Consider a mechanical device that will cost $ 20,000 when purchased. Maintenance will cost $1000 each year. The device will generate $5000 each year for 5 years, after which the salvage value is expected to be 7000. Draw a cashflow.

Q: Consider an investment that costs $100,000 and has a cash inflow of $25,000 every year for 5 years.…

A: IRR is the rate at which NPV of the project is zero. Using excel IRR function

Q: Your company is planning to purchase a new log splitter for its lawn and garden business. The new…

A: working notes: Payback period = $204,000 / 30,000 = 6.8 Years 125,080-70,000 =55,080 Accounting rate…

Q: Your company is considering making an investment in equipment that will cost $240,000. The equipment…

A: Payback period and the accounting rate of return are two different methods of capital budgeting.…

Q: Draw the cash flow diagram for an investment that includes purchasing a machine that costs $50,000…

A: Cash flow: It is the inflow & outflow of cash from the company or a project.

Q: A new machine will cost $750,000. The cash flows generated from this new machine are as follows:…

A: payback period = years before full period + (unrecovered cost at the start of the year /  cashflow…

Q: You are considering a project with an initial cost of $7,800. What is the payback period for this…

A: Calculation of Payback Period:Using Excel Spreadsheet:

Q: Remodeling an office will cost $25,000 and will generate savings of $3,000 the first year, $4,000the…

A:

Q: If a certain machine undergoes a major overhaul now, its output can be increased by 20%, which…

A: The present value is the current value of future cash flow at a certain rate and a certain time…

Q: Josh purchased a new machine for his business. Josh expects to produce 80 products at P 100,000.00…

A: Cash flow is the flow of cash in entity. There can be inflow or outflow of cash depending upon the…

Q: An industrial machine costing $10,000 will produce net cash savings of $4,000per year. The machine…

A: IRR is the discount rate where present value of the cashflow is equal to initial investment. AT IRR…

Q: A project that is expected to last six years will generate a profit and cash flow contribution…

A: Answer: Computation of cash flows: Excel spreadsheet:

Q: An industrial machine costing $10,000 will produce net cash savings of $4,000 per year. The machine…

A: Sensitivity Analysis: It is possible to identify the effect of several independent variables on a…

Q: Your company is considering the purchase of a new piece of manufacturing equipment. The new machine…

A: In the given question we need to calculate the Net Present Value (NPV) of investment. Net present…

Q: cost of a project is $50,000 and it generates cash inflows of $20,000, over four years. Calculate…

A: Payback period is the no. of years required to recover the initial amount invested.

Q: A company is considering investing in a new machine that requires a cash payment of $47,947 today.…

A: Internal rate of return method: Internal rate of return method is one of the capital investment…

Q: You are considering investing $64,000 in new equipment. You estimate that the net cash flows will be…

A: Investing in new Equipment  $        64,000 Life of Equipment 8 year  Salvage Value  $…

Q: What is the annual operation and maintenance costs of owning this vehicle?

A: Time value of money (TVM) is used to measure the value of money at different point of time in the…

Q: Moving to a new facility will save $400,000 annually for 20 years. The cost of building the facility…

A: IRR is a tool for making investment decisions. It measures whether an investment is profitable or…

Q: how much should it put aside today to achieve its goal?

A: Time value of money is one of the most fundamental and basic concepts of investing. The phrase “Time…

Q: JFINEX Corporation is considering a new project that will cost 200,000. It will provide an annual…

A: The NPV can be calculated as the Present Value of cash Inflows-Initial Cost

Q: Given a project with cash outlay today of $100,000. The project is expected to generate cash flows…

A: IRR is the rate at which NPV of the project is zero

Q: You are buying a machine with a down payment of $200,000 and annual payments of $40,000 per year for…

A: The present value of all cost is the net cost of all cost including the down payment and all cost…

Q: A company would like to purchase a machine for $160,000 with a life of 8 years. They estimate a…

A: Solution-In case of calculation of capital recovery cost of annual operating cost is…

Q: If a copy center is considering the purchase of a new copy machine with an initial investment cost…

A: Payback period is a amount of time it takes to recover the investment. In other words it is a time…

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: A startup is considering buying a $295,000 piece of equipment. If it purchases the equipment, it…

A: If loan taken for $295,000 at 3% for 5 year; Yearly EMI = $63,609.12 Now, we calculate the After tax…

Q: Cepeda Manufacturing Company is considering three new projects, each requiring an equipment…

A: Net Present Value is a concept of Capital Budgeting. Net Present Value is calculated by subtracting…

Q: determine how much can we afford to invest to overhaul this machine

A: Present value refers to the current valuation for a future sum. For a given periodic cash flow, the…

Q: Your company is planning to purchase a new log splitter for its lawn and garden business. The new…

A:

Q: Dhofar Art Gallery is adding to its existing buildings at a cost of 200000 OMR. The gallery expects…

A: Year Cash Flow  Discount factor @10% Discounted value 1 20,000 0.90909 18,181.82 2 70,000…

Q: Seema is looking at an investment in upgrading an inspection line at her plant. The initial cost…

A: Capital Recovery: Using the capital recovery factor, you can figure out how much money you have in…

Q: If a copy center is considering the purchase of a new copy machine with an initial investment cost…

A: Note : As per the Q&A guideline we are required to answer the first question only ,please post…

Q: A printing press machine has a cash equivalent of P250,000. For the first three years, it will…

A: Initial cost (C) = P 250000 Profit in year 1 (A1) = P 20000 A2 = P 20000 A3 = P 20000 A4 = P 35000…

Q: Cecil company is considering the of a new machine. The machine cost $227,500 and will generate a…

A: Machine cost (C) = $227500 Cash inflow (A) = $35000

Q: You are interested in purchasing a machine that will save $200,000 per yearbefore taxes. The cost of…

A: Net present value (NPV) is the difference between the present values of cash inflows and cash…

Q: If a copy center is considering the purchase of a new copy machine with an initial investment cost…

A: Payback period = Initial cost / annual cashflow

Q: A new project will cost $40,000 to fund today, and an additional $40,000 next year.  The device…

A: Net Present Value: It helps in analyzing the project's profitability and is computed from the…

Q: Rambus Inc. would like to purchase a production machine for $325,000. The machine is expected to…

A: Total Net savings = (annual savings - Annual maintenance cost) x no. of years = (112500-12500)*3…

Q: An investment that cost $20,000 will produce annual cash flow’s of $5000 for a period of six years.…

A: Investments: Companies invest in stocks and bonds of other companies or governmental entity to…

Q: Spero Industries has purchased new equipment that will provide an annual cash savings of $6,300 over…

A: Solution: Annual cash savings from new equipment = $6,300 Life of project = 7 years IRR of new…

Q: The required investment cost of a new, large shopping center is $50 million. The salvage value of…

A: Cost of a shopping center= $50 million Salvage value of the project= $20 million Project’s life= 15…

Q: You invest in a piece of equipment costing $30,000. The equipment will beused for two years, at the…

A: Calculation of the equivalent net savings per machine hour is shown:

Q: An industrial machine costing $14,000 will produce net cash savings of $5,000 per year. The machine…

A:

Q: The engineers at a design firm have been tapped by an amusement park to design a water sports ride.…

A: Present worth is the present value of cash flows that are expected to occur in the future.

Q: Northern Alliance Medical facility is considering producing a home blood pressure instrument…

A: Net present value is the difference between the present value of cash inflows and present value of…

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.