Question

B. You purchase a new tractor for $110,000 and you expect that it will increase your productivity enough to earn you $18,500 per year. The manufacturer has informed you that there is a maintenance cost for this machine of $8,050 after the first year, which increases by 1% each year thereafter. The salvage value is $80,000 minus 2% per year, would you have broken even on this investment after 5 years? Assume an APR of 6% compounded yearly.

Answer #1

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
$160,000 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 $45,000 per year for the next
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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 $
170,000 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....

You are looking to purchase a new car, and you expect to have
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calculations, you expect to incur $150 maintenance costs in the
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years. You plan to keep the car for 8 years in total. How much
money should you have in your savings account today, so that you do
not have to worry about maintenance?...

One year ago, your company purchased a machine used in
manufacturing for $ 110 comma 000$110,000. You have learned that a
new machine is available that offers many advantages; you can
purchase it for $ 150 comma 000$150,000 today. It will be
depreciated on a straight-line basis over ten years, after which
it has no salvage value. You expect that the new machine will
contribute EBITDA (earnings before interest, taxes,
depreciation, and amortization) of $ 60 comma 000$60,000 per year...

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(62 years from now). You plan to accumulate the retirement fund by
making equal annual deposits at the end of...

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 $150,000 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...

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8% on your money?

1. You love to swim and are considering whether to install a
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You have finished your time at Kelley and need to start thinking
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compounded monthly, on all funds in the retirement account.
Assuming you...

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