Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs...

Question

Question

Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs associated with one

business economics

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

ANSWER:

In order to find the rate of return we will equate the pw to zero.

pw = first cost + annual costs(p/a,i,n) + annual revenue(p/a,i,n) + salvage value(p/f,i,n)

0 = - 21,000 - 19,000(p/a,i,5) + 30,000(p/a,i,5) + 5,000(p/f,i,5)

0 = - 21,000 + 11,000(p/a,i,5) + 5,000(p/f,i,5)

21,000 = 11,000(p/a,i,5) + 5,000(p/f,i,5)

solving via trial and error we get that i is between 46% and 47% and solving further we get that i is 46.18%

so the rate of return is 46.18%

Add a comment

Answer 2

Similar Homework Help Questions

Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs associated with...

Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs associated with one product line were as follows: first cost of $22,000, and annual costs of $19,000. Annual revenue was $26,000 and the used equipment was salvaged for $6,000. What rate of return did the company make on this product?
Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs...

Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs associated with one product line were as follows: first cost of $25,000, and annual costs of $16,000. Annual revenue was $25,000 and the used equipment was salvaged for $4,000. What rate of return did the company make on this product? The rate of return that the company made on the product is
Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs associated...

Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs associated with one product line were as follows: first cost of $20,000, and annual costs of $18,000 Annual revenue was $26,000 and the used equipment was salvaged for $4,000. What rate of return did the company make on this product? The rate of return that the company made on the product is %.

Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year perlod, the costs...

Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year perlod, the costs associated with one product line were as follows: first cost of $20,000, and annual costs of $16,000. Annual revenue was $29,000 and the used equipment was salvaged for $10,000. What rate of return did the company make on this product? The rate of return that the company made on the product is
i tried 5% and 25% it is wrong? should i use interpolation? if so, how? Swagelok...

i tried 5% and 25% it is wrong? should i use interpolation? if so, how? Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs associated with one product line were as follows: first cost of $22,000, and annual costs of $18,000. Annual revenue was $27.000 and the used equipment was salvaged for $5,000. What rate of return did the company make on this product? The rate of return that the company made on...
I need help with question 7.12. I looked at the step-by-step solution for that one but someone posted a comment saying...

I need help with question 7.12. I looked at the step-by-step solution for that one but someone posted a comment saying that the answer is wrong and no one has commented on what the correct answer should be 201 Problems Determination of ROR 7.7 If a manufacturer of slectronic devices invests S650,000 in equipment for making compact piezo electric accelerometers for general purpose vibra Lion measurement estimate the rate of return from revenue of $225.000 per year for 10 years...

Determine the ROR based on 5-year period for a production line if, the costs associated with...

Determine the ROR based on 5-year period for a production line if, the costs associated with producing a certain product were as the following: Initial cost = SR 24,000 AOC = SR 17, 000 Annual revenue = SR 27, 000
Costs associated with the manufacture of miniature high-sensitivity piezoresistive pressure transducers is $76,000 per year. A...

Costs associated with the manufacture of miniature high-sensitivity piezoresistive pressure transducers is $76,000 per year. A clever industrial engineer found that by spending $20,000 now to reconfigure the production line and reprogram two of the robotic arms, the cost will go down to $51,000 next year and $50,000 in years 2 through 5. Using an interest rate of 13% per year, determine the present worth of the savings due to the reconfiguration. The present worth of the savings is determined...
Exercise 25-8 Payback period and accounting rate of return on investment LO P1, P2 B2B Co....

Exercise 25-8 Payback period and accounting rate of return on investment LO P1, P2 B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $216,000 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 86,400 units of the equipment's product each year. The expected annual income related to this equipment follows....

Exercise 24-8 Payback period and accounting rate of return on investment LO P1, P2 B2B Co....

Exercise 24-8 Payback period and accounting rate of return on investment LO P1, P2 B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $240,000 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 96,000 units of the equipment's product each year. The expected annual income related to this equipment follows....

Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs...

Homework Answers

Add Answer to:
Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs...

Post as a guest

Earn Coins