Question

A machine costs $260,000 to purchase and will provide $60,000 a year in benefits. The company plans to use the machine for 12 years and then will sell the machine for scrap, receiving $15,000. The company interest rate is 9%. What is the present value of buying the machine, receiving annual benefits, and then selling the machine??

Answer #1

A machine costs $750,000 to purchase and will produce $250,000
per year revenue. Annual operating and maintenance cost is $70,000.
The machine will have to be upgraded in year 4 at a cost of
$150,000. The company plans to use the machine for 8 years and then
sell it for scrap for which it expects to receive $30,000. The
company MARR interest rate is 10%. Compute the net present worth to
determine whether or not the machine should be purchased?

A machine costs $750,000 to purchase and will produce $250,000
per year revenue. Annual operating and maintenance cost is $70,000.
The machine will have to be upgraded in year 4 at a cost of
$150,000. The company plans to use the machine for 8 years and then
sell it for scrap for which it expects to receive $30,000. The
company MARR interest rate is 10%. Compute the net present worth to
determine whether or not the machine should be purchased?...

PLEASE SOLVE NOT USING EXCEL OR A TABLE
A machine costs $750,000 to purchase and will produce $250,000
per year revenue. Annual operating and maintenance cost is $70,000.
The machine will have to be upgraded in year 4 at a cost of
$150,000. The company plans to use the machine for 8 years and then
sell it for scrap for which it expects to receive $30,000. The
company MARR interest rate is 10%. Compute the net present worth to
determine...

Machine A costs $30,000 to purchase and is worth $9,000 in 5
years. Machine B costs $15,000 to purchase and is worth $2,000 in 2
years. Assume that these machines are needed for 20 years and can
be repurchased at the same price in the future. (use 13% interest
rate)
Compute the Annual Equivalent Cost of each machine and subtract
those values. Record the difference as a POSITIVE if Machine A is
best, or a NEGATIVE if Machine B is...

The
Springdale Corporation plans to purchase a demolition and wrecking
machine to save labor costs. The machine costs $60,000 and has a
salvage value of $10,000 at the end of 5 years. The machine is
expected to be in operation for 5 years, and it will be depreciated
by the straight line method up to the salvage value. The
corporation specifies an after-tax MARR including inflation of 10%
and has an income tax rate of 34%. The annual inflation rate...

A company is considering the purchase of a machine. For this he
has received two proposals that meet the requested technical
requirements. The considerations economic of each machine are the
following:
Machine A Machine B
Initial cost $ 60,000 $ 40,000
Maintenance cost in the first year 5,000 8,000
Annual increase in maintenance cost 600 10%
Shelf life (years) 8 4
Salvage Value 6,000 4,000
Considering an interest rate of 5% capitalized annually, what
machine would you recommend Use the...

1. If HAAS Machine Tool Company offers you an
SL-20 Machine for $60,000 at an annual interest rate of 4% for 7
years, what is the cost per minute for the machine (CM)?
(The company operates 5 days per week, 8 hours per day, 50 weeks
per year).
$0.0244
$0.0644
$0.0833
$0.0944
$0.1096
2. If you are negotiating a price (P) with HAAS
Machine Tool Company to purchase a VF machining center and you are
offered an annual interest rate...

Calculate the present worth of all costs for a newly acquired
machine with an initial cost of $32,000, no trade-in value, a life
of 13 years, and an annual operating cost of $15,000 for the first
4 years, increasing by 10% per year thereafter. Use an interest
rate of 10% per year.
The present worth of all costs for a newly acquired machine is
determined to be $

Vandelay Industries is considering the purchase of a new machine
for producing
latex. Machine A costs $2,600,000 and will last for six years.
Variable costs are
35% of sales and fixed costs are $195,000 per year. Machine B
costs $5,200,000
and will last for 9 years. Variable costs for this machine are
30% of sales and
fixed costs are $230,000 per year. The sales for each machine
will be $10 mil
per ear. The required return is 10% and the...

Internal Rate of Return Analysis. Heston
Farming Company would like to purchase a harvesting machine for
$100,000. The machine is expected to have a life of 4 years, and a
salvage value of $20,000. Annual maintenance costs will total
$28,000. Annual savings are predicted to be $60,000. The company’s
required rate of return is 11 percent (this is the same data as the
previous exercise).
Required:
Use trial and error to approximate the internal rate of return
for this investment...

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