Longshore Drilling Company (LDC) is a contracting company that lays oil pipeline infrastructure. LDC is considering purchasing a piece of excavating equipment worth $5,000,000. The machine would generate a net $300,000 yearly pre-tax cash flows. The machine would be depreciated over the course of 20 years, at which time it is predicted to have a disposal value of $500,000. LDC’s tax rate is 20%, and the discount rate is 10%.    The Excess Present Value Index of the proposed machinery (rounded to 4 decimal places) is closest to which of the following?    Select one: a. 0.4718 b. 0.4539 c. 2.1617 d. 0.5001 e. 1.2748

Q: Your Company is considering a new project that will require $530,000 of new equipment at the start…

A: Cost of project = $ 530,000 Closing book value = $ 229000 Life = 7 Years Annual depreciation =…

Q: Your company is considering a new project that will require $250,000 of new equipment at the start…

A: Depreciation expense is tax deductible and over a period of the equipment life tax benefit can be…

Q: net investment

A: Cash flow represents the inflow and outflow of cash in a particular period of time for the company.

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A: Net present value (NPV) is used to determine the present value of all future cash flows. Net present…

Q: Your company is considering a new project that will require $100,000 of new equipment at the start…

A: Given:

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A: The value of depreciation tax shield can be calculated as depreciation multiplied by tax rate.

Q: Romagnoli Company is considering a 3-year investment project that involves the purchase of a new…

A: Since we have to handle multiple variables here, we will use Microsoft Excel to get the final…

Q: Mamafu is considering a proposal to manufacture high-protein cricket snacks. The project would make…

A: Net Present Value: The Net Present Value is the difference between initial cash outflow and the…

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A: Note: No intermediate rounding is done. Final answer is two decimal places.Depreciation for each of…

Q: epreciation of $80,000. The existing machine has a current market value of $400,000. The replacement…

A: Net investment required = Purchase price of machine - Sale value of machine

Q: Holmes Manufacturing is considering a new machine that costs $250,000 and would reduce pre-tax…

A: Net Present Value (NPV) is a capital budgeting technique that uses a discount rate to bring all the…

Q: Kelly, Inc. management is considering purchasing a new machine at a cost of $4,133,250.  They expect…

A: Net present value (NPV) is used to determine the present value of all future cash flows. Net present…

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A: Computation:

Q: A company is considering purchasing a special machine to expand one of its production lines. The…

A: Net present value is sum of present value of cash flows. In excel NPV function is used to calculate…

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Q: Zeon, a large, profitable corporation, is considering adding some automatic equipment to its…

A: To identify if the project is worth investing, the Net Present Value of the entire project is…

Q: H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed…

A: Initial investment is $2,400,000 Tax rate is 23% Required rate of return  is 10% Estimated annual…

Q: Techno Lab, a taxpaying​ entity, estimates that it can save $30,000 a year in cash operating costs…

A: Annual Savings in Cash Cost - $30,000 Cost of the machine = $135000 Life = 10 Years Depreciation per…

Q: Madison Manufacturing is considering a new machine that costs $250,000 and wouldreduce pre-tax…

A: In financial management, capital budgeting is a process which determines the profitability and…

Q: What is the NPV of Pigpen’s project?

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A: It is assumed that the present value of tax benefits from the new projects is required to be…

Q: APJ, Inc. is planning to purchase a new machine that will take six years to recover the cost. The…

A: PAYBACK PERIOD = INTIAL INVESTMENT / CASH FLOW PER YEAR  SO , INITIAL INVESTMENT = CASH FLOW PER…

Q: H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed…

A: Net present value is the excess of present value of cash inflows over initial investment made by a…

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A: Replacing machinery may be a huge capital expense for the firm or enterprise therefore a lot of…

Q: fter tax annual cost

A: Cash flow represents the money in and out of the company. It refers to the financial statement that…

Q: HaulCo is considering the purchase of a truck. Over its five year life, it will provide net revenues…

A: Given Information:Initial cost of truck is $65,000 Annual net revenue is $15,000 Salvage value is…

Q: A manufacturing company plans to buy a new piece of equipment for $70,000 which is expected to last…

A: The present value is the value of the sum received at time 0. It is the current value of the sum…

Q: A company is planning to augment its production capacity through equipment additions that will cost…

A: Additional cost (C) = $350000 Increase in income (x) = $250000 Increase in costs (y) = $150000 n = 5…

Q: Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed…

A: Cash flows are the cash generated from the operation of the business organisation. In other words,…

Q: Shunt Technology will spend $800,000 on a piece of equipment that will  manufacture fine wire for…

A: Net investment is the total of all expenses which are incurred to operate or run the project. it…

Q: Your company is considering a new project that will require $10,000 of new equipment at the start of…

A: Annual Depreciation=Cost of Asset-Salvage ValueDepreciable Life

Q: ACE Ltd is evaluating whether it should invest in a machine that costs $100,000. The machine would…

A: Operating cash flows is the cash flow generated from normal operations of business. It can be…

Q: A division of Virginia City Highlands Manufacturing is considering purchasing for $1,500,000 a…

A: Annual depreciation  = (cost of the machine - salvage value)/life = (1,500,000 - 300,000)/10 =…

Q: H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed…

A: Given information: Initial fixed asset investment is $2,400,000 Annual sales amounted to $3,270,000…

Q: Elena's Café is investing in a new commercial refrigeration unit that will cost $40,000. They…

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A: Working Note #1 Computation of Net Cash Flow::  (Fig's in million $) Particulars Year   1 2 3…

Q: United Pigpen is considering a proposal to manufacture high-protein hog feed. The project would make…

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

Q: Macoupin Mining Inc. must purchase a new coring machine that costs $60,000 and will last 15 years…

A: Information Provided: Costs = $60,000 Salvage value = $12,000 Opearting exp = $9000( first year and…

Q: Tasty Bakery Co. is considering a new product line. In order to manufacture the new product, the…

A: If the present value of cash flows is more than the amount of current investment, then the project…

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A: NPV means present value of benefits arises in future from the project. It can be simply calculated…

Q: Boisjoly Enterprises is considering buying a vacant lot that sells for$1.4 million. If the property…

A: We will only answer the first three subparts, for the remaining subparts kindly resubmit the…

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A: Given revenues =135,000 per year Direct production costs =$45,000 fixed costs =$17,500 a year…

Q: United Pigpen is considering a proposal to manufacture high-protein hog feed. The project would make…

A: Net present value or NPV as it is called, is the difference between the present value of cash…

Q: H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed…

A: NPV is the net present value of cash flows i.e. PV of inflows less PV of outflows. PV of outflows is…

Q: United Pigpen is considering a proposal to manufacture high-protein hog feed. The project would make…

A: Formulas: Note: After tax salvage value refer high lighted part.

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.