Pittsburgh Custom Products (PCP) purchased a new machine for ram cambering large I beams. PCP expects to bend 80 beams at $2000 per beam in each of the first 3 years, after which it expects to bend 100 beams per year at $2500 per beam through year 8. If the company’s minimum attractive rate of return is 18% per year, what is the present worth of the expected revenue?

Q: olorado Cleaning has a 5-year maximum acceptable payback period. The firm is considering the…

A: PAYBACK PERIOD : It is the period during which the firm recovers its initial cashflows. formula:…

Q: RYN steel works bought an innovative equipment for steel beam manufacturing. The company expects to…

A: Present worth = Future value / (1+r)^n

Q: Geary machine shop is considering a four year project to improve its production efficiency. Buying a…

A: Net present value is one of the capital budgeting techniques. When a company is willing to invest in…

Q: Thompson Mechanical Products is planning to set aside $150,000 now for possible replacement of large…

A: Computation of future compounded amount: Answer: Future compounded amount is $343,163.66

Q: the MACRS five-year class, and it will have a salvage value at the end of the project of $68,000.…

A: Year EBDT Depreciation Rate  Depreciation (Cost*Rate) PBT(EBDT -Depreciation) Tax@22%(PBT*Rate) Net…

Q: Elearning Company would like to develop its technology process by purchasing a production equipment…

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

Q: A company is considering the purchase of a new electron beam welder at a price of $250,000. The…

A: Working capital, also known as net working capital (NWC), is the difference between a company's…

Q: Your firm is thinking about investing $200,000 in the overhaul of a manufacturing cell in a lean…

A: Calculation of annual equivalent worth: Investment = $200,000 Revenues = $30,000  Expenses = $10,000…

Q: Geller Machine Shop is considering a four-year project to improve its production efficiency. Buying…

A: Cost of machine = $400,000 Annual pretax cost savings = $155,000 MACRS 5 year class  Salvage value =…

Q: A company is considering expanding their production capabilities with a new machine that costs…

A: Present value is the value of future cashflow dicounted at specified rate to today's date. formula:…

Q: A company is considering the purchase of a new machine for $61000. Management predicts that the…

A: Payback period of the machine means in how much years or period the initial investment amount can be…

Q: A drugstore chain has just purchased a fleet of five pickup trucks to be used for delivery in a…

A: Total cost is calculated by deducting the salvage value from initial cost and adding other incomes.…

Q: Galvanized Products is considering purchasing a new computer system for their enterprise data…

A: The purchase price Galvanized products is $100,000 and borrowed 1/4 of purchase price i.e., $25,000.…

Q: A company that manufactures a revolutionary aeration system combining coarse and fine bubble…

A: Equivalent annual cost is yearly cost of operating, maintaining and owing asset over its full life.

Q: The sales and finance team of a car company is evaluating a new proposed luxury model of its brand…

A: Present worth computes the existing value of future benefits by discounting future worth with a…

Q: Coast-to-Coast Inc. is considering the purchase of an additional delivery vehicle for $70,000…

A: The evaluations of different projects are done by the company. Before adding any investment, the…

Q: Pittsburgh Custom Products (PCP) purchased a new machine for ram-cambering large I beams. PCP…

A: In the first 3 years Number of beams per year = 50 Price of per beam = $1,200 For the next 12 years…

Q: at is the expected net income (after tax) in Year 3 if the proposed investment is undertaken? Round…

A: Summary of the relevant information provided in the question : New Machine Cost = $ 303,000 Sales…

Q: Sensotech, Inc., a maker of microelectromechanical systems, believes it can reduce product recalls…

A: Given information: NPV of the project is $225,000 MARR is 15% Number of years of investment is 4…

Q: During an executive meeting, managers are reviewing potential projects for the incoming year. A…

A: Present Worth In this method the cash flows are discounted to a single present value. MARR is used…

Q: Snow Inc. has just completed development of a new cell phone. The new product is expected to produce…

A: Net present value method (NPV): Net present value method is the method which is used to compare the…

Q: Kowloon Company’s plant produces door and window systems for sale to large construction companies.…

A: Required:Compute the NPVExplain non-financial considerations in the purchase decision.

Q: A company plans to spend $ 165126 to install a new machine. Annual maintenance cost is $ 10831.…

A: Information Provided: Initial cost = $165,126 Annual maintenance cost = $10,831 Annual Income =…

Q: Alpha Company is planning to invest in a machine, the use of which will result in the following:•…

A: Annual revenue $10000 Increase $5000 p.a till 9 years Year 10 onward revenue - $52000 p.a MARR - 10%…

Q: Crow Corporation, a company that specializes in precision metal fabrication, is conducting a study…

A: Given information: Interest rate is 12% Number of years is 2 Cost is $260,000

Q: A firm has installed a manufacturing line for packaging materials. The firm plans to produce 45 tons…

A: A concept through which it is studied that the current worth of money is higher than its future…

Q: In your company-owned business, you are contemplating to purchase a new machine for $100,000 that…

A: Investment = 100,000N = 4 yearsAnnual Revenue = 10,000Rate = 15%We need a positive Net present value…

Q: An office supply company has purchased a light duty delivery truck for $15,000. It is anticipated…

A: Net present value or annual worth is the present value of all the cash flows. It is used in capital…

Q: A company plans to spend $ 153703 to install a new machine. Annual maintenance cost is$ 11339.…

A: An initial investment of new machine = $153703 Annual maintenance cost = $11339 Annual income =…

Q: piece of new equipment has been proposed by engineers to increase the productivity of a certain…

A:

Q: You have been asked to make a recommendation about whether to spend $115,000 on a new Laser cutting…

A: Here, we have been given the real discount rate, which is 8%. Both salvage value and overhaul costs…

Q: Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying…

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

Q: The engineering team at Manuel's Manufacturing, Inc., is planning to purchase an enterprise resource…

A: Solution:- Present worth means the net present value. It means the net present value of benefits…

Q: a company is considering the purchase of a new machine for 480,000. Management predicts that the…

A: Calculation of Annual operating cash flows :- Sales                                      180,000…

Q: Sensotech, Inc., a maker of microelectromechanical systems, believes it can reduce product recalls…

A: MARR is return that an proposal must earn to qualify for investment. Investors or Manager have…

Q: The sales and finance team of a car company is evaluating a new proposed luxury model of its brand…

A: Present worth analysis is an analysis in which we convert all the cash flows to present worth using…

Q: Corning Ceramics expects to spend $400,000 to upgrade equipment two years from now. If the company…

A: Amount to be spent 2 years from now=$400,000 Minimum attractive rate of return=20% p.a. Formula to…

Q: A small oil company wants to replace its Micro Motion Coriolis flowmeters with nickel-based steel…

A: The computations as follows:

Q: Thomasville Furniture Industries offers several types of high-performance fabrics that are capable…

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

Q: Packaging equipment for Xi Cling Wrap costs $60,000 and is expected to result in end-of-year net…

A: MARR is used as a hurdle rate in the capital budgeting projects. It is that minimum rate which an…

Q: Your fim is thinking about investing S200.000 in the overhaul of a manufacturing cell in a lean…

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

Q: Acompany plans to spend $154810 to install a new machine. Annual maintenance cost is $12581.…

A: MARR = 9% p.a.   Cash Flows: Year Cash Flow Reference 0 -154,810 Initial Cost 1 20,551 Annual…

Q: The sales and finance team of a car company is evaluating a new proposed luxury model of its brand…

A: Present value: This is the amount of future value reduced or discounted at a rate of interest till…

Q: CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a…

A: Net present value is is one of the capital budgeting technique widely used by the management to…

Q: The sales and finance team of a car company is evaluating a new proposed luxury model of its brand…

A: a. The calculation is: NPV is negative. Hence, the proposed investment is not a profitable…

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.