Harold needs to buy a new food processor. He has a choice between a Food Pro and a Bargain Betty proces Neither will have any resale (salvage) value at the end of its useful life. First Cost = Annual power & maint. = Useful life= Harold's MARR= Food Pro $380 $30 10 years 6% The lowest common multiple of lives is: Bargain Betty $110 $60 4 years Try Again What is the present worth of each alternative? Food Pro Bargain Betty Which processor should Harold buy? Try Again Try Again
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- 3. GuRL Corp. is considering selling its old popcorn machine and replacing it with a newer one. The old machine has a book value of P5,000, and its remaining useful life is five years. Annual costs are P4,000. A high school is willing to buy it for P2,000. New equipment would cost P18,000 with annual operating costs of P1,500. The new machine has an estimated useful life of five years. Should the machine be replaced? Prepare a differential analysis report to support your answer.Note:- not use of the excel Q)You plan to purchase a new TIG welder for your company. It will cost $2,800 now and will need $60 in repairs at the end of the 3rd year and $130 in repairs at the end of the 4th year. It will be sold for scrap metal for $115 at the end of the 5th year. With an 7.25% APR compounded monthly, what is the present worth of the welder? Answer should be rounded to the nearest cent (ie two decimal places).Give only typing answer with explanation and conclusion Tony’s Racing Engines, Inc. wants to replace a 10-year-old cylinder boring machine with a new machine that is more efficient. The old machine cost $30,000 when new and has a current book value of $9,500. TRE can sell the machine to a buyer for its current book value. TRE’s tax rate is 25%. What is the effect of the sale of the old machine on the initial outlay for the new machine?
- You need a new oven for your bakery. Your current oven is worn out so you are trying to decide which one of two ovens to buy as a replacement. Whichever oven you purchase will be replaced after its useful life. Oven A costs $25,000 and costs $3,000 a year to operate over an 8-year life. Oven B costs $20,000 and costs $4,500 a year to operate over a 6-year life. Given this information, which one of the following statements is correct if the applicable discount rate is 10 percent? A) The equivalent annual cost of oven A is -$7,481. B) The equivalent annual cost of oven B is -$8,209. C) Oven A lowers the annual cost by $1,406 as compared to oven B. D) Oven B lowers the annual cost by $1,598 as compared to oven A.Speed Queen Laundromat faces a 40% tax rate and uses a 12.7% discount rate. Speed Queen is purchasing a new $49,800 touchscreen laundry system that will raise annual sales by $5,800 and lower annual operating costs by $14,300. This system, which will have no salvage value, is expected to have a 7-year life and will be depreciated (straight-line) to zero. What is the NPV of purchasing the new laundry system? a. −$14,329 b. $5,148 c. $16,742 d. $23,094 e. −$1,204Can i get help with this question please 4a1) Peter is considering the purchase of one of two machines used in his industrial plant. Machine PP has a life of two years, costs $52 initially, and then $60 per year in maintenance costs. Machine QQ has a life of three years, costs $82 initially, and requires $50 in annual maintenance costs. Either machine must be replaced at the end of its life. Which is the better machine for the firm? Explain. The discount rate is 12% and the tax rate is zero.
- Anderson Inc. uses packing machines to prepare their product for shipping. One machine costs $136,000 and lasts about 5 years before it needs to be replaced. The operating cost per machine is $6,500 a year. Ignoring taxes, what is the equivalent annual cost of one packing machine if the required rate of return is 11%? Multiple Choice $49,904 $51,036 $44,298 $43,298 $50,776A company is considering replacing a machine (defender) that was boughtsix years ago for $50,000 and has now malfunctioned. The machine can be repaired toextend its life by Öve more years. If repaired, the machine will require an operating costof $10,000 per year. If it is replaced, the new machine (challenger) will cost $44,000, willlast for six years, and will have operating expenses of $5,000 per year. The challengerwill have zero salvage value at the end of its six year life. The malfunctioned defendercan be sold at a current market value of $15,000. If MARR is 12% per year, what isthe maximum amount that the company should spend to repair the existing machineinstead of switching to the challenger? Use the outsider viewpoint method. (Note: Allvalues are before taxes, not tax calculations are necessary). please dont use excellCar A initially costs $500 more than Car B, but it consumes 0.04 gallon/mile versus 0.05 gallon/mile for B. Both vehicles last 8 years, and B’s salvage value (the value when it is traded in after 8 years) is $100 smaller than A’s. Fuel costs $2.40 per gallon. Other things being equal, at how many miles of use per year (X) is A preferred vs. B?
- GiGi Industries must replace its magnesium purification system. Quick & Dirty Systems sells a relatively cheap purification system for $10 million. The system will last 6 years. Do-It-Right sells a sturdier but more expensive system for $12 million; it will last for 8 years. The cheaper system will require $1.1 million in operating costs per year which is 10% higher than the more expensive system. Both will be depreciated straight-line to a final value of zero over their useful lives; neither will have any salvage value at the end of its life. The firm’s tax rate is 30 percent and the discount rate is 11 percent. Which system should GiGi install?Ken Owens Construction specializes in small additions and repairs. His normal charge is $400/day plus materials. Due to his physical condition, David, an elderly gentleman, needs a downstairs room converted to a bathroom. Ken has produced a bid for $5000 to complete the bathroom. He did not provide David with the details of the bid. However, they are shown here. The towns social services has asked Ken if he could reduce his bid to $4000. Should Ken accept the counter offer? B. How much would his income be reduced? C. If the towns social services guaranteed him another job next month at his normal price, could he accept this job at $4000?Shonda & Shonda is a company that does land surveys and engineering consulting. They have an opportunity to purchase new computer equipment that will allow them to render their drawings and surveys much more quickly. The new equipment will cost them an additional $1.200 per month, but they will be able to increase their sales by 10% per year. Their current annual cost and break-even figures are as follows: A. What will be the impact on the break-even point if Shonda & Shonda purchases the new computer? B. What will be the impact on net operating income if Shonda & Shonda purchases the new computer? C. What would be your recommendation to Shonda & Shonda regarding this purchase?