculate the interest amounts at September 17. Total Through Principal Rate (%) Time Total interest Maturity
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