You have purchased a canning machine for $7,000. You expect the machine to save your company $3,800 each year for the next 10 years. What is the profitability index of the machine? Use a discount rate of 11.5%.
You have purchased a canning machine for $7,000. You expect the machine to save your company...
One year ago, your company purchased a machine used in manufacturing for $ 121,000. You have learned that a new machine is available that offers many advantages and that you can purchase it for $171,000 today. The CCA rate applicable to both machines is 42%; neither machine will have any long-term salvage value. You expect that the new machine will produce earnings before interest, taxes, depreciation, and amortization (EBITDA) of $61,000 per year for the next 10 years. The current...
A local brewery is considering canning their product. A canning machine will cost them $15,000, last 3 years, and have a salvage value of $1,500. They anticipate increased monthly income of $425. Use a nominal annual discount rate of 10%. Should they buy the machine?
One year ago, your company purchased a machine used in manufacturing for $105,000. You have learned that a new machine is available that offers many advantages and that you can purchase it for $160,000 today. The CCA rate applicable to both machines is 40%; neither machine will have any long-term salvage value. You expect that the new machine will produce earnings before interest, taxes, depreciation, and amortization (EBITDA) of $60,000 per year for the next ten years. The current machine...
One year ago, your company purchased a machine used in manufacturing for $95,000. You have learned that a new machine is available that offers many advantages and that you can purchase it for $160,000 today. The CCA rate applicable to both machines is 40%; neither machine will have any long-term salvage value. You expect that the new machine will produce earnings before interest, taxes, depreciation, and amortization (EBITDA) of $45,000 per year for the next ten years. The current machine...
One year ago, your company purchased a machine used in manufacturing for $120,000.You have learned that a new machine is available that offers many advantages and you can purchase it for$150,000 today. It will be depreciated on a straight-line basis over 10 years and has no salvage value. You expect that the new machine will produce a gross margin (revenues minus operating expenses other than depreciation) of $50,000 per year for the next 10 years. The current machine is expected...
One year ago, your company purchased a machine used in manufacturing for $ 95,000. You have learned that a new machine is available that offers many advantages and you can purchase it for $ 150,000 today. It will be depreciated on a straight-line basis over 10 years and has no salvage value. You expect that the new machine will produce a gross margin (revenues minus operating expenses other than depreciation) of $ 55,000 per year for the next 10 years....
One year ago, your company purchased a machine used in manufacturing for S110,000. You have learned that a new machine is available that offers many advantages and that you can purchase it for S170,000 today. The CCA rate applicable to both machines is 30%; neither machine will have any long-term salvage value. You expect that the new machine will produce earnings before interest, taxes, depreciation, and amortization (EBITDA) of $60,000 per year for the next ten years. The current machine...
One year ago, your company purchased a machine used in manufacturing for $110,000. You have learned that a new machine is available that offers many advantages and you can purchase it for $140,000 today. It will be depreciated on a straight-line basis over 10 years and has no salvage value. You expect that the new machine will produce a gross margin (revenues minus operating expenses other than depreciation) of $60,000 per year for the next 10 years. The current machine...
One year ago, your company purchased a machine used in manufacturing for $90,000. You have learned that a new machine is available that offers many advantages and that you can purchase it for $170,000 today. The CCA rate applicable to both machines is 20%; neither machine will have any long-term salvage value. You expect that the new machine will produce earnings before interest, taxes, depreciation, and amortization (EBITDA) of $40,000 per year for the next 10 years. The current machine...
One year ago, your company purchased a machine used in manufacturing for $110,000. You have learned that a new machine is available that offers many advantages and that you can purchase it for $160,000 today. The CCA rate applicable to both machines is 40%; neither machine will have any long-term salvage value. You expect that the new machine will produce earnings before interest, taxes, depreciation, and amortization (EBITDA) of $45,000 per year for the next 10 years. The current machine...