Homework Answers
We can use the present value of annuity formula (PVA) to find the equivalent annual cost:
Where,
A = is the annual maintenance cost
i = discounting rate
n = number of periods
11.
d. $38,038.39
12.
Same formula;
a. $34,117.08
Another way to do it: (Tabular Method)
You can chose any method.
i = rate of discounting
n = number of periods
Add Answer to:
11 and 12
lation for the next 2 questions. Please use the following information for the...
13,14,15 313750 PV Costs 15 years Machine A Machine B $75,500 are the same functions, have...
13,14,15
313750 PV Costs 15 years Machine A Machine B $75,500 are the same functions, have The machines, A and, which Bowing costs and lives Life $105,000 8 years DOO Ir the cost of capital were 250, which machine would you chooser 2. Machine A because the EAC(equivalent annual cost) is $27.20 527,207.27. Machine because the EAC equivalent annual cost) is $9346.50. Machine A because the EAC equivalent annual cost) is $7000.00. d. Machine B because the EAC equivalent annual...
Please, I need it within 20 minutes. solve and post the value ASAP 3. "Machine A...
Please, I need it within 20 minutes. solve and post the value ASAP 3. "Machine A costs $24,000 to purchase and is worth $9,000 in 4 years at the end of its service life. Machine B costs $20,000 to purchase and is worth $3,000 in 4 years at the end of its service life. Assume that these machines are needed for 4 years (required service period). Each machine can be repurchased at the same price in the future, and assume...
26,27,28,29,30 26. The following table owing table gives the available protects (in millions) for A B...
26,27,28,29,30
26. The following table owing table gives the available protects (in millions) for A B C D E E g 50 20 0 0 0 20 Initial income 100 70 65 10 30 32 10 NPV company can obtenumit of 170 million to invest what is the maximum NPV the If the firm has a limit of 170 million a. $210 b. $275 C. $307 d. $317 e. $347 Please Show Your Calculation Steps Below 27. Exxon Mobile owns...
Question 2 1 pts "Your company needs a machine for the next 20 years. You are considering two different machine...
Question 2 1 pts "Your company needs a machine for the next 20 years. You are considering two different machines. Machine A Installation cost: $4,300,000 Annual O&M costs: $91,000 Service life (years): 20 Salvage value: $62,000 Annual income taxes: $48,000 Machine B Installation cost: $20,000,000 Annual 0&M costs: $105,000 Service life (years): 10 Salvage value: $44,000 Annual income taxes: $36,000 If your company's MARR is 16%, determine which machine you should buy. Assume that machine B will be available in...
Answer question 1,2,3 please 2. (Total 3.5 Points) Hindustan Motors is considering the purchase of one...
Answer question 1,2,3 please
2. (Total 3.5 Points) Hindustan Motors is considering the purchase of one of two machines required in its production process. Machine A has a life of two years. Machine A costs $50 initially and then $70 per year in maintenance. Machine B has an initial cost of $90. It requires $40 in maintenance for each year of its three-year life. Either machine must be replaced at the end of its life. The costs are expressed in...
9 and 10 Use the following information for the next 2 questions. Frieda Inc. is considering...
9 and 10
Use the following information for the next 2 questions. Frieda Inc. is considering a capital expansion project. The initial investment of undertaking this project is $114,500. This expansion project will last for five ears. The net operating cash flows from the expansion project at the end of year 1, 2, 3, 4 and 5 are estimated to be $19,850, $24,780, $33,960, $51,236 and $55,780 respectively. Frieda's cost of capital is 18%. 9. What is the NPV of...
6A. You can continue to use your less efficient machine at a cost of $20,000 annually for the next five years. Alte...
6A. You can continue to use your less efficient machine at a cost of $20,000 annually for the next five years. Alternatively, you can purchase a 5-year more efficient machine for $30,000 plus $10,000 annual maintenance. At a cost of capital of 15%, The EAC of the new machine will be ............... than that of the old machine by $............ greater/lower 6B. You can continue to use your less efficient machine at a cost of $10,000 annually for the next...
please show details. thank you Use the information below to answer the following two questions: Chamomile...
please show details. thank you
Use the information below to answer the following two questions: Chamomile Inc. is a manufacturing company whose total manufacturing overhead costs fluctuate somewhat from month to month according to the number of machine-hours worked in its production facility. These costs for the last four months in 2019 are given helow. September October November December Machine-hours 6.500 9.000 -5.000 10,000 Total manufacturing overhead $ 62.500 S 70.500 S 55.000 $ 70,000 The manufacturing overhead costs above...
USE THE FOLLOWING INFORMATION FOR THE NEXT 4 QUESTIONS ABC Company is considering the purchase of...
USE THE FOLLOWING INFORMATION FOR THE NEXT 4 QUESTIONS ABC Company is considering the purchase of a new machine that would cost $500,000. The machine would have a useful life of 10 years. ABC Company plans on using straight-line depreciation with an estimated salvage value of $0. ABC Company has a hurdle rate of 10% and is subject to an income tax rate of 40%. The annual cash income is estimated to be $125.000 PV TABLES CAN BE FOUND ON...
FlowE, Inc. must buy a new flow cytometry machine to conduct its cell sorting experiments. FlowE,...
FlowE, Inc. must buy a new flow cytometry machine to conduct its cell sorting experiments. FlowE, Inc. is deciding between 2 machines to purchase - Machine A or Machine B. The annual maintenance costs over 9 years for the 2 machines are below. In addition, Machine A has an initial purchasing cost of $10,500 and will require a repair and overhaul in Year 4 that will cost $850. Machine B has an initial cost of $9,750 and will require a...
13,14,15
313750 PV Costs 15 years Machine A Machine B $75,500 are the same functions, have The machines, A and, which Bowing costs and lives Life $105,000 8 years DOO Ir the cost of capital were 250, which machine would you chooser 2. Machine A because the EAC(equivalent annual cost) is $27.20 527,207.27. Machine because the EAC equivalent annual cost) is $9346.50. Machine A because the EAC equivalent annual cost) is $7000.00. d. Machine B because the EAC equivalent annual...
26,27,28,29,30
26. The following table owing table gives the available protects (in millions) for A B C D E E g 50 20 0 0 0 20 Initial income 100 70 65 10 30 32 10 NPV company can obtenumit of 170 million to invest what is the maximum NPV the If the firm has a limit of 170 million a. $210 b. $275 C. $307 d. $317 e. $347 Please Show Your Calculation Steps Below 27. Exxon Mobile owns...
Question 2 1 pts "Your company needs a machine for the next 20 years. You are considering two different machines. Machine A Installation cost: $4,300,000 Annual O&M costs: $91,000 Service life (years): 20 Salvage value: $62,000 Annual income taxes: $48,000 Machine B Installation cost: $20,000,000 Annual 0&M costs: $105,000 Service life (years): 10 Salvage value: $44,000 Annual income taxes: $36,000 If your company's MARR is 16%, determine which machine you should buy. Assume that machine B will be available in...
Answer question 1,2,3 please
2. (Total 3.5 Points) Hindustan Motors is considering the purchase of one of two machines required in its production process. Machine A has a life of two years. Machine A costs $50 initially and then $70 per year in maintenance. Machine B has an initial cost of $90. It requires $40 in maintenance for each year of its three-year life. Either machine must be replaced at the end of its life. The costs are expressed in...
9 and 10
Use the following information for the next 2 questions. Frieda Inc. is considering a capital expansion project. The initial investment of undertaking this project is $114,500. This expansion project will last for five ears. The net operating cash flows from the expansion project at the end of year 1, 2, 3, 4 and 5 are estimated to be $19,850, $24,780, $33,960, $51,236 and $55,780 respectively. Frieda's cost of capital is 18%. 9. What is the NPV of...
6A. You can continue to use your less efficient machine at a cost of $20,000 annually for the next five years. Alternatively, you can purchase a 5-year more efficient machine for $30,000 plus $10,000 annual maintenance. At a cost of capital of 15%, The EAC of the new machine will be ............... than that of the old machine by $............ greater/lower 6B. You can continue to use your less efficient machine at a cost of $10,000 annually for the next...
please show details. thank you
Use the information below to answer the following two questions: Chamomile Inc. is a manufacturing company whose total manufacturing overhead costs fluctuate somewhat from month to month according to the number of machine-hours worked in its production facility. These costs for the last four months in 2019 are given helow. September October November December Machine-hours 6.500 9.000 -5.000 10,000 Total manufacturing overhead $ 62.500 S 70.500 S 55.000 $ 70,000 The manufacturing overhead costs above...
USE THE FOLLOWING INFORMATION FOR THE NEXT 4 QUESTIONS ABC Company is considering the purchase of a new machine that would cost $500,000. The machine would have a useful life of 10 years. ABC Company plans on using straight-line depreciation with an estimated salvage value of $0. ABC Company has a hurdle rate of 10% and is subject to an income tax rate of 40%. The annual cash income is estimated to be $125.000 PV TABLES CAN BE FOUND ON...
FlowE, Inc. must buy a new flow cytometry machine to conduct its cell sorting experiments. FlowE, Inc. is deciding between 2 machines to purchase - Machine A or Machine B. The annual maintenance costs over 9 years for the 2 machines are below. In addition, Machine A has an initial purchasing cost of $10,500 and will require a repair and overhaul in Year 4 that will cost $850. Machine B has an initial cost of $9,750 and will require a...
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