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- Your landscaping company can lease a truck for $8,200 a year (paid at year-end) for 5 years. It can instead buy the truck for $35,000. The truck will be valueless after 5 years. The interest rate your company can earn on its funds is 6%. a. What is the present value of the cost of leasing? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. Is it cheaper to buy or lease? c. What is the present value of the cost of leasing if the lease payments are an annuity due, so the first payment comes immediately? (Do not round intermediate calculations. Round your answer to 2 decimal places.) d. Is it now cheaper to buy or lease?You are considering buying a 10-year-old machine for $280, or a new fuel-efficient machine for$600. The new machine will save you $5 per month on your fuel bill, and you will be able to sellit for $300 in 10 years. The used machine will have no resale value at that time. Assume theinterest rate is 3% per year. According to the information given, which machine will you buy?Your landscaping company can lease a truck for $8,400 a year (paid at year-end) for 7 years. It can instead buy the truck for $44,000. The truck will be valueless after 7 years. The interest rate your company can earn on its funds is 8%. a. What is the present value of the cost of leasing? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. Is it cheaper to buy or lease? c. What is the present value of the cost of leasing if the lease payments are an annuity due, so the first payment comes immediately? (Do not round intermediate calculations. Round your answer to 2 decimal places.) d. Is it now cheaper to buy or lease? Your landscaping company can lease a truck for $8,400 a year (paid at year-end) for 7 years. It can instead buy the truck for $44,000. The truck will be valueless after 7 years. The interest rate your company can earn on its funds is 8%. a. What is the present value of the cost of leasing? (Do not round intermediate calculations. Round…
- Your friend in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes one year to manufacture $100. However, once built, the machine will last forever and will require no maintenance. The machine can be built immediately, but it will cost $1,000 to build. Your friend wants to know if he should invest the money to construct it. If the interest rate is 5.5% per year, what should your friend do? The NPV of the machine is $ (Round to the nearest dollar.) What should your friend do? (Select the best choice below.) A. Accept the machine because the NPV is equal to or greater than $0. B. Accept the machine because the NPV is equal to or less than $0. C. Reject the machine because the NPV is equal to or greater than $0. D. Reject the machine because the NPV is less than $0.Ignore income taxes in this problem.) Your Company is considering buying a new machine that would generate annual cost savings would of $14,125. The internal rate of return is 12%. The machine has a projected life of 10 years. What is the maximum you should pay for the machine? Round to the nearest dollar.It’s time to get a new laptop. The laptop is $1,800. You could put money aside for it each month for one year. If you put the money in an account that earns 4.5%, how much will you have to save each month?Your other option is to finance it over two years paying 7.1%. How much would your monthly payment be?What are the total acquisition costs of each option?
- Your friend in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes one year to manufacture $800. However, once built, the machine will last forever and will require no maintenance. The machine can be built immediately, but it will cost $8,000 to build. Your friend wants to know if he should invest the money to construct it. If the interest rate is 4.0% per year, what should your friend do? The NPV of the machine is $ What should your friend do? (Round to the nearest cent.) (Select the best choice below.) O A. Accept the machine because the NPV is equal to or greater than $0. O B. Reject the machine because the NPV is less than $0. O C. Reject the machine because the NPV is equal to or greater than $0. O D. Accept the machine because the NPV is equal to or less than $0. ..Your friend in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes one year to manufacture $100. However, once built, the machine will last forever and will require no maintenance. The machine can be built immediately, but it will cost $1,000 to build. Your friend wants to know if he should invest the money to construct it. If the interest rate is 4.0% per year, what should your friend do? The NPV of the machine is $ (Round to the nearest dollar.) What should your friend do? (Select the best choice below.) A. Reject the machine because the NPV is equal to or greater than $0. B. Accept the machine because the NPV is equal to or less than $0. C. Reject the machine because the NPV is less than $0. D. Accept the machine because the NPV is equal to or greater than $0.A new high-efficiency motor is being considered for a large compressor. The new motor will cost $20,000 but will save $8000 per year in electricity. If the firm’s MARR is 15%, what is the discounted payback period?
- Your friend in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes one year to manufacture $700. However, once built, the machine will last forever and will require no maintenance. The machine can be built immediately, but it will cost $7,000 to build. Your friend wants to know if he should invest the money to construct it. If the interest rate is 13.0% per year, what should your friend do? Question content area bottom Part 1 The NPV of the machine is $enter your response here. (Round to the nearest cent.) Part 2 What should your friend do? (Select the best choice below.) A. Accept the machine because the NPV is equal to or less than $0. B. Reject the machine because the NPV is equal to or greater than $0. C.Reject the machine because the NPV is less than $ 0. Reject the machine because the NPV is less than $0. D.Accept the machine because…Elijah Enterprises will need to upgrade the computer system in 6 years. They anticipate the upgrade to cost $95,300. If the discount rate is 15%, what will be the required yearly investment needed to obtain the money for the upgrade?Round your (1+R)^n value to 2 decimal places and use that number for your final amount required rounded to the nearest dollar. Future Value / (1+R)^n = Amount Required / = What would be required if the discount rate was 8%? Future Value / (1+R)^n = Amount Required / =You are considering buying a piece of industrial equipment to automate a part of your production process. This automation will save labor costsby as much as $42,000 per year over 12 years. Theequipment costs $270,000. Should you purchase theequipment if your interest rate is 10%?
