A new packing machine will be purchased at a cost of $57,000. The old machine that is being repla...
A new packing machine will be purchased at a cost of $57,000. The old machine that is being replaced is going to be sold today for $5000. The salvage of the new machine is $7500 after its 10 year useful life. If the new machine reduces annual expenses by $5000, what is the present worth of the new machine, assuming 25% return on investment.
Homework Answers
MARR = 25%
net initial cost = 57000 - 5000 = 52000
Annual savings = 5000
salvage = 7500
t = 10 yrs
PW = -52000 + 5000*(P/A,25%,10) + 7500*(P/F,25%,10)
= -52000 + 5000*3.570503 + 7500*0.107374
= -33342.17
Add Answer to:
A new packing machine will be purchased at a cost of $57,000. The old machine that is being repla...
The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $57,000....
The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $57,000. The machine would replace an old piece of equipment that costs $15,000 per year to operate. The new machine would cost $7,000 per year to operate. The old machine currently in use is fully depreciated and could be sold now for a salvage value of $24,000. The new machine would have a useful life of 10 years with no salvage value. Required: 1. What...
A company currently uses a machine that was purchased 2 years ago. This machine is being...
A company currently uses a machine that was purchased 2 years ago. This machine is being depreciated on a straight-line basis and has 6 years of life remaining. Its current book value is $2,100 and it can be sold for S2,500 at this time. Thus, the annual Hepreciation expense is S2,100/6-S350 per year. If the old machine is not replaced, it could be sold for S500 at the end ofits useful life The company is offered a replacement machine which...
The Dauten Toy Corporation uses an injection molding machine that was purchased prior to the new...
The Dauten Toy Corporation uses an injection molding machine that was purchased prior to the new tax legislation. This machine is being depreciated on a straight-line basis, and it has 6 years of remaining life. Its current book value is $2,100, and it can be sold for $2,600 at this time. Thus, the annual depreciation expense is $2,100/6 = $350 per year. If the old machine is not replaced, it can be sold for $500 at the end of its...
Coronado Industries is contemplating the replacement of an old machine with a new one. The following...
Coronado Industries is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine Price $400000 $800000 Accumulated Depreciation 120000 -0- Remaining useful life 10 years -0- Useful life -0- 10 years Annual operating costs $320000 $240000 If the old machine is replaced, it can be sold for $32000. The company uses straight-line depreciation with a zero salvage value for all of its assets. Which of the following amounts is...
Yak Yarn Consolidated purchased a new spinning machine for $19,320. It is estimated that the machine...
Yak Yarn Consolidated purchased a new spinning machine for $19,320. It is estimated that the machine will have annual expenses of $4,056, with a salvage value of $6,029 when it is replaced in 8 years. It will provide a benefit of $5,276 per year in saved utilities and labor. Assume an interest rate of 8% compounded annually. What is the present worth of this machine?
The Darlington Equipment Company purchased a machine 5 years ago at a cost of $90,000. The...
The Darlington Equipment Company purchased a machine 5 years ago at a cost of $90,000. The machine had an expected life of 10 years at the time of purchase, and it is being depreciated by the straight-line method by $9,000 per year. If the machine is not replaced, it can be sold for $5,000 at the end of its useful life. A new machine can be purchased for $180,000, including installation costs. During its 5-year life, it will reduce cash...
Murl Plastics Inc. purchased a new machine one year ago at a cost of $72,000. Although...
Murl Plastics Inc. purchased a new machine one year ago at a cost of $72,000. Although the machine operates well, the president of Murl Plastics is wondering if the company should replace it with a new electronic machine that has just come on the market. The new machine would slash annual operating costs by two-thirds, as shown in the comparative data below: Purchase cost new Estimated useful life new Annual operating costs Annual straight-line depreciation Remaining book value Salvage value...
Yak Yarn Consolidated purchased a new spinning machine for $19,979. It is estimated that the machine will have annual e...
Yak Yarn Consolidated purchased a new spinning machine for $19,979. It is estimated that the machine will have annual expenses of $4,666, with a salvage value of $6,147 when it is replaced in 5 years. It will provide a benefit of $4,725 per year in saved utilities and labor. Assume an interest rate of 2% compounded annually. What is the present worth of this machine?
Murl Plastics Inc. purchased a new machine one year ago at a cost of $78,000. Although...
Murl Plastics Inc. purchased a new machine one year ago at a cost of $78,000. Although the machine operates well, the president of Murl Plastics is wondering if the company should replace it with a new electronic machine that has just come on the market. The new machine would slash annual operating costs by two-thirds, as shown in the comparative data below: Present Machine Proposed New Machine Purchase cost new $ 78,000 $ 117,000 Estimated useful life new 6...
Concord Corporation is contemplating the replacement of an old machine with a new one. The following...
Concord Corporation is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine Price $370000 $740000 Accumulated Depreciation 111000 -0- Remaining useful life 10 years -0- Useful life -0- 10 years Annual operating costs $296000 $222000 If the old machine is replaced, it can be sold for $29600. Which of the following amounts is a sunk cost?
The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $57,000. The machine would replace an old piece of equipment that costs $15,000 per year to operate. The new machine would cost $7,000 per year to operate. The old machine currently in use is fully depreciated and could be sold now for a salvage value of $24,000. The new machine would have a useful life of 10 years with no salvage value. Required: 1. What...
A company currently uses a machine that was purchased 2 years ago. This machine is being depreciated on a straight-line basis and has 6 years of life remaining. Its current book value is $2,100 and it can be sold for S2,500 at this time. Thus, the annual Hepreciation expense is S2,100/6-S350 per year. If the old machine is not replaced, it could be sold for S500 at the end ofits useful life The company is offered a replacement machine which...
The Darlington Equipment Company purchased a machine 5 years ago at a cost of $90,000. The machine had an expected life of 10 years at the time of purchase, and it is being depreciated by the straight-line method by $9,000 per year. If the machine is not replaced, it can be sold for $5,000 at the end of its useful life. A new machine can be purchased for $180,000, including installation costs. During its 5-year life, it will reduce cash...
Murl Plastics Inc. purchased a new machine one year ago at a cost of $72,000. Although the machine operates well, the president of Murl Plastics is wondering if the company should replace it with a new electronic machine that has just come on the market. The new machine would slash annual operating costs by two-thirds, as shown in the comparative data below: Purchase cost new Estimated useful life new Annual operating costs Annual straight-line depreciation Remaining book value Salvage value...
Yak Yarn Consolidated purchased a new spinning machine for $19,979. It is estimated that the machine will have annual expenses of $4,666, with a salvage value of $6,147 when it is replaced in 5 years. It will provide a benefit of $4,725 per year in saved utilities and labor. Assume an interest rate of 2% compounded annually. What is the present worth of this machine?
Most questions answered within 3 hours.
-
Suppose query Q1 obtains the median
ml of a set S1 of values,
and query Q2...
asked 6 minutes ago -
Provide step by step method to separate benzodiazepines acid,
phenol, benzoyl amine and 1,3 dimethylcyclohexane
asked 16 minutes ago -
Can water stay liquid below zero degrees Celsius?
asked 19 minutes ago -
For each of the following errors, tell whether your calculated
molecular weight would be too high,...
asked 24 minutes ago -
According to CTIA, 25% of all U.S. households are wireless-only
households (no landline). In a random...
asked 40 minutes ago -
REGEX TO PARSE .25 increments.
accepted values:
0.25
1.50
2.00
not accepted:
.1
0.27
1.51
0.00...
asked 25 minutes ago -
Write the complete molecular equation (CME), the complete ionic
equation (CIE), and the net ionic equation...
asked 27 minutes ago -
Signed values: Convert each as indicated. You do not need to
show your work. (But please...
asked 34 minutes ago -
The susceptibility tests included in this unit are typically
used differentiate between Gram-positive cocci. Would you...
asked 38 minutes ago -
Since 1943 the use of nuclear power/energy/technology has come a
long way, from nuclear power plants...
asked 38 minutes ago -
I'm working on Graph implementation in Java. I can't figure out
why the method isConnected() using...
asked 40 minutes ago -
Using Phyton. Design a class Country with the use of
constructor, mutator, accessor methods and implement...
asked 43 minutes ago