A// A civil engineer wants to invest $ 72000 in a new loader, if the income from temporary leasing of loader in expected to be 14000$ per year. The length of time required to recover the investment at an interest rate 14% per year in closet to?

A// A civil engineer wants to invest $ 72000 in a new loader, if the income from temporary leasing of loader in expected to be 14000$ per year. The length of time required to recover the investment at an interest rate 14% per year in closet to?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5PA: Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated...

See similar textbooks

Related questions

Q: A company is deciding whether to lease or buy new equipment that can be purchased for $33,000. If…

A: Present Value It is the concept which states that an amount of money in the future is less worth…

Q: Use the following for the next 2 questions: A facility is to be built with construction costs of…

A: Variable cost means the cost which vary with the level of output and fixed cost means the cost which…

Q: Consider palletizer at a bottling plant that has a first cost of $134,338, has operating and…

A: Given data, Initial investment = $134,338 Operating and maintenance cots= $17,980 Net salvage value…

Q: I have purchased a machine worth P1,715,787.00. And it needs maintenance at the end of every 6…

A: Time value of money: The time value of money is the idea that the value of money received today will…

Q: Expenses for water treatment plant are expected to be $220,000 now, $110,000 in year one, and…

A: Annualised cost is cost of current year and interest cost of perpetual cost.

Q: An untreated electric wooden pole that will last 15 years under a certain soil condition costs…

A: Time value of money concept is used to evaluate projects in the form of various types of investment.…

Q: Annual maintenance costs for a rotary kiln is P2,000. The placement if a new refractory would reduce…

A: Annual savings for first 5 years = P 700 Annual savings for next 5 years = P 1200 Annual interest…

Q: ve purchased a machine worth P1,564,748.00. And it needs maintenance at the end of every 6 months…

A: Present value of the money can be found by the interest rate and period given by using the formula.

Q: A Company is contemplating the purchase of a new milling machine. The purchase price of the new…

A: Answer) The rate of return on investment will be the internal rate of return. This the rate at which…

Q: If a Cross-Fit project is at the end of its 5-year tenure in a rented building, worth BDS $1500.00…

A: The residual value, also popularly referred to as salvage value, is the determined value of a fixed…

Q: Rework Problem 12.11, assuming the following additional information:• For tax purposes, the entire…

Q: The engineers of a company, propose two alternative plans for the realization of a project that will…

A: Two alternatives can be analyzed by use of discounted cash flow technique of capital budgeting. The…

Q: A company plans to spend $ 156244 to install a new machine. Annual maintenance cost is $ 13178.…

A: Here, Initial Investment is $156,244 Annual Maintenance Cost is $13,178 Annual Income in first year…

Q: A young engineer is considering to built a 25unit apartment near a commercial center. Because of the…

A: Net Present Value method is used to determine whether the proposal should be selected or rejected…

Q: You are considering the purchase of a new machine for a project. Details of this potential purchase…

A: Cash flow statement considers only cash dealt items.

Q: I have purchased a machine worth P1.862.585.00. And it needs maintenance at the end of every 6…

A: Purchase Price = 1,862,585 Maintenance Cost = 2% of Purchase Price = 2% * 1.862,585 = 37,251.70…

Q: A hydraulic lift is purchased for a warehouse for $60,000. This lift is expected to generate $7000…

A: Rate of Return on Investment = Net income/Total Investment Depreciation Expense = Cost of the…

Q: A contractor estimates purchase of a new bulldozer will increase earnings $20,000 per year for each…

A: Increase in earning per year = $ 20,000 Period = 10 Years Increase in expenses = $ 2000 Annual…

Q: Purchase a new computer system for $45,000. The system is expected to last 6 years with a salvage…

A: There are 2 options - 1- Purchase a new computer system for $45,000 with salvage $7000 after 6…

Q: A firm can purchase a centrifugal separator (5-year MACRS property) for$17,000. The estimated…

A: Given Data: Investment ($) 17000 Useful life 6 Salvage value($) 3000 Tax rate 23% MARR 12%…

Q: A commercial building is proposed to be built in a subdivision. The initial cost is estimated to be…

Q: A company is deciding whether to lease or buy new equipment that can be purchased for $33,000. If…

A: Leases is the amount of rent paid which is accrued due to the agreement between property owner and…

Q: An investor is considering the purchase of a rental house for $120,000. The house generates monthly…

A: given, house price = $120,000 monthly rent = $1,150 operating expense=$4800 years = 5 selling price…

Q: A contractor is saving money for a lucrative project. The initial cost is $175,000, annual outlays…

A: To find the money to be saved, we will have to find the present value of all the expenses using 8%…

Q: A company plans to spend $ 165126 to install a new machine. Annual maintenance cost is $ 10831.…

A: Information Provided: Initial cost = $165,126 Annual maintenance cost = $10,831 Annual Income =…

Q: A new machine for your company has a first cost of $80,000 and an estimated net salvage value of…

A: Net present value describes the amount of cash flows that need to be calculated at the present…

Q: An equipment that currently costs $750,000 is needed for construction at the project site for 5…

A: Considering cash flow from Lease and Purchase of equipment Assumption of equipment being sold…

Q: The initial cost of a new machine is $10,000. The annual operating cost is $1,000/yr for first 3…

A: Equivalent uniform annual cost EUAC distributes the total cost of the project in term of annual cost…

Q: A utility company is considering the following plans to provide a certain service required by…

A: Given Information: Plan R Investment required - P500,000 Estimated life - 18 years Salvage value -…

Q: I have purchased a machine worth P1,665,509.00. And it needs maintenance at the end of every 6…

A: Present worth refers to the worth of the amount that is expected to be received in future date at…

Q: A concrete vibrating equipment will be purchased for a cost of $107,425. After a useful life of 5…

A: annual ownership cost= annual deprecation expense + annual Borrowing cost +risk cost +interest rate,…

Q: A building company plans to build a new warehouse. The cost of building the warehouse is an initial…

A: Initial Investment $ -15,00,000.00 Cost in 1st Quarter $ -2,50,000.00 Cost in 2nd…

Q: I have purchased a machine worth P1,877,187.00. And it needs maintenance at the end of every 6…

A: First we need to calculate present value of all maintenances by using this formula PV =pmt1-1(1+i)ni…

Q: A large standby electricity generator in a hospital operating room has a first cost of $67,250 and…

A: in this we have determine annual worth and find out minimum annual worth.

Q: 1. The expansion plan of the business firm requires the purchase of a parcel of land on which to…

A: The formula to determine the future value compounded semi annually is, Future value = Present value…

Q: Some equipment is needed for a 4-year project. It can be leased for $15,000 annually, or it can be…

A: In order to find the rate of return one has to know the purchased amount and the amount for it was…

Q: What should the resale value of a machine if it is bought at $100,000 that will produce a net…

A: The annual return seems to be the rate of return on investment over time, given as a time-weighted…

Q: A firm can purchase a centrifugal separator (5-year MACRS property) for $22,000. The estimated…

A: Net Present Value=(Present Value of Cash Inflows-Present Value of Cash Outflows)

Q: You are given opportunity to purchase product for $42, 000. The product will have annual operating…

A: A project should earn enough revenue in order to cover the costs incurred.

Q: I have purchased a machine worth P1,897,363.00. And it needs maintenance at the end of every 6…

A: Purchase price of machine = 1,897,363 Semi Annual Maintenance Cost = 2%*Purchase price =…

Q: As an Engineer, you are asked to consider two building proposals, which alternative do you deem…

A: Interest Rate = 21.4% Quarterly Compounding Number of compounding periods = 4 Year Cash Flow -…

Q: What is the cost of perpetual operation

Q: e plant manager of Shenzhen Electronics Company is considering the purchase of new automated…

A: a. Payback period on the project = Initial investment / Annaul saving in costs = $188,000 / $47,000…

Q: I have purchased a machine worth P1,897,363.00. And it needs maintenance at the end of every 6…

A: Whenever repeated payments are made at the end of a specific period it is called an annuity. This…

Q: You are assessing the minimum amount of investment that you will be willing to invest today for a…

A: Time Period = 10 Years Monthly advertising space rental costs = P120,000 Interest Rate =…

Q: he replacement of a digital printing machine is proposed within a year, the price of said machine is…

A: In this we need to calculate present value factor and get monthly deposit.

Q: Miami Machine Shops, Ltd. is consideringpurchasing a vertical drill machine. The machinewill cost…

A: Internal Rate of Return Internal rate of return is one of the technique of capital budgeting which…

Question

100%

A// A civil engineer wants to invest $ 72000 in a new loader, if the income from
temporary leasing of loader in expected to be 14000$ per year. The length of
time required to recover the investment at an interest rate 14% per year in
closet to?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step by step

Solved in 4 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated revenue producing life of 4 years. Falkland has a cost of capital of 8%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?
Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated revenue producing lite of 4 years. Mason has a required rate of return that is 12% and a cost of capital of 11%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?
Redbird Company is considering a project with an initial investment of $265,000 in new equipment that will yield annual net cash flows of $45,800 each year over its seven-year life. The companys minimum required rate of return is 8%. What is the internal rate of return? Should Redbird accept the project based on IRR?
Caduceus Company is considering the purchase of a new piece of factory equipment that will cost $565,000 and will generate $135,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return In Excel, see Appendix C.
Conestoga Plumbing plans to invest in a new pump that is anticipated to provide annual savings for 10 years of $50,000. The pump can be sold at the end of the period for $100,000. What is the present value of the investment in the pump at a 9% interest rate given that savings are realized at year end?
Jullo Company is considering the purchase of a new bubble packaging machine. If the machine will provide $20,000 annual savings for 10 years and can be sold for $50,000 at the end of the period, what is the present value of the machine investment at a 9% interest rate with savings realized at year end?
If a copy center is considering the purchase of a new copy machine with an initial investment cost of $150,000 and the center expects an annual net cash flow of $20,000 per year, what is the payback period?
A restaurant is considering the purchase of new tables and chairs for their dining room with an initial investment cost of $515,000, and the restaurant expects an annual net cash flow of $103,000 per year. What is the payback period?
Your company is planning to purchase a new log splitter for is lawn and garden business. The new splitter has an initial investment of $180,000. It is expected to generate $25,000 of annual cash flows, provide incremental cash revenues of $150,000, and incur incremental cash expenses of $100,000 annually. What is the payback period and accounting rate of return (ARR)?
Washington-Pacific (W-P) invested $4 million to buy a tract of land and plant some young pine trees. The trees can be harvested in 10 years, at which time W-P plans to sell the forest at an expected price of $8 million. What is W-P’s expected rate of return?
The Ham and Egg Restaurant is considering an investment in a new oven that has a cost of $60,000, with annual net cash flows of $9,950 for 8 years. The required rate of return is 6%. Compute the net present value of this investment to determine whether or not you would recommend that Ham and Egg invest in this oven.
Big Sky Mining Company must install 1.5 million of new machinery in its Nevada mine. It can obtain a bank loan for 100% of the purchase price, or it can lease the machinery. Assume that the following facts apply. (1) The machinery falls into the MACRS 3-year class. (2) Under either the lease or the purchase, Big Sky must pay for insurance, property taxes, and maintenance. (3) The firms tax rate is 25%. (4) The loan would have an interest rate of 15%. It would be nonamortizing, with only interest paid at the end of each year for four years and the principal repaid at Year 4. (5) The lease terms call for 400,000 payments at the end of each of the next 4 years. (6) Big Sky Mining has no use for the machine beyond the expiration of the lease, and the machine has an estimated residual value of 250,000 at the end of the 4th year. a. What is the cost of owning? b. What is the cost of leasing? c. What is the NAL of the lease?