•GoodLife center is considering buying the following Tanning Machine: –The machine costs $30,000. –Over the next...
•GoodLife center is considering buying the following Tanning Machine:
–The machine costs $30,000.
–Over the next 8 years (the life of the machine), the machine will generate annual sales of $14,400 ($40 per person and 360 customers).
–The annual cost of running the tanning machine, including the manpower is $4,000 per year, and other costs (overhead) are 1,500 per year.
–Depreciation on the machine is straight-line, with a salvage value of zero at the end of 8
–GoodLife’s tax rate is 40%.
•If GoodLife’s discount rate 15%, what is the NPV of this Tanning Machine?
Homework Answers
Add Answer to:
•GoodLife center is considering buying the following Tanning
Machine:
–The machine costs $30,000.
–Over the next...
A company is considering buying a new piece of machinery that costs $30,000 and has a...
A company is considering buying a new piece of machinery that costs $30,000 and has a salvage value of $8,000 at the end of its 5-year useful life. The machinery nets $5,000 per year in annual revenues. MARR = 8%. The internal rate of return (IRR) on this investment is between A. 2%-3%. B. 11%-12%. C. 6%-7%. D. 13%-14%. E. 4%-5%. Using the information in the previous question #5, if the company considering purchasing the machine uses a MARR of...
A company is considering buying a new piece of machinery that costs $30,000 and has a...
A company is considering buying a new piece of machinery that costs $30,000 and has a salvage value of $8,000 at the end of its 5-year useful life. The machinery nets $5,000 per year in annual revenues. MARR = 8%. The internal rate of return (IRR) on this investment is between A. 2%-3%. B. 11%-12% C. 6%-7% D. 13%-14% E. 4%-5%
ABC Is considering an investment in a machine that will generate costs and savings as shown Machine Cost ( 10 yea...
ABC Is considering an investment in a machine that will generate costs and savings as shown Machine Cost ( 10 year life) $500,000 Current Monthly Costs Monthly Costs w new machine 12,000.00 6,500.00 The required rate of return is 8% Compute the n pv, npv index and the irr of the above CCP can purchase a new pckg machine in lieu of its current machine Old Machine New Machine Hours per year 4,000 4,000 Cost per hour Years of use...
ABC Is considering an investment in a machine that will generate costs and savings as shown Machine Cost ( 10 year life...
ABC Is considering an investment in a machine that will generate costs and savings as shown Machine Cost ( 10 year life) $500,000 Current Monthly Costs Monthly Costs w new machine 12,000.00 6,500.00 The required rate of return is 8% Compute the npv, npv index and the irr of the above CCP can purchase a new pckg machine in lieu of its current machine Old Machine New Machine Hours per year Cost per hour Years of use sale of old...
Witten Entertainment is considering buying a machine that costs $550,000. The machine will be depreciated over...
Witten Entertainment is considering buying a machine that costs $550,000. The machine will be depreciated over five years by the straight-line method and will be worthless at that time. The company can lease the machine with year-end payments of $145,000. The company can issue bonds at an interest rate of 7 percent. The corporate tax rate is 25 percent. What is the NAL of the lease?
Witten Entertainment is considering buying a machine that costs $560,000. The machine will be depreciated over...
Witten Entertainment is considering buying a machine that costs $560,000. The machine will be depreciated over four years by the straight-line method and will be worthless at that time. The company can lease the machine with year-end payments of $173,000. The company can issue bonds at an interest rate of 7 percent. The corporate tax rate is 25 percent. What is the NAL of the lease?
company is considering buying a new piece of machinery that costs $30,000 and has a value of $8,000 at the end of it...
company is considering buying a new piece of machinery that costs $30,000 and has a value of $8,000 at the end of its 5-year useful life. The machinery nets $5,000 per year in ann venues. The internal rate of return (IRR) on this investment is between A 2%-3% salvage ual 2. : 11%-12%. C. 6%-7%. , D. 13%-14%. E. 4%-5%.
company is considering buying a new piece of machinery that costs $30,000 and has a value of $8,000 at the...
Spike Inc is considering the purchase of a new machine for the production of computers. Machine A...
Spike Inc is considering the purchase of a new machine for the production of computers. Machine A costs $3,400,000 and will last for 6 years. Variable costs are 20% of sales and fixed costs are $850,000 per year. Machine B costs $5,600,000 and will last for 10 years. Variable costs for the machine are 15% of sales and fixed costs are $1,000,000 per year. The sales for each machine will be $5,000,000 per year. The required rate of return is 8%,...
CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $397,000 is estimated to result in $145,000 in annual pretax cost savings. The press is eligible for 100 percent bonus depreciation and it will have a salvage value at the end of the project of $46,000. The press also requires an initial investment in spare parts inventory of $15,100, along with an additional $2,100 in inventory for each succeeding year of...
CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $397,000 is estimated to result in $145,000 in annual pretax cost savings. The press is eligible for 100 percent bonus depreciation and it will have a salvage value at the end of the project of $46.000. The press also requires an initial investment in spare parts inventory of $15,100, along with an additional $2,100 in inventory for each succeeding year of...
A company is considering buying a new piece of machinery that costs $30,000 and has a salvage value of $8,000 at the end of its 5-year useful life. The machinery nets $5,000 per year in annual revenues. MARR = 8%. The internal rate of return (IRR) on this investment is between A. 2%-3%. B. 11%-12%. C. 6%-7%. D. 13%-14%. E. 4%-5%. Using the information in the previous question #5, if the company considering purchasing the machine uses a MARR of...
A company is considering buying a new piece of machinery that costs $30,000 and has a salvage value of $8,000 at the end of its 5-year useful life. The machinery nets $5,000 per year in annual revenues. MARR = 8%. The internal rate of return (IRR) on this investment is between A. 2%-3%. B. 11%-12% C. 6%-7% D. 13%-14% E. 4%-5%
ABC Is considering an investment in a machine that will generate costs and savings as shown Machine Cost ( 10 year life) $500,000 Current Monthly Costs Monthly Costs w new machine 12,000.00 6,500.00 The required rate of return is 8% Compute the n pv, npv index and the irr of the above CCP can purchase a new pckg machine in lieu of its current machine Old Machine New Machine Hours per year 4,000 4,000 Cost per hour Years of use...
ABC Is considering an investment in a machine that will generate costs and savings as shown Machine Cost ( 10 year life) $500,000 Current Monthly Costs Monthly Costs w new machine 12,000.00 6,500.00 The required rate of return is 8% Compute the npv, npv index and the irr of the above CCP can purchase a new pckg machine in lieu of its current machine Old Machine New Machine Hours per year Cost per hour Years of use sale of old...
company is considering buying a new piece of machinery that costs $30,000 and has a value of $8,000 at the end of its 5-year useful life. The machinery nets $5,000 per year in ann venues. The internal rate of return (IRR) on this investment is between A 2%-3% salvage ual 2. : 11%-12%. C. 6%-7%. , D. 13%-14%. E. 4%-5%.
company is considering buying a new piece of machinery that costs $30,000 and has a value of $8,000 at the...
CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $397,000 is estimated to result in $145,000 in annual pretax cost savings. The press is eligible for 100 percent bonus depreciation and it will have a salvage value at the end of the project of $46,000. The press also requires an initial investment in spare parts inventory of $15,100, along with an additional $2,100 in inventory for each succeeding year of...
CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $397,000 is estimated to result in $145,000 in annual pretax cost savings. The press is eligible for 100 percent bonus depreciation and it will have a salvage value at the end of the project of $46.000. The press also requires an initial investment in spare parts inventory of $15,100, along with an additional $2,100 in inventory for each succeeding year of...
Most questions answered within 3 hours.
-
3) What are the typical social structures in a global city?
asked 2 hours ago -
Luther Corporation
Consolidated Balance Sheet
December 31, 2019 and 2018 (in $ millions)
Assets
2019
2018...
asked 2 hours ago -
(Expected rate of return and risk) Carter Inc. is evaluating a
security. Calculate the investment’s expected...
asked 5 hours ago -
What specific indicators can point to lack of progress for
African Americans in American society?
asked 6 hours ago -
1-The Electrons in a beam are moving at 2.7×108 m/s in an
electric field of 15000...
asked 6 hours ago -
A gas tank is a vertical cylinder. It has a radius of 1m, a
height of...
asked 7 hours ago -
Accent Software faces the following conditions. All of these
support Accent’s use of a market-penetration pricing...
asked 8 hours ago -
A mathematically inclined friend emails you the following
instructions: "Meet me in the cafeteria the first...
asked 8 hours ago -
A monopoly sells in two countries . The demand curves in the two
countries are p1...
asked 9 hours ago -
A .15kg rubber ball is bounced off a wall. Before hitting the
wall, the ball moves...
asked 9 hours ago -
A manufacturing company preparing to build a new plant is
considering three potential locations for it....
asked 9 hours ago -
B. If compound Y has approximately the same values of solubility
in toluene as compound X,...
asked 10 hours ago