A division of Sunland Manufacturing is considering purchasing for $1,680,000 a machine that automates the process...
Homework Answers
Net Present Value = Present Value of Cash Inflow - Present Value of Cash Outflow
If Net Present Value is positive, we should accept the project and if it is negative, we should reject the project.
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A division of Sunland Manufacturing is considering purchasing
for $1,680,000 a machine that automates the process...
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Self-Study Problem 10.03 a1-a2 (Part Level Submission) Sunland Corp. management is considering purchasing a machine that...
Self-Study Problem 10.03 a1-a2 (Part Level
Submission)
Sunland Corp. management is considering purchasing a machine that
will cost $117,250 and will be depreciated on a straight-line basis
over a five-year period. The sales and expenses (excluding
depreciation) for the next five years are shown in the following
table. The company’s tax rate is 34 percent.
Year 1
Year 2
Year 3
Year 4
Year 5
Sales
$123,450
$181,875
$240,455
$258,440
$267,125
Expenses
$143,410
$124,488
$146,289
$138,112
$137,556
Sunland will accept...
Sunland Corp. is considering purchasing one of two new processing machines. Either machine would make it...
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Daily Enterprises is purchasing a $10.43 million machine. It will cost $70,093.00 to transport and install the machine. The machine has a depreciable life of five years using the straight-line depreciation and will have no salvage value. The machine will generate incremental revenues of $4.28 million per year along with incremental costs of $1.50 million per year. Daily's marginal tax rate is 35.00%. The cost of capital for the firm is 13.00%. (answer in dollars. so convert millions to dollars)...
Self-Study Problem 10.03 a1-a2 (Part Level
Submission)
Sunland Corp. management is considering purchasing a machine that
will cost $117,250 and will be depreciated on a straight-line basis
over a five-year period. The sales and expenses (excluding
depreciation) for the next five years are shown in the following
table. The company’s tax rate is 34 percent.
Year 1
Year 2
Year 3
Year 4
Year 5
Sales
$123,450
$181,875
$240,455
$258,440
$267,125
Expenses
$143,410
$124,488
$146,289
$138,112
$137,556
Sunland will accept...
Sunland Corp. is considering purchasing one of two new processing machines. Either machine would make it possible for the company to produce its products more efficiently than it is currently equipped to do. Estimates regarding each machine are provided below. Machine A Machine B Original cost $113,200 $269,600 Estimated life 10 years 10 years Salvage value Estimated annual cash inflows $29,800 $60,300 Estimated annual cash outflows $7,600 $15.000 Calculate the net present value and profitability index of each machine. Assume...
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