Whether company should replace the old machine or not. Replacement Analysis: The analysis of the replacement of assets of the company is the replacement analysis. To reduce the cost of the company management take decision to replace the existing asset. The incremental cash flow is calculated while taking replacement decision. Net present Value (NPV): NPV is the technique of capital budgeting. To select the project or not is dependent on the NPV of the project. If the project has positive NPV than accept the project, if the NPV is negative than reject the project.

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Answer 1

Question

Chapter 12, Problem 10P

Summary Introduction

To identify: Whether company should replace the old machine or not.

Replacement Analysis:

The analysis of the replacement of assets of the company is the replacement analysis. To reduce the cost of the company management take decision to replace the existing asset. The incremental cash flow is calculated while taking replacement decision.

Net present Value (NPV):

NPV is the technique of capital budgeting. To select the project or not is dependent on the NPV of the project. If the project has positive NPV than accept the project, if the NPV is negative than reject the project.

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Answer 2

Question

Chapter 12, Problem 10P

Summary Introduction

To identify: Whether company should replace the old machine or not.

Replacement Analysis:

The analysis of the replacement of assets of the company is the replacement analysis. To reduce the cost of the company management take decision to replace the existing asset. The incremental cash flow is calculated while taking replacement decision.

Net present Value (NPV):

NPV is the technique of capital budgeting. To select the project or not is dependent on the NPV of the project. If the project has positive NPV than accept the project, if the NPV is negative than reject the project.

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Answer 3

Question

Chapter 12, Problem 10P

Summary Introduction

To identify: Whether company should replace the old machine or not.

Replacement Analysis:

The analysis of the replacement of assets of the company is the replacement analysis. To reduce the cost of the company management take decision to replace the existing asset. The incremental cash flow is calculated while taking replacement decision.

Net present Value (NPV):

NPV is the technique of capital budgeting. To select the project or not is dependent on the NPV of the project. If the project has positive NPV than accept the project, if the NPV is negative than reject the project.

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Answer 4

Question

Chapter 12, Problem 10P

Summary Introduction

To identify: Whether company should replace the old machine or not.

Replacement Analysis:

The analysis of the replacement of assets of the company is the replacement analysis. To reduce the cost of the company management take decision to replace the existing asset. The incremental cash flow is calculated while taking replacement decision.

Net present Value (NPV):

NPV is the technique of capital budgeting. To select the project or not is dependent on the NPV of the project. If the project has positive NPV than accept the project, if the NPV is negative than reject the project.

Expert Solution & Answer

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Answer 5

Chapter 12, Problem 10P

Summary Introduction

To identify: Whether company should replace the old machine or not.

Replacement Analysis:

The analysis of the replacement of assets of the company is the replacement analysis. To reduce the cost of the company management take decision to replace the existing asset. The incremental cash flow is calculated while taking replacement decision.

Net present Value (NPV):

NPV is the technique of capital budgeting. To select the project or not is dependent on the NPV of the project. If the project has positive NPV than accept the project, if the NPV is negative than reject the project.

Answer 6

Chapter 12, Problem 10P

Summary Introduction

To identify: Whether company should replace the old machine or not.

Replacement Analysis:

The analysis of the replacement of assets of the company is the replacement analysis. To reduce the cost of the company management take decision to replace the existing asset. The incremental cash flow is calculated while taking replacement decision.

Net present Value (NPV):

NPV is the technique of capital budgeting. To select the project or not is dependent on the NPV of the project. If the project has positive NPV than accept the project, if the NPV is negative than reject the project.

Answer 7

Chapter 12, Problem 10P

Summary Introduction

To identify: Whether company should replace the old machine or not.

Replacement Analysis:

The analysis of the replacement of assets of the company is the replacement analysis. To reduce the cost of the company management take decision to replace the existing asset. The incremental cash flow is calculated while taking replacement decision.

Net present Value (NPV):

NPV is the technique of capital budgeting. To select the project or not is dependent on the NPV of the project. If the project has positive NPV than accept the project, if the NPV is negative than reject the project.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 12 - Prob. 1Q Ch. 12 - Prob. 2Q Ch. 12 - Explain why net operating working capital is...Ch. 12 - Why are interest charges not deducted when a...Ch. 12 - Prob. 5Q Ch. 12 - What are some differences in the analysis for a...Ch. 12 - Distinguish among beta (or market) risk,...Ch. 12 - Prob. 8Q Ch. 12 - Prob. 9Q Ch. 12 - If you were the CFO of a company that had to...

Solution Summary: The author explains that replacement analysis is the technique of capital budgeting. To select the project or not is dependent on the NPV.

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