0 out of 15 Data center X: Cost of purchase is 500,000; cost of installation is...
10.2 California Imaging Center, a not-for-profit business, is evaluating the purchase of new diagnostic equipment. The equipment which costs $600,000, has an expected life of five years and an estimated salvage value of $200,000 at that time. The equipment is expected to be used 15 times a day for 250 days a year for cach year of the project's life. On average, cach procedure is projected to generate $80 in cash collections during the first year of use. Thus, net...
The purchase price of a new printing press is $16,000 with $3,800 in installation cost and would have a salvage value that can be estimated using a declining balance approach with d=21%. Operating and maintenance costs will be $4,220 this year and will increase by $85 per year. If the company's MARR is 10%, what is the EAC if the press is kept for 6 years? Use a positive sign convension for your answer, i.e EAC will be >0 and...
4) The total expenditure for installation of plumbing system with 10 years life period pump in a residential building is 5000 OMR. The initial cost of the pump without installation charge is bought through bank loan (CI) with fixed interest rate in a year 4% and payback period is 48 months, installation cost of pump is 200 OMR, operating cost is 2000 Baiza /Week, and Maintenance cost is 5 OMR/month, labor cost is 20 OMR/year and two time pump part...
Lease versus purchase
JLB Corporation is attempting to determine whether to
lease or purchase research equipment. The firm is in the 21% tax
bracket, and its after-tax cost of debt is currently 9%. The
terms of the lease and of the purchase are as follows:
Lease : Annual end-of-year lease payments of $31,000 are required
over the 3-year life of the lease. All maintenance costs will be
paid by the lessor; insurance and other costs will be borne by the...
PLEASE SHOW ALL WORK AND CALCULATIONS.
California Health Center, for-profit hospital, is evaluating the purchase of new diagnostic equipment. The equipment, which costs $600,000, has an expected life of five years and an estimated pretax salvage value of $200,000 at that time. The equipment is expected to be used 15 times a day for 250 days a year for each year of the project's life. On average, each procedure is expected to generate $80 in collections, which is net of...
Georgia Health Center, a for profit hospital, is evaluating the purchase of a new diagnostic equipment. The equipment, which cost $600,000, has an expected life of five years and an estimated pretax salvage value of $200,000 at that time. The equipment is expected to be used 15 times a day for 250 days a year for each year of the project’s life. On average, each procedure is expected to generate $80 in collections, which is net of bad debt losses...
Differential Analysis for a Lease or Buy Decision Sloan Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $3,020. The freight and installation costs for the equipment are $660. If purchased, annual repairs and maintenance are estimated to be $400 per year over the four-year useful life of the equipment. Alternatively, Sloan can lease the equipment from a domestic supplier for $1,460 per year for four years, with no additional costs. Prepare a differential...
Subaru of Indiana Automotive has an overhead crane that has an estimated remaining life of 10 years. The crane can be sold now for $9,000. If the crane is kept in service, it must be overhauled immediately at a cost of $5,500. Operating and maintenance costs will be $3,000 per year after the crane is overhauled. The overhauled crane will have zero MV at the end of the 8-year study period. A new crane will cost $20,000, will last for...
Palmer Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $100,000. The equipment will have an initial cost of $400,000 and have a 7-year life. If the salvage value of the equipment is estimated to be $75,000, what is the payback period? 2.73 years 7.00 years 4.00 years 4.75 years
A large standby electricity generator in a hospital operating room has a first cost of $72,750 and may be used for a maximum of 6 years. Its salvage value, which decreases by 15% per year, is described by the equation S=72,750(1 - 0.15)", where n is the number of years after purchase. The operating cost of the generator will be constant at $6,000 per year, and the interest rate is 12% per year. Determine the economic service life and associated...