Question

A company is considering buying a new piece of machinery that costs $30,000 and has a salvage value of $8,000 at the end of i
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Machine Cost: 30000; Salvage value= 8,000 Life = 5 years Annual Revenues = 5,000 MARR = 8% Calculate IRR. Calculating IRR usi

Add a comment
Know the answer?
Add Answer to:
A company is considering buying a new piece of machinery that costs $30,000 and has a...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • company is considering buying a new piece of machinery that costs $30,000 and has a value of $8,000 at the end of it...

    company is considering buying a new piece of machinery that costs $30,000 and has a value of $8,000 at the end of its 5-year useful life. The machinery nets $5,000 per year in ann venues. The internal rate of return (IRR) on this investment is between A 2%-3% salvage ual 2. : 11%-12%. C. 6%-7%. , D. 13%-14%. E. 4%-5%. company is considering buying a new piece of machinery that costs $30,000 and has a value of $8,000 at the...

  • A company is considering buying a new piece of machinery that costs $30,000 and has a...

    A company is considering buying a new piece of machinery that costs $30,000 and has a salvage value of $8,000 at the end of its 5-year useful life. The machinery nets $5,000 per year in annual revenues. MARR = 8%. The internal rate of return (IRR) on this investment is between A. 2%-3%. B. 11%-12%. C. 6%-7%. D. 13%-14%. E. 4%-5%. Using the information in the previous question #5, if the company considering purchasing the machine uses a MARR of...

  • Altman Corporation is considering investing $75,000 in a new piece of machinery that will generate net...

    Altman Corporation is considering investing $75,000 in a new piece of machinery that will generate net annual cash flows of $25,000 each year for the next 5 years. The machine has a salvage value of $8,000 at the end of its 5 year useful life. Altman's cost of capital and discount rate is 9%. What is the dollar amount that we would multiply the factor by when using the PV of an Annuity table? $125,000 $25,000 ООО $8,000 $75,000

  • Johnson Manufacturing is considering investing $80,000 in a new piece of machinery that will generate net...

    Johnson Manufacturing is considering investing $80,000 in a new piece of machinery that will generate net annual cash flows of $30,000 each year for the next 7 years. The machine has a salvage value of $10,000 at the end of its 7 year useful life. Johnson's cost of capital and discount rate is 8%. What is the dollar amount that we would multiply the factor by when using the PV of an Annuity table? $30,000 $80,000 o oo $10,000 $210,000...

  • Johnson Manufacturing is considering investing $80,000 in a new piece of machinery that will generate net annual cash fl...

    Johnson Manufacturing is considering investing $80,000 in a new piece of machinery that will generate net annual cash flows of $30,000 each year for the next 7 years. The machine has a salvage value of $10,000 at the end of its 7 year useful life. Johnson's cost of capital and discount rate is 8%. What is the dollar amount that we would multiply the factor by when using the PV of an Annuity table?

  • Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards more efficiently.

    Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards more efficiently. The punch has a first cost of $160,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value. Labor costs would increase $5,500 per year using the gang punch, but raw material costs would decrease $16,500 per year. MARR is 5%/year. What is the internal rate of return of this investment? What is...

  • 5.1Steelwell LLC. is considering buying a new extrusion machine. Listed below is the economic data for...

    5.1Steelwell LLC. is considering buying a new extrusion machine. Listed below is the economic data for the new investment Depreciable Capital - year 0 Salvage Value (FMV) (at the end of proiect life)-BV Non-depreciable Capital - vear 0 Non-depreciable Capital (returned at the end of $14,500 $3,500 $3,500 2 3 $4,500 $10,500 $2,000 2 $2,000 roiect life 4 5Expected Revenue ($ / yr 6 O&M Cost (/yr. 7 Useful life (vears Working Capital - year 0 Working Capital - (returned...

  • Silverberg Manufacturing is considering investing $90,000 in a new piece of machinery that will generate net...

    Silverberg Manufacturing is considering investing $90,000 in a new piece of machinery that will generate net annual cash flows of $40,000 each year for the next 4 years. The machine has a salvage value of $15.000 at the end of its 4 year useful life. Silverberg's cost of capital and discount rate is 6%. Which of the following tables and criteria should we use to discount the salvage value of the equipment? OPV of annuity table, n=4, i=6% O PV...

  • Vilas Company is considering a capital investment of $191,700 in additional productive facilities. The new machinery...

    Vilas Company is considering a capital investment of $191,700 in additional productive facilities. The new machinery is expected to have a useful life of 5 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $12,700 and $49,200, respectively. Vilas has a 12% cost of capital rate, which is the required rate of return on the investment. Click here to view...

  • Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit...

    Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards more efficiently. The punch has a first cost of $60,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value. Annual labor costs would increase $3,500 using the gang punch, but annual raw material costs would decrease $7,000. MARR is 4.75 %/year. 1.What is the present worth of this investment? 2.What is the...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT