Improvised explosive devices (IEDs) are responsible for many deaths in times of strife and war. Unmanned ground vehicles (robots) can be used to disarm the IEDs and perform other tasks as well. If the robots cost $130,000 each and the military arms unit signs a contract to purchase 5,000 of them now and another 7,000 one year from now, what is the equivalent annual cost of the contract over a 6-year period at 11% per year interest? The equivalent cost of the contract is determined to be $ .
Q: An interest rate of 12% per year, compounded monthly is equivalent to what nominal and effective int...
A: The nominal interest rate can be defined as the rate of return on an investment with out any adjustm...
Q: default risk of comm
A: Commercial real states are the types of loans in which independent lenders, banks, etc are actively ...
Q: P. to determine the regular payment amount, rounded to the nearest dollar. Consider the following pa...
A: A mortgage is a loan usually on a property where the collateral is the property itself.
Q: Hi there can you please assist on the following below You have just graduated and landed a job as a...
A: Earning par share can be calculated by dividing the market price by earning per share. P/E ratio =Ma...
Q: The interest rate for the first five years of a $95,000 mortgage is 7.2% compounded semiannually. Mo...
A: Given, The mortgage is $95000 Rate is 7.2% compounded annually Term is 25 years.
Q: There was a bit of concern about one of Big Rock's newer entities – Big Rock Paving Company. Managem...
A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first t...
Q: The returns on the Bledsoe Small-Cap Fund are the most volatile of all the mutual funds offered in t...
A: Sharp ratio It is a measure of risk adjusted return. In other words, it tells about the excess retur...
Q: Selling price were sh. 40 per unit for A and sh. 20 per unit for B respectively. Average sales retur...
A: An estimate for a company's total revenue for the upcoming financial periods is called sales budget....
Q: Setrakian Industries needs to raise $69.5 million to fund a new project. The company will sell bonds...
A: The number of bonds required to be sold is calculated as funds to be raised divided by bond price
Q: Helene invests R5918 in a savings account that pays interest at 6% pa compounded monthly. Exactly 5 ...
A: Invested amount (X) = R 5918 r = 6% monthly compounded = 0.5% per month for n = 5 years (60 months) ...
Q: Consider the following cash flows: Year Cash Flow -$29,900 13,800 15,100 11,500 1 3 a. What is the p...
A: Profitability index measures the return generated by each dollar of investment. Itcan be calculated ...
Q: Anna loaned P450,000 at 10% compounded annually. She signed a contract to repay the loan in 20 equal...
A: Loan amount (PV) = P450,000 Number of annual payment (n) = 20 Interest rate (r) = 10%
Q: A bank in Toronto charges 3.25% commission to buy and sell currencies. Assume that the current excha...
A: Amount of Canadian Dollars that may be required to be paid for purchasing certain amount of US Dolla...
Q: he cost of project X is $100, and it would enerate $120 in one year without risk. If a firm oes not ...
A: The value added by the project would be the net present value of the project which is present value ...
Q: On October 1, 2021, POGI Company purchased 4,000 of the P1,000 face amount, 10% bonds of GANDA Compa...
A: Bonds are defined as the units of the corporate debt, which are issued through the companies as well...
Q: If you perform a NPV analysis on a perspective investment using a "d" = 15% and: a. the NP...
A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only on...
Q: What happens to junk bonds in a recession
A: A junk bond refers to that that bond issued by companies that do not have an investment grade credit...
Q: If the probability of a recession is 0.3, normal growth is 0.4 and a boom is 0.3, and the payoff in ...
A: Probability Payoff 0.3 100 0.4 300 0.3 500
Q: Watch the video and then solve the problem given below. Click here to watch the video. You are consi...
A: We need to find prepare the loan amortization table for first two payment. For this we need to under...
Q: (1) pay ¢30,500,000 in cash or (2) pay ¢47,500,000 in two and a half years at a 23.5% convertible ra...
A: The value of a certain amount of money decreases over time due to various factors like inflation and...
Q: In 2014, ABC has net income of P5,000,000, and it has 2,000,000 shares of common stock outstanding. ...
A: Net income = P 5 million Number of shares = 2 million Stock price initially = P 30
Q: Chef Fabio does beginning inventory on Thursday night and finds that he has $1456 in food products i...
A: The cost as a percentage of the sales helps in finding out exactly how much profit we are earning an...
Q: A student loan of R6978 is to be repaid by 18 equal monthly instalments. Assuming that instalments a...
A: Loan amount (PV) = R6978 Interest rate = 18% Monthly interest rate (r) = 18%/12 = 1.50% Number of mo...
Q: Fiesta Corporation intends to come up with capital through making a public offering of its securitie...
A: Solution:- A corporation can raise money either through public offering or through private placement...
Q: You win a lottery that will pay you $120,000 per month for 12 months, starting 1 month from now. Wha...
A: Present value of annuity in form of lottery winnings can be calculated as: = Annuity amount * Presen...
Q: Husband and Wife have two biological children and one adopted child. Now that the adoption is finali...
A: adoption is a process of getting non-biological child of someone else legally.
Q: Wine and Roses, Incorporated, offers a bond with a coupon of 8.0 percent with semiannual payments an...
A: Face value (FV) = $1000 Coupon rate = 8.0% Semi annual coupon amount (C) = 1000*0.08/2 = $40 Years t...
Q: A city is evaluating the installation of a garbage incinerator on the outskirts of town. The cost of...
A: Note: $25,000 environmental study cost, which is irrelevant for decision making. So, this cost shoul...
Q: Mr. Lee purchased a small condominium. He paid P350,000 as down payment and agreed to pay P35,000 ev...
A: Down payment (DP) = P350,000 Quarterly payment (P) = P35,000 Period = 5 years Number of quarterly pa...
Q: Usando un MARR de 12 % y presumiendo una vida útil de 10 años para las tres alternativas A , B y C ,...
A: Given: Particulars Amounts MARR 12% Years 10 Initial cost $150.00 Annual benefit $33.50
Q: How to solve for the current price in the given equation
A: Bond valuation refers to a method which is used to compute the current value or present value (PV) o...
Q: Which of the following statements is/correct regarding the Cash Budget? The cash budget is a stateme...
A: Cash budget - It is an estimate of cash inflow and cash outflow of a company . Cash budget are usua...
Q: Let the current spot rate be 1.21 Sf/$. Let the exercise price be 1.20 $/€. Let the volatility of th...
A: Many Thanks for the Question. Bartleby's Guideline: “Since you have posted a question with multiple ...
Q: You own stocks in an oil palm plantation company, and you read in the financial press that a recent ...
A: Debt to equity ratio has been increased from 30℅ to 55℅.
Q: Yield to maturity The bond shown in the following table pays interest annually. (Click on the icon h...
A: Given, the par value is $1000 Coupon rate is 7% Term to maturity is 9 years and market price is $11...
Q: A mortgage balance of $25,000 is to be repaid over a 10-year term by equal monthly payments at 5.6% ...
A: Here, Mortgage balance = $25,000 Term = 10 years Rate of interest = 5.6% compounded semi-annually Mo...
Q: a. What will be the principal component of the sixteenth payment? Principal $ b. What will be the in...
A: Loan amortization refers to a schedule which is prepared to shows the periodic loan payments, amount...
Q: what are the key characteristics of active fund management and passive fund management, focusing on ...
A: The key characteristics of active fund management is the frequent buying and selling in an attempt t...
Q: nterest at 9% tc 18, 1995. What a
A: Simple interest is calculated on the loan's principal amount.
Q: Data to be used 1 Date closing market index value closing price for PG closing price for F 2 1/02/2...
A: Given: 1 Date closing market index value closing price for PG closing price for F 2 1/02/2017 2...
Q: TVM HOMEWORK ASSIGNMENT 1. You have $12,000 to invest. You need the money in 13 years, and you expec...
A: Present value (PV) = $12000 Interest rate (r) = 6% Period (n) = 13 years
Q: 1. Calculate the receivables turnover ratios and days to collect for Hayes Companies and Softee S 2-...
A: In this given case, the accounts receivables ,net of allowance is not given for Softee sodas for 201...
Q: еВook The Paulson Company's year-end balance sheet is shown below. Its cost of common equity is 18%,...
A: Weighted average cost of capital WACC gives the firms combined cost of capital, including the equity...
Q: vity Location Amou
A: Finance charge is the cost that normally charged for using credit card.
Q: Dausin Design offers bonds with a coupon rate of 9 percent per year, paid semiannually. The yield to...
A: Solution:- We know, Current Price of a bond = Present Value of Cash Inflows receivables from bond. C...
Q: The ingredients forryour skillet brownie cost $1.89. You want your food cost percentage for this ite...
A: Food cost percentage is variable cost ratio. The minimum sales price will be calculated by dividing ...
Q: Find the maturity value of a note for 15,000 pesos at 12% ordinary simple interest for 182 days.
A: Ordinary simple interest makes use of 360 days in a year. It does not uses 365 days in a year.
Q: As per Capital Asset Pricing Model (CAPM) : Re=Rf+(Rm-Rf)βwhere, Re= Required rate of returnRf= Ris...
A: 4.092% was obtained using the CAPM model. CAPM model refers to the capital asset pricing model.
Q: The ordered pairs (0 , 5000) and (10 , 13591.41) represent the value of an investment at two differe...
A: Given, The investment at year 0 is 5000. The investment after 10 years is 13591.41
Q: All the statements are incorrect regarding current ratio except? a. The more predictable a firm's ca...
A: Solution:- Current Ratio means the ratio of current assets to current liabilities of a firm. It meas...
Improvised explosive devices (IEDs) are responsible for many deaths in times of strife and war. Unmanned ground vehicles (robots) can be used to disarm the IEDs and perform other tasks as well. If the robots cost $130,000 each and the military arms unit signs a contract to purchase 5,000 of them now and another 7,000 one year from now, what is the equivalent annual cost of the contract over a 6-year period at 11% per year interest?
The equivalent cost of the contract is determined to be $ .
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
- Gina Ripley, president of Dearing Company, is considering the purchase of a computer-aided manufacturing system. The annual net cash benefits and savings associated with the system are described as follows: The system will cost 9,000,000 and last 10 years. The companys cost of capital is 12 percent. Required: 1. Calculate the payback period for the system. Assume that the company has a policy of only accepting projects with a payback of five years or less. Would the system be acquired? 2. Calculate the NPV and IRR for the project. Should the system be purchasedeven if it does not meet the payback criterion? 3. The project manager reviewed the projected cash flows and pointed out that two items had been missed. First, the system would have a salvage value, net of any tax effects, of 1,000,000 at the end of 10 years. Second, the increased quality and delivery performance would allow the company to increase its market share by 20 percent. This would produce an additional annual net benefit of 300,000. Recalculate the payback period, NPV, and IRR given this new information. (For the IRR computation, initially ignore salvage value.) Does the decision change? Suppose that the salvage value is only half what is projected. Does this make a difference in the outcome? Does salvage value have any real bearing on the companys decision?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?Mallette Manufacturing, Inc., produces washing machines, dryers, and dishwashers. Because of increasing competition, Mallette is considering investing in an automated manufacturing system. Since competition is most keen for dishwashers, the production process for this line has been selected for initial evaluation. The automated system for the dishwasher line would replace an existing system (purchased one year ago for 6 million). Although the existing system will be fully depreciated in nine years, it is expected to last another 10 years. The automated system would also have a useful life of 10 years. The existing system is capable of producing 100,000 dishwashers per year. Sales and production data using the existing system are provided by the Accounting Department: All cash expenses with the exception of depreciation, which is 6 per unit. The existing equipment is being depreciated using straight-line with no salvage value considered. The automated system will cost 34 million to purchase, plus an estimated 20 million in software and implementation. (Assume that all investment outlays occur at the beginning of the first year.) If the automated equipment is purchased, the old equipment can be sold for 3 million. The automated system will require fewer parts for production and will produce with less waste. Because of this, the direct material cost per unit will be reduced by 25 percent. Automation will also require fewer support activities, and as a consequence, volume-related overhead will be reduced by 4 per unit and direct fixed overhead (other than depreciation) by 17 per unit. Direct labor is reduced by 60 percent. Assume, for simplicity, that the new investment will be depreciated on a pure straight-line basis for tax purposes with no salvage value. Ignore the half-life convention. The firms cost of capital is 12 percent, but management chooses to use 20 percent as the required rate of return for evaluation of investments. The combined federal and state tax rate is 40 percent. Required: 1. Compute the net present value for the old system and the automated system. Which system would the company choose? 2. Repeat the net present value analysis of Requirement 1, using 12 percent as the discount rate. 3. Upon seeing the projected sales for the old system, the marketing manager commented: Sales of 100,000 units per year cannot be maintained in the current competitive environment for more than one year unless we buy the automated system. The automated system will allow us to compete on the basis of quality and lead time. If we keep the old system, our sales will drop by 10,000 units per year. Repeat the net present value analysis, using this new information and a 12 percent discount rate. 4. An industrial engineer for Mallette noticed that salvage value for the automated equipment had not been included in the analysis. He estimated that the equipment could be sold for 4 million at the end of 10 years. He also estimated that the equipment of the old system would have no salvage value at the end of 10 years. Repeat the net present value analysis using this information, the information in Requirement 3, and a 12 percent discount rate. 5. Given the outcomes of the previous four requirements, comment on the importance of providing accurate inputs for assessing investments in automated manufacturing systems.
- Improvised explosive devices (IEDs) are responsible for many deaths in times of strife and war. Unmanned ground vehicles (robots) can be used to disarm the IEDs and perform other tasks as well. If the robots cost $140,000 each and the Military Arms Unit signs a contract to purchase 4000 of them now and another 6000 one year from now, what is the equivalent annual cost of the contract over a 4-year period at 10% per year interest?Delaware Chemicals is considering the installation of a computer process control system in one of its processing plants. This plant is used about 40% of the time, or 3,500 operating hours per year, to produce a proprietary demulsification chemical; during the remaining 60% of the time, it is used to produce other specialty chemicals. The annual production of the demulsification chemical amounts to 30,000 kilograms per year, and it sells for $15 per kilogram. The proposed computer process control system will cost $65,000 and is expected to provide specific benefits in the production of the demulsification chemical as follows:(i) First, the selling price of the product could be increased by $2 per kilogram because the product would be of higher purity, which translates into better demulsification performance.(ii) Second, production volumes would increase by 4,000 kilograms per year as a result of higher reaction yields, without any increase in requirements for raw material quantities or…Delaware Chemicals is considering the installation of a computer process control system in one of its processing plants. This plant is used about 40% of the time, or 3,500 operating hours per year, to produce a proprietary demulsification chemical; during the remaining 60% of the time, it is used to produce other specialty chemicals. The annual production of the demulsification chemical amounts to 30,000 kilograms per year, and it sells for $15 per kilogram. The proposed computer process control system will cost $65,000 and is expected to provide specific benefits in the production of the demulsification chemical as follows: First, the selling price of the product could be increased by $2 per kilogram because the product would be of higher purity, which translates into better demulsification performance. Second, production volumes would increase by 4,000 kilograms per year as a result of higher reaction yields, without any increase in requirements for raw material quantities or…
- Delaware Chemicals is considering the installation of a computer process control system in one of its processing plants. This plant is used about 40% of the time, or 3,500 operating hours per year, to produce a proprietary demulsification chemical; during the remaining 60% of the time, it is used to produce other specialty chemicals. The annual production of the demulsification chemical amounts to 30,000 kilograms per year, and it sells for $15 per kilogram. The proposed computer process control system will cost $65,000 and is expected to provide specific benefits in the production of the demulsification chemical as follows: First, the selling price of the product could be increased by $2 per kilogram because the product would be of higher purity, which translates into better demulsification performance. Second, production volumes would increase by 4,000 kilograms per year as a result of higher reaction yields, without any increase in requirements for raw material quantities or…The U.S. Navy’s robotics lab at Point Loma Naval Base in San Diego is developing robots that will follow a soldier’s command or operate autonomously. If one robot would prevent injury to soldiers or loss of equipment valued at $1.5 million per year, how much could the military afford to spend now on the robot and still recover its investment in 4 years at 8% per year?APSco, a large electronics subcontractor for the Air Force, needs to immediately acquire 10 soldering machines with specially prepared jigs for assembling components onto circuit boards. More machines may be needed in the future. The lead production engineer has outlined two simplified, but viable, alternatives. The company’s MARR is 15% per year and capitalized cost is the evaluation technique.Alternative LT (long-term). For $8 million now, a contractor will providethe necessary number of machines (up to a maximum of 20), now andin the future, for as long as APSco needs them. The annual contract feeis a total of $25,000 with no additional per-machine annual cost. Thereis no time limit placed on the contract, and the costs do not escalate.Alternative ST (short-term). APSco buys its own machines for $275,000each and expends an estimated $12,000 per machine in annualoperating cost (AOC). The useful life of a soldering system is 5 years.
- Your company operates a fleet of light trucks that are used to provide contract delivery services. As the engineering and technical manager, you are analyzing the purchase of 55 new trucks as an addition to the fleet. These trucks would be used for a new contract the sales staff is trying to obtain. If purchased, the trucks would cost $21,200 each; estimated use is 20,000 miles per year per truck; estimated operation and maintenance and other related expenses (year-zero dollars) are $0.45 per mile, which is forecasted to increase at the rate of 5% per year; and the trucks are MACRS (GDS) three-year property class assets. The analysis period is four years; t = 38%;MARR = 15% per year (after taxes; includes an inflation component); and the estimated MV at the end of four years (in year-zero dollars) is 35% of the purchase price of the vehicles. This estimate is expected to increaseat the rate of 2% per year. Based on an after-tax, actual-dollar analysis, what is the uniform annual…The president of Biomed Products is considering a long-term contract to outsource maintenance and operations that will significantly improve the energy efficiency of their imaging systems. The pay¬ment schedule has two large payments in the first years with continuing payments thereafter. The proposed schedule is $200,000 now, $300,000 four years from now, $50,000 every 5 years, and an annual amount of $8000 beginning 15 years from now and continuing indefinitely. Determine the capitalized cost at 8% per year.Komoka Enterprises needs someone to supply it with 140,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you’ve decided to bid on the contract. It will cost you $920,000 to install the equipment necessary to start production. The equipment will be depreciated at 30% (Class 10), and you estimate that it can be salvaged for $95,000 at the end of the five-year contract. Your fixed production costs will be $350,000 per year, and your variable production costs should be $15.10 per carton. You also need an initial net working capital of $125,000 . If your tax rate is 35% and you require a 14% return on your investment, what bid price