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4. A construction company has the option to purchase a new piece of equipment for a...
A construction company is considering whether to lease or buy equipment for its new 4-year projec...
please answer them all and mark the answers . thanks
A construction company is considering whether to lease or buy equipment for its new 4-year project. If they buy the equipment, it will have an initial investment cost of $630,000 with annual costs of $42.000. At the end of the 4 years the equipment can be sold for an estimated $378,000. For tax purposes, the company will use MACRS-ADS depreciation on the equipment. If they decide to lease, it will...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: Initial investment .............. ? Annual cost savings ............. $20,000 Salvage value in 6 years ........ 20% of original cost of the equipment Repair in 4 years ............... $14,000 Cost of capital ................. 10% Life of project ................. 6 years The net present value of this new equipment was -$37,779. Calculate the salvage value for this piece of equipment.
Another department has selected a new piece of equipment to replace an old piece of equipment...
Another department has selected a new piece of equipment to
replace an old piece of equipment in your plant. You have been
asked to estimate the economic life of the new piece of equipment
and the EAC for that economic life. Additionally, you have been
asked to estimate what the marginal cost is to keep the existing
piece of equipment for an additional year. You have been provided
the following details. Your firm’s interest rate is 9%. The
purchase price...
Paccione Paving is considering purchasing a unique piece of equipment for a road construction project that...
Paccione Paving is considering purchasing a unique piece of equipment for a road construction project that will last five years. At the end of the five-year project, Paccione will no longer need the equipment. The equipment will cost $1,225,000, will be depreciated straight-line over seven years, and will be sold for $415,000 at the end of the project. The project will generate additional revenues of $750,000 with annual expenses of $165,000. The project will require an initial investment in net...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: Initial investment ........ Annual cost savings Salvage value in 6 years .. Repair in 4 years ....... Cost of capital Life of project .. $20,000 20% of original cost of the equipment $14,000 10% 6 years The net present value of this new equipment was -$37,779. Calculate the salvage value for this piece of equipment. You will need to...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: Initial investment .............. ? Annual cost savings ............. $20,000 Salvage value in 6 years ........ 20% of original cost of the equipment Repair in 4 years ............... $14,000 Cost of capital ................. 10% Life of project ................. 6 years The net present value of this new equipment was -$37,779. Calculate the salvage value for this piece of equipment. You...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: Initial investment ........ Annual cost savings Salvage value in 6 years .. Repair in 4 years ....... Cost of capital Life of project .. $20,000 20% of original cost of the equipment $14,000 10% 6 years The net present value of this new equipment was -$37,779. Calculate the salvage value for this piece of equipment. You will need to...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: Initial investment ........ Annual cost savings Salvage value in 6 years .. Repair in 4 years ....... Cost of capital Life of project .. $20,000 20% of original cost of the equipment $14,000 10% 6 years The net present value of this new equipment was -$37,779. Calculate the salvage value for this piece of equipment. You will need to...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: Initial investment Annual cost savings $20,000 Salvage value in 6 years 20% of original cost of the equipment Repair in 4 years Cost of capital $14,000 10% Life of project 6 years The net present value of this new equipment was -$37, 779 Calculate the salvage value for this piece of equipment. You will need to use the time...
A piece of equipment used in a manufacturing plant that costs 220,000 to purchase has the economi...
A piece of equipment used in a manufacturing plant that costs 220,000 to purchase has the economic data shown in the table below including the market value if the equipment was sold at the end of the period of use. Apply an interest rate of 9.0% to answer the questions that follow the data. Period 1 2 3 4 5 Operating Cost 45,000 56,000 70,000 85,000 98,000 Market Value 160,000 125,000 105,000 45,000 15,000 a. What is the period cost...
please answer them all and mark the answers . thanks
A construction company is considering whether to lease or buy equipment for its new 4-year project. If they buy the equipment, it will have an initial investment cost of $630,000 with annual costs of $42.000. At the end of the 4 years the equipment can be sold for an estimated $378,000. For tax purposes, the company will use MACRS-ADS depreciation on the equipment. If they decide to lease, it will...
Another department has selected a new piece of equipment to
replace an old piece of equipment in your plant. You have been
asked to estimate the economic life of the new piece of equipment
and the EAC for that economic life. Additionally, you have been
asked to estimate what the marginal cost is to keep the existing
piece of equipment for an additional year. You have been provided
the following details. Your firm’s interest rate is 9%. The
purchase price...
Paccione Paving is considering purchasing a unique piece of equipment for a road construction project that will last five years. At the end of the five-year project, Paccione will no longer need the equipment. The equipment will cost $1,225,000, will be depreciated straight-line over seven years, and will be sold for $415,000 at the end of the project. The project will generate additional revenues of $750,000 with annual expenses of $165,000. The project will require an initial investment in net...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: Initial investment ........ Annual cost savings Salvage value in 6 years .. Repair in 4 years ....... Cost of capital Life of project .. $20,000 20% of original cost of the equipment $14,000 10% 6 years The net present value of this new equipment was -$37,779. Calculate the salvage value for this piece of equipment. You will need to...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: Initial investment ........ Annual cost savings Salvage value in 6 years .. Repair in 4 years ....... Cost of capital Life of project .. $20,000 20% of original cost of the equipment $14,000 10% 6 years The net present value of this new equipment was -$37,779. Calculate the salvage value for this piece of equipment. You will need to...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: Initial investment ........ Annual cost savings Salvage value in 6 years .. Repair in 4 years ....... Cost of capital Life of project .. $20,000 20% of original cost of the equipment $14,000 10% 6 years The net present value of this new equipment was -$37,779. Calculate the salvage value for this piece of equipment. You will need to...
XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: Initial investment Annual cost savings $20,000 Salvage value in 6 years 20% of original cost of the equipment Repair in 4 years Cost of capital $14,000 10% Life of project 6 years The net present value of this new equipment was -$37, 779 Calculate the salvage value for this piece of equipment. You will need to use the time...
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