corporate jet costs $1,350,000 and will incur $200,000 per year in maintenance costs. The jet can be sold for $650,000 after 5 years. What is the capital recovery? MARR = 15%
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A corporate jet costs $1,350,000 and will incur $200,000 per year in maintenance costs. The jet can be sold for $650,000 after 5 years. What is the capital recovery? MARR = 15%
$506,310
$306,310
$270,000
$650,000
Your company just purchased a bar-code system for $70,000. It has a five-year MACRS class life. The expected market value of the bar-code system in 3 years is $32,000. What is the gain (or loss) when this asset is sold at end year 3?
$11,120
$11,840
$5,120
-$1,600
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- Please use a financial calculator to solve. Be sure to list your steps. You are evaluating two different silicon wafer milling machines. The Techron I costs $237,000, has a three-year life, and has pretax operating costs of $62, 000 per year. The Techron II costs $ 415,000, has a five - year life, and has pretax operating costs of $ 35,000 per year. For both milling machines, use straight - line depreciation to zero over the project's life and assume a salvage value of $39, 000. If your tax rate is 21 percent and your discount rate is 8 percent, compute the EAC for both machines. (Your answer should be a negative value and indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)Mustang Auto Parts, Inc. is considering one oftwo forklift trucks for its assembly plant.• Truck A costs $15,000 and requires $3,000 annually in operating expenses. It will have a $5,000salvage value at the end of its three-year servicelife.• Truck B costs $20,000, but requires only $2,000annually in operating expenses; its service life isfour years, at which time its expected salvage valuewill be $8,000.The firm’s MARR is 12%. Assuming that the trucksare needed for 12 years and that no significantchanges are expected in the future price and functional capacity of each truck, select the most economical truck on the basis of AE analysis.A small manufacturing firm is considering the purchase of a new machine to modernize one of its current production lines. Two types of machines are available on the market. The lives of machine A and machine B are 4 years and 6 years, respectively, but the firm does not expect to need the service of either machine for more than 5 years. The machines have the following expected receipts and disbursements. Item Machine A (USD) Machine B(USD) First cost 325k 425k Service life 4 years 6 years Estimated Salvage Value 30k 50k Annual Opertaing & Maintenance Costs 40k 26k Oil Filter Change every other year 5k NONE Enginer Overhaul 10k every 3 years 14k every 4 years The firm always has another option: To lease a machine at 150k a year, fully maintained by the leasing company. After four years of use, the salvage value for machine B will remain at 50k. How many decision alternatives are there?…
- ) A certain warehouse is worth P1,650,000. The average value of the merchandise in the warehouse is P1,500,000. The annual insurance rate on the warehouse is 1% and the merchandise stored in the warehouse, 0.9%. A proposal for the installation of a fire sprinkler system is being consider. The system will cost P80,000 and will effect a savings of 70% in a both insurance premiums. Monthly maintenance is estimated to be P500 and annual taxes is P4,000 for the sprinkler system. The owners of the warehouse demand that the investment in such equipment be written-off within 10 years. Invested capital can be expected to earn a minimum return of about 17%. Would you advice the installation? (Uses ROR)2.5. An electric cooperative is considering the use of a concrete electric pole in the expansion of its power distribution lines. A concrete pole costs P18,000 each end will last 20 years. The company is presently using creosoted wooden poles which cost P12,000 per pole and will last 10 years. If money is worth 12 per cent, which pole should be used. Assume annual taxes amount to 1 per cent of first cost and zero salvage value in both cases#23 * Using NPW to Decide Between Competing Projects: Machine X has an initial cost of $12,000 and annual maintenance of $700 per year. It has a useful life of four years and no salvage value at the end of that time. Machine Y costs $22,000 initially and has no maintenance costs during the first year. Maintenance is $200 at the end of the second year and increases by $200 per year thereafter. Machine Y has a useful life of eight years and an anticipated salvage value of $5,000 at the end of its useful life. If the MARR is 6%, what is the approximate Net Present Worth (NPW) of machine X? A. -$28,563 B. -$25,852 C. -$32,085 D. -$22,318
- n Project A Project B 0 -$7,000 -$5,000 1 -$2,500 -$2,000 2 -$2,000 -$2,000 3 -$1,500 -$2,000 4 -$1,500 -$2,000 5 -$1,500 -$2,000 6 -$1,500 -$2,000 7 - -$2,000 8 - - Suppose projects A and B are mutually exclusive. The required service period is 8 years and comparable equipment will be leased for $3,000 per year payable at the end of each year for the remaining years of the required service period. Which project is a better choice at 15%? Use PW(15%) criterion and show your equation with numbers plugged into factors and your numerical result for each option.A man is considering putting up his own enterprise, where an investment of 800,000Php will be required and will take 15 years to recoup . He estimates his annual sales at 800,000Php along with the following operating costs. Materials ............................. 160,000Php/ yearLabor ............................. 280,000Php/ yearOverhead ............................. (40,000 + 10% of sales) Php/ yearSelling Expense............................. 60,000Php/ yearThe man will give up his regular job paying 216,000 Php per year and devote all his time to the operation of his business, this will result in decreasing his labor cost by 40,000Php per year, material cost by 28,000Php per year and overhead cost by 32,000 Php per year. If the man expects to earn at least 20% of his capital, should he invest? solve in the present worth cost methodAt 5.4% a bridge cost P 290 M with a life of 19 years. The bridge must be partially rebuilt at a cost of P 80 M at the end of each of the 19 years. Calculate the capitalized cost if an annual maintenance of P 520 000 is required.
- a) Calculate the discounted payback period for the project. b) Calculate the Net Present Value of the project. c) Mr. Mokhodu, the recently hired manager for this potential project is not convinced that using the IRR is sufficient to assess the project’s viability. Calculate the Modified Internal Rate of Return (MIRR) that should be used.Nodhead College needs a new computer. It can either buy it for $295,000 or lease it from Compulease. The lease terms require Nodhead to make six annual payments (prepaid) of $71,000. Nodhead pays no tax. Compulease pays tax at 35%. Compulease can depreciate the computer for tax purposes straight-line over five years. The computer will have no residual value at the end of year 5. The interest rate is 6%. a. What is the NPV of the lease for Nodhead College? b. What is the NPV for Compulease?Last two parts only 8,9 Plz asap