Question

Your company is planning to purchase an HP 3D printer that costs $85000. Over the next...

Your company is planning to purchase an HP 3D printer that costs $85000. Over the next seven years, this piece of equipment will be used for various projects and should generate an estimated $9880 per year. The discount rate being used is 6%. Is the investment in this printer going to be worth it to the company? Why or why not? What is the net present value of this potential purchase? What is the IRR?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
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
Similar Questions
47.Your company wants to purchase a 3D printer at a cost of $15,000. It estimates it...
47.Your company wants to purchase a 3D printer at a cost of $15,000. It estimates it can generate cash inflow in the year following purchase of $12,000. In the next a cash outflow of $4,000 will occur because the printer will require expensive maintenance and a software update. In the printer’s final year of its useful life it will generate cash flow of a $10,000. The machine will then be scrapped. Is the purchase financially justifiable if the appropriate discount...
The Bramble Company is planning to purchase $487,000 of equipment with an estimated 7-year life and...
The Bramble Company is planning to purchase $487,000 of equipment with an estimated 7-year life and no estimated salvage value. The company has projected the following annual cash flows for the investment: Year Projected Cash Flows 1 $207,000 2 132,000 3 109,000 4 51,700 5 61,200 6 44,400 7 46,300 Total $651,600 Click here to view the factor table. Calculate the net present value of the proposed equipment purchase. Bramble uses a 11% discount rate. (For calculation purposes, use 4...
You are planning to save for retirement over the next 25 years. To do this, you...
You are planning to save for retirement over the next 25 years. To do this, you will invest $3,000 a quarter in a stock account and $1,000 a quarter in a bond account. These investments will be made at the beginning of each quarter. The return of the stock account is expected to be 8%, and the bond account will pay 4%. When you retire, you will combine your money into an account with a 6% return. How much can...
Taser Company has to purchase some new equipment. Two manufacturers have provided the following information: Equipment...
Taser Company has to purchase some new equipment. Two manufacturers have provided the following information: Equipment A Equipment B Initial costs $67,500 $90,000 Estimated life 5 years 5 years Annual savings $22,500 $24,000 Because the company requires a present value analysis, the following present value factors are furnished: Period Present Value of $1.00 @10% Present Value of an Annuity of $1.00 @ 10% 1 0.90909 0.90909 2 0.82645 1.73554 3 0.75131 2.48685 4 0.68301 3.16987 5 0.62092 3.79079 Required: a.  ...
A company is considering the purchase of a piece of equipment that would cost $400,000 and...
A company is considering the purchase of a piece of equipment that would cost $400,000 and would last for 9 years. At the end of 9 years, the equipment would have a salvage value of $93,000. The equipment would provide annual cost savings of $73,000. The company requires a minimum pretax return of 17% on all investment projects. (Ignore income taxes.) Required: Provide your Excel input and the final net present value amount you calculated. (If a variable is not...
You are evaluating the purchase and installation of a new machine for your company. The purchase...
You are evaluating the purchase and installation of a new machine for your company. The purchase cost is $20,000 and its installation cost is $5,000. Its maintenance cost is estimated to be $2,000 per year starting EOY 1, increasing by 5% per year for 14 additional years. You estimate the additional revenue after installation to be $10,000 per year starting EOY 1 and continuing for 4 additional years. You estimate revenue to increase to $15,000 starting EOY 6 and increasing...
Question: On the Level Construction Company has been growing and needs to purchase a new machine....
Question: On the Level Construction Company has been growing and needs to purchase a new machine. They have been researching multiple companies and have narrowed down their choices to two options - based on reliability and customer service. They now need the help of accounting to determine which option is better financially. Company 1 - Millipede The equipment would cost $3,000,000 up front. It has a 12 year useful life. Millipede's equipment would allow for 2 additional construction jobs per...
Your company must either purchase or make 100,000 units per year over the next 5 years....
Your company must either purchase or make 100,000 units per year over the next 5 years. To make the products yourselves, the project requires an $11 Million investment at n=0, and it requires $1.4 Million per year in operating expenses. In addition, a $2 Million dollar one-time machinery overhaul must be performed at the end of year 3. Assume the machinery has a salvage value of $1 Million at the end of year 5. Finally, assume that raw materials and...
Question 1 AIPIC is considering the purchase of new computer equipment and software to enhance its...
Question 1 AIPIC is considering the purchase of new computer equipment and software to enhance its graphics capabilities Management has been considering several alternative systems, and a local vendor has submitted a quote to the company of $15,000 for the equipment plus $16,800 for software. Assume that the equipment can be depreciated for tax purposes over three years as follows: year 1, $5,000; year 2, $4000; year 3, $6,000. The software can be written off immediately for tax purposes. The...
Please answer all questions. 1. Your firm has decided to purchase a new $15,000 machine. You...
Please answer all questions. 1. Your firm has decided to purchase a new $15,000 machine. You can pay now and take a 3 percent discount or pay $6,000 each year for the next three years. What is the interest rate at which the two alternatives are equal? Why? 2. A machine cost $10,000 and has a useful life of 5 years. If the interest rate is 8 percent how much must be saved every year to recover the cost of...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT