A software company that installs systems for inventory control using RFID technology spent $600,000 per year for the past 3 years in developing their latest product. The company wants to recover its investment in 5 years beginning now. If the company signed a contract that will pay $250,000 now and amounts increasing by a uniform amount each year through year 5, how much must the increase be each year? Use an interest rate of 15% per year.

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A:

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A: Relevant cost: Relevant cost is the avoidable cost which incurred at the time of the decision making…

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A: Net Present Value(NPV) is excess of  present value of cash inflows over initial outlay of proposed…

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A:

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Q: Which is the answer? show steps with your formulas. Thank you

A: Uniform annual amount can be calculated using the below formula, here $75000 is set aside now so…

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A:

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A: Additional credit can be calculated by using this equation Additional credit =Cost of…

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A: EAC is computed below:

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A: Here, Initial Investment is $595,000 Salvage Value of is $81,000 Savings before taxes every year is…

Q: templating the purchase of a new $545,000 computer-based order entry system. The system will be…

A: IRR is a rate where present value of cashinfows is equal to present value of cashoutflows.

Q: Galvanized Products is considering purchasing a new computer system for their enterprise data…

A: The purchase price Galvanized products is $100,000 and borrowed 1/4 of purchase price i.e., $25,000.…

Q: Your firm is contemplating the purchase of a new $575,000 computer-based order entry system. The…

A: Internal Rate of Return or IRR is used in deciding range of discount rates or WACC up to which…

Q: Valve Corporation spent P600,000 per year for the past 3 years in developing their latest product.…

A: Here, we need to equate the present value of the cost and revenues. PV of cost now = PV of base…

Q: Galvanized Products is considering the purchase of a new computer system for their enterprise data…

A: Before the investing money in new assets, profitability and return from that asset is computed. This…

Q: Galvanized Products is considering the purchase of a new computer system for their enterprise data…

A: In this question firm wants to buy a new computer  system.It will require an initial investment of…

Q: Lancaster Lumber buys $8 million of materials (net of discounts) on terms of 3/5, net 55, and it…

A: Computation of effective cost of bank loan is as follows:Additional credit=8000000365×50…

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A: Net present value (NPV) is a method for assessment of financial profitability of a project. NPV is…

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A: Given Information: Savings per month = $3,281 Salvage value = $19,664 Years = 4

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A: Opportunity Cost: Opportunity cost means the potential income and other benefits that are lost due…

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A: NPV is the sum of future cashflows less initial cost

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A: First annual payment is determined using the following formula: Principal=Annual Payment of year…

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A: Compound interest is referred as the interest which is calculated on principal amount which involves…

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A: Savings before tax = $ 176,000 Purchase Price = $ 575,000 Tax Rate = 23% Salvage Value = $60,000…

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A: Capital budgeting techniques are used to determine whether the investment is profitable or viable.…

Q: Your firm is contemplating the purchase of a new $1,200,000 computer- based order entry system. The…

A: The net present value of an investment project represents its profitability condition. It shows the…

Q: The optical products division of Panasonic is planning a $3.5 million building expansion for…

A: Calculation of uniform amount per quarter: Answer: Uniform amount per quarter is $372,932.60

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A: 1. Computation of loan amount. Amount of loan = 100000 × 25% = 25000 Loan including interest = 25000…

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A: Purchase price= $100000 Salvage value= $5000 Maintenance expenses= $25000/ year Savings due to…

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A: The present value is the value of the sum received at time 0 or the current period. It is the value…

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A: The capital budgeting is a technique that helps to analyze the profitability of the project.

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A: Present Worth (PW)- It is the difference between the present value of cash inflows and the present…

Q: Camber Corporation has to decide if they can finance purchasing 10 new machines for all their…

A: a)Calculation of annual payments:Answer:The annual payment is $3,417,453.45.The actual cost of each…

Q: what will be the annual​ savings?

A: Annual savings are the savings per year after deducting all the costs and expenses from the incomes…

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A: The question is based on the concept of calculation of present value of expected future revenue .…

Q: Kermit is considering purchasing a new computer system. The purchase price is $131,870. Kermit will…

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Q: Galvanized Products is considering the purchase of a new computer system for its enterprise data…

A: Present value computes the existing value of future benefits by discounting future worth with a…

Q: Best Trim, a manufacturer of lawn mowers, predicts that it will purchase 204,000 spark plugs next…

A: Opportunity Cost: Opportunity cost is a total of potential income and other benefits that are lost…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.