Question

Bridgton Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs $113,000, has a...

Bridgton Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs $113,000, has a 5-year life, and costs $9,200 per year to operate. The relevant discount rate is 9 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $8,500 at the end of the project’s life. The relevant tax rate is 25 percent. All cash flows occur at the end of the year. What is the equivalent annual cost (EAC) of this equipment? (A negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Business   Finance   
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
Bridgton Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs $97,000, has a...
Bridgton Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs $97,000, has a 4 year life, and costs $8,900 per year to operate. The relevant discount rate is 12 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $19,500 at the end of the project’s life. The relevant tax rate is 38 percent. All cash flows occur at the...
SGS Golf Academy is evaluating different golf practice equipment. The "Dimple-Max" equipment costs $162,000, has a...
SGS Golf Academy is evaluating different golf practice equipment. The "Dimple-Max" equipment costs $162,000, has a 5-year life, and costs $10,000 per year to operate. The relevant discount rate is 12 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $25,000 at the end of the project’s life. The relevant tax rate is 24 percent. All cash flows occur at the end...
SGS Golf Academy is evaluating different golf practice equipment. The "Dimple-Max" equipment costs $105,000, has a...
SGS Golf Academy is evaluating different golf practice equipment. The "Dimple-Max" equipment costs $105,000, has a 5-year life, and costs $9,700 per year to operate. The relevant discount rate is 11 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $23,500 at the end of the project’s life. The relevant tax rate is 35 percent. All cash flows occur at the end...
SGS Golf Academy is evaluating different golf practice equipment. The "Dimple-Max" equipment costs $97,000, has a...
SGS Golf Academy is evaluating different golf practice equipment. The "Dimple-Max" equipment costs $97,000, has a 4-year life, and costs $8,900 per year to operate. The relevant discount rate is 12 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $19,500 at the end of the project’s life. The relevant tax rate is 38 percent. All cash flows occur at the end...
Bridgton Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs $122,000, has a...
Bridgton Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs $122,000, has a 5-year life, and costs $9,500 per year to operate. The relevant discount rate is 12 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $9,100 at the end of the project’s life. The relevant tax rate is 23 percent. All cash flows occur at the end...
SGS Golf Academy is evaluating different golf practice equipment. The "Dimple-Max" equipment costs $146,000, has a...
SGS Golf Academy is evaluating different golf practice equipment. The "Dimple-Max" equipment costs $146,000, has a 4-year life, and costs $9,800 per year to operate. The relevant discount rate is 10 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $24,000 at the end of the project’s life. The relevant tax rate is 22 percent. All cash flows occur at the end...
SGS Golf Academy is evaluating different golf practice equipment. The "Dimple-Max" equipment costs $110,000, has a...
SGS Golf Academy is evaluating different golf practice equipment. The "Dimple-Max" equipment costs $110,000, has a 5-year life, and costs $10,200 per year to operate. The relevant discount rate is 13 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $26,000 at the end of the project’s life. The relevant tax rate is 34 percent. All cash flows occur at the end...
Bruin Sports is evaluating different soccer practice equipment. One of them costs $78,000, has a three-year...
Bruin Sports is evaluating different soccer practice equipment. One of them costs $78,000, has a three-year life, and generates pre-tax savings of $34,000 per year. The relevant discount rate is 11.8 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Also, assume the equipment has a market salvage value of $15,000 at the end of the project's life. The relevant tax rate is 35 percent. All cash flows occur at the...
Scholastic Co. is evaluating different equipment. Machine A costs $85,000 per year has a four-year life,...
Scholastic Co. is evaluating different equipment. Machine A costs $85,000 per year has a four-year life, and costs $45,000 per year to operate. The machine will be depreciated using straight-line and the relevant discount rate is 8%. The machine will have a salvage value of $20,000 at the end of the project's life. The firm has a tax rate of 21%. Calculate the operating cash flow in year 1. (Enter a negative value)
You are evaluating two different silicon wafer milling machines. The Techron I costs $258,000, has a...
You are evaluating two different silicon wafer milling machines. The Techron I costs $258,000, has a three-year life, and has pretax operating costs of $46,800 per year. The Techron II costs $350,000, has a five-year life, and has pretax operating costs of $54,900 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $29,000. Assume the tax rate is 40 percent and the discount rate is 12 percent.    ...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT