A forklift will last for only 3 more years. It costs $6,700 a year to maintain....
A forklift will last for only 3 more years. It costs $6,700 a year to maintain. For $22,000 you can buy a new lift that can last for 12 years and should require maintenance costs of only $3,700 a year.
a-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 5% per year. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
a-2. Should you replace the forklift?
b-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 12% per year. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
b-2. Should you replace the forklift?
Homework Answers
Leave thumbs up please , let me know if you need any further information regarding the question
Add Answer to:
A forklift will last for only 3 more years. It costs $6,700 a year
to maintain....
A precision lathe costs $30,000 and will cost $40,000 a year to operate and maintain. If...
A precision lathe costs $30,000 and will cost $40,000 a year to operate and maintain. If the discount rate is 10% and the lathe will last for 5 years, what is the equivalent annual cost of the tool? (Do not round intermediate calculations. Round your answer to 2 decimal places. Enter your answer as a positive value.)
Please, I won't get a and b right. Thank you! Problem 6-31 Equivalent annual costs The...
Please, I won't get a and b
right. Thank you!
Problem 6-31 Equivalent annual costs The president's executive jet is not fully utilized. You judge that its use by other officers would increase direct operating costs by only $22,000 a year and would save $100,000 a year in airline bills. On the other hand, you believe that with the increased use the company will need to replace the jet at the end of three years rather than four. A new...
You are operating an old machine that is expected to produce a cash inflow of $5,000...
You are operating an old machine that is expected to produce a cash inflow of $5,000 in each of the next 3 years before it fails. You can replace it now with a new machine that costs $20,000 but is much more efficient and will provide a cash flow of $10,000 a year for 4 years. Calculate the equivalent annual cost of the new machine if the discount rate is 15%. (Do not round intermediate calculations. Round your answer to...
I only need the NPV part of this question Suppose we are thinking about replacing an...
I only need the NPV part of
this question
Suppose we are thinking about replacing an old computer with a new one. The old one cost us $1,350,000; the new one will cost $1,610,000. The new machine will be depreciated straight-line to zero over its five-year life. It will probably be worth about $350,000 after five years. The old computer is being depreciated at a rate of $270,000 per year. It will be completely written off in three years. If...
The president's executive jet is not fully utilized. You judge that its use by olher officers...
The president's executive jet is not fully utilized. You judge that its use by olher officers would increase direct operating costs by only $22,000 a year and would save $100,000 a year in airline bills. On the ather hand, yau believe that with the increased use the company will need to replace the jet at the end of three years rather than four. A new jet costs $1.19 mland (at its current low rate of use) has a life of...
Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in...
Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in its factory. Because both forklifts perform the same function, the firm will choose only one. (They are mutually exclusive investments.) The electric-powered truck will cost more, but it will be less expensive to operate; it will cost $22,000, whereas the gas-powered truck will cost $17,500. The cost of capital that applies to both investments is 12%. The life for both types of truck is...
Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in its fa...
Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in its factory. Because both forklifts perform the same function, the firm will choose only one. (They are mutually exclusive investments.) The electric-powered truck will cost more, but it will be less expensive to operate; it will cost $23,000, whereas the gas-powered truck will cost $17,100. The cost of capital that applies to both investments is 11%. The life for both types of truck is...
NEO A project that costs $3,700 to install will provide annual cash flows of $1150 for...
NEO A project that costs $3,700 to install will provide annual cash flows of $1150 for each of the next 6 years. a. What is NPV if the discount rate is 11%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) NPV b. How high can the discount rate be before you would reject the project? (Do not round Intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Discount rate 5
A new furnace for your small factory will cost $40,000 and a year to install, will...
A new furnace for your small factory will cost $40,000 and a year to install, will require ongoing maintenance expenditures of $2,800 a year. But it is far more fuel-efficient than your old furnace and will reduce your consumption of heating oil by 3,700 gallons per year. Heating oil this year will cost $3 a gallon; the price per gallon is expected to increase by $0.50 a year for the next 3 years and then to stabilize for the foreseeable...
Kristen Lu purchased a used automobile for $22,000 at the beginning of last year and incurred...
Kristen Lu purchased a used automobile for $22,000 at the beginning of last year and incurred the following operating costs: Depreciation ($22,000 = 5 years) Insurance Garage rent Automobile tax and license Variable operating cost $ 4,400 $ 2,300 $ 1,200 $ 600 $ 0.09 per mile The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage, the car will have zero resale value in five years, so the...
Please, I won't get a and b
right. Thank you!
Problem 6-31 Equivalent annual costs The president's executive jet is not fully utilized. You judge that its use by other officers would increase direct operating costs by only $22,000 a year and would save $100,000 a year in airline bills. On the other hand, you believe that with the increased use the company will need to replace the jet at the end of three years rather than four. A new...
I only need the NPV part of
this question
Suppose we are thinking about replacing an old computer with a new one. The old one cost us $1,350,000; the new one will cost $1,610,000. The new machine will be depreciated straight-line to zero over its five-year life. It will probably be worth about $350,000 after five years. The old computer is being depreciated at a rate of $270,000 per year. It will be completely written off in three years. If...
The president's executive jet is not fully utilized. You judge that its use by olher officers would increase direct operating costs by only $22,000 a year and would save $100,000 a year in airline bills. On the ather hand, yau believe that with the increased use the company will need to replace the jet at the end of three years rather than four. A new jet costs $1.19 mland (at its current low rate of use) has a life of...
NEO A project that costs $3,700 to install will provide annual cash flows of $1150 for each of the next 6 years. a. What is NPV if the discount rate is 11%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) NPV b. How high can the discount rate be before you would reject the project? (Do not round Intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Discount rate 5
Kristen Lu purchased a used automobile for $22,000 at the beginning of last year and incurred the following operating costs: Depreciation ($22,000 = 5 years) Insurance Garage rent Automobile tax and license Variable operating cost $ 4,400 $ 2,300 $ 1,200 $ 600 $ 0.09 per mile The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage, the car will have zero resale value in five years, so the...
Most questions answered within 3 hours.
-
The x component of the velocity of an object vibrating
along the x-axis obeys the equation...
asked 41 minutes ago -
A junction box contains two trade size 2 raceways on the left
side, and two trade...
asked 1 hour ago -
Atmospheric Mass
Venus and Earth have about the same mass and radius, but the
atmospheric pressure...
asked 1 hour ago -
5. Discuss the use of fault tree analysis (FTA) for risk
assessment (maximum one paragraph).
asked 2 hours ago -
Given that a sample of aluminium oxide has a Young's modulus of
393 GPa and a...
asked 4 hours ago -
At a certain temperature, the equilibrium constant, Kc, for this
reaction is 53.3.
H2(g)+I2(g)−⇀↽−2HI(g)Kc=53.3
At this...
asked 5 hours ago -
Question1 ) The STL provides similiar classes called stack and
queue, both of which gave functions...
asked 6 hours ago -
For Questions 1-4, assume you have 5 bits available:
1. For (positive) integers: What is the...
asked 6 hours ago -
convert grams into vloume with the density of water being at
.997514 g/cm^3 at 23.1 Celsuis...
asked 8 hours ago -
Foreman company obtained a $20,000, 6% loan on May 1, 2018.
Principal and interest will be...
asked 8 hours ago -
5. Problem 11.05 (Discounted Payback)
eBook
Project L costs $60,000, its expected cash inflows are $14,000
per...
asked 9 hours ago -
1. Which of the following is true about politics and health
organizations?
A. Health organizations are...
asked 9 hours ago