ZuoTi.Pro
Question

Office Furniture Makers, Inc. uses machines to produce high quality office chairs for other firms. The...

Office Furniture Makers, Inc. uses machines to produce high quality office chairs for other firms. The initial cost of one customized machine is $770,000. This machine costs $16,000 a year to operate. Each machine has a life of 3 years before it is replaced. What is the equivalent annual cost of this machine if the required return is 10%? (Enter answer with a positive sign, and to two decimal places)

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

0 0
Add a comment
Know the answer?
Add Answer to:
Office Furniture Makers, Inc. uses machines to produce high quality office chairs for other firms. The...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Show all work. Highlight final answer. DO NOT answer questions if you cannot answer them all....

    Show all work. Highlight final answer. DO NOT answer questions if you cannot answer them all. 15. Automated Manufacturers uses high-tech equipment to produce specialized aluminum products for its customers. Each one of these machines costs $1,480,000 to purchase plus an additional $52,000 a year to operate. The machines have a 6-year life after which they are worthless. What is the equivalent annual cost of one these machines if the required return is 16 percent? (a) -S453,657 (b) -$427,109 (c)...

  • Diamond & Turf Inc. is considering an investment in one of two machines. The sewing machine...

    Diamond & Turf Inc. is considering an investment in one of two machines. The sewing machine will increase productivity from sewing 150 baseballs per hour to sewing 290 per hour. The contribution margin per unit is $0.32 per baseball. Assume that any increased production of baseballs can be sold. The second machine is an automatic packing machine for the golf ball line. The packing machine will reduce packing labor cost. The labor cost saved is equivalent to $21 per hour....

  • Diamond and Turf Inc. is considering an investment in one of two machines. The sewing machine...

    Diamond and Turf Inc. is considering an investment in one of two machines. The sewing machine will increase productivity from sewing 140 baseballs per hour to sewing 252 per hour. The contribution margin per unit is $0.48 per baseball. Assume that any increased production of baseballs can be sold. The second machine is an automatic packing machine for the golf ball line. The packing machine will reduce packing labor cost. The labor cost saved is equivalent to $23 per hour....

  • Diamond and Turf Inc. is considering an investment in one of two machines. The sewing machine...

    Diamond and Turf Inc. is considering an investment in one of two machines. The sewing machine will increase productivity from sewing 110 baseballs per hour to sewing 198 per hour. The contribution margin per unit is $0.44 per baseball. Assume that any increased production of baseballs can be sold. The second machine is an automatic packing machine for the golf ball line. The packing machine will reduce packing labor cost. The labor cost saved is equivalent to $23 per hour....

  • CASE 1.3 Holton-Central Holdings Inc. Holton Chairs had been an innovative designer and producer of quality...

    CASE 1.3 Holton-Central Holdings Inc. Holton Chairs had been an innovative designer and producer of quality office chairs since Arnold Holton founded the firm in Grand Rapids, Michigan, in 1938. In 1947 Holton purchased Central Chairs and renamed itself Holton-Central Inc. When Mr. Holton died in 1994, long-time executives managed the firm for his heirs. Through a variety of circumstances, including foreign competition, outdated production equipment and processes, expensive wage contracts, and low quality, Holton- Central gradually became unprofitable. In...

  • Net Present Value Method and Present Value Index Diamond and Turf Inc. is considering an investment in one of two machines. The sewing machine will increase productivity from sewing 160 baseballs per...

    Net Present Value Method and Present Value Index Diamond and Turf Inc. is considering an investment in one of two machines. The sewing machine will increase productivity from sewing 160 baseballs per hour to sewing 288 per hour. The contribution margin per unit is $0.48 per baseball. Assume that any increased production of baseballs can be sold. The second machine is an automatic packing machine for the golf ball line. The packing machine will reduce packing labor cost. The labor...

  • Karges Coffee Inc. manufactures a line of single-cup brewing machines for home and office use that...

    Karges Coffee Inc. manufactures a line of single-cup brewing machines for home and office use that brew a cup of coffee, tea, or hot chocolate in less than a minute. The machines use specially packaged portions of coffee, tea, or hot chocolate that can be purchased online directly from Karges or at specialty coffee shops licensed to distribute the company’s products. The appeal of the brewing machines is twofold. First, they offer a high level of convenience. The use of...

  • Karges Coffee Inc. manufactures a line of single-cup brewing machines for home and office use that...

    Karges Coffee Inc. manufactures a line of single-cup brewing machines for home and office use that brew a cup of coffee, tea, or hot chocolate in less than a minute. The machines use specially packaged portions of coffee, tea, or hot chocolate that can be purchased online directly from Karges or at specialty coffee shops licensed to distribute the company's products. The appeal of the brewing machines is twofold. First, they offer a high level of convenience. The use of...

  • Exercise 20-05 Pottery Ranch Inc, has been manufacturing its own finials for its curtain rods. The...

    Exercise 20-05 Pottery Ranch Inc, has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 69% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $4 and $5, respectively. Normal production is 25,400 curtain rods per year. A supplier offers to make a pair of finials at a...

  • CCC Conglomerates is analyzing two machines to determine which one it should purchase. Whichever machine is...

    CCC Conglomerates is analyzing two machines to determine which one it should purchase. Whichever machine is purchased will be replaced at the end of its useful life. The company requires a 12 percent rate of return and uses straight-line depreciation to a zero book value over the life of the machine. Machine A has a cost of $378,000, annual operating costs of $22,000, and a 3-year life. Machine B costs $257,000, has annual operating costs of $43,000, and a 2-year...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT