The management of XY Company is considering to purchase an equipment to be attached with the main manufacturing machine. The equipment will cost $6,000 and will increase annual cash inflow by $2,200. The useful life of the equipment is 6 years. After 6 years it will have no salvage value. The management wants a 20% return on all investments. Compute net present value (NPV) of this investment project.

Q: As a financial analyst, you must evaluate a proposed project to produce printer cartridges. The…

A: Given information: Purchase price is $65,000 Annual sales 4,000 units at a price of $50 per unit…

Q: As a financial analyst, you must evaluate a proposed project to produce printer cartridges. The…

A: As depreciation at t = 0 is being fully depreciated, therefore depreciation will $0.

Q: Alter company's manager has proposed installing an equipment that will cost $ 16,00, have a 8-year…

A: The amount of cash flow generated yearly throughout the life of an investment is referred to as the…

Q: Required: Prepare a Table that determines the net present value of this machine.

A: Given information is: GI Jane, Corporation, is considering the purchase of a machine that would cost…

Q: A new machine costing $100,000 is expected to save the McKaig Brick Company $15,000 per year for 12…

A: Annual net cash flows is calculated as the difference between the annual cash flows and cash…

Q: A new machine costing $100,000 is expected to save the MchKaig Brick Company $15,000 per year for 12…

A: Net cash flow from the project means the amount of profit after taxes plus depreciation as…

Q: Alter company's manager has proposed installing an equipment that will cost $36,000,have a 8-year…

A: The average rate of return calculates the rate of return compared to the initial investment costs.…

Q: Diamond Company is considering purchasing a machine that would cost $756,000 and have a useful life…

A: Payback period: Payback period is the length of time in which an investment reaches its break-even…

Q: A new machine costing $100,000 is expected to save the McKaig Brick Company $15,000 per year for 12…

A: MACRS is a depreciation method which has highest depreciation in the early years of asset’s life. An…

Q: PJP, an industrial manufacturer, is considering a new capital investment project to make and produce…

A: Given in this question we are required to calculate the NPV and the maximum amount of PJP.

Q: Jasper Metals is considering installing a new molding machine which is expected to produce operating…

A: Formulas:

Q: Majestic Aircraft Corporation is considering purchasing composite wing fixtures for the assembly of…

A: Net annual cash flow = Revenue per year - annual operating cost

Q: Alter company's manager has proposed installing an equipment that will cost $36,000, have a B-year…

A: With the initial investment of $36000, there are annual cash inflows of $ 8000 each in addition to…

Q: Nashville Inc is contemplating the purchase of a machine capable of performing someoperations that…

A: Annual cash flows from a project need not be in cash form, as it is said 'a dollar saved is a dollar…

Q: considering its replacement. This centrifuge has a current market value of $30,000 and can be used…

A: in this we have to calculate present value of both options.

Q: The management of Charlton Corporation is considering the purchase of a new machine costing…

A: IRR is a rate at which NPV of the project is equal to 0 or it’s a rate at which cash inflows are…

Q: ST Manufacturing Ltd is evaluating an investment of a machine that cost $200,000. With the new…

A: The internal rate of return is a metric used in financial analysis to estimate the profitability of…

Q: cost of the assembly system is $3 million with life expectancy of 10 years, annual operating cost of…

A: NPV= Present value of cashinflows - Present value of cashoutflows. If results are positive then it…

Q: Magsaysay Company is evaluating an investment that would have an eight-year life and would require a…

A:

Q: Clapton Corporation is considering an investment in new equipment costing $750,000. The equipment…

A: Accounting Rate-of-Return (ARR) is used to measure profitability of investment proposals ignoring…

Q: Consider the following financial information about a retooling project at a computer manufacturing…

A: Computation of the CF after tax and annual Equivalent Cost for this Project is shown:

Q: Alter company's manager has proposed installing equipment that will cost $36,000 have an 8 years…

A: Average annual profit = Total profit / total no. of years = $16000/4 years = $4000 Average…

Q: As a financial analyst, you must evaluate a proposed project to produce printer cartridges. The…

A: "Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: um, Inc. is considering the purchase of new mining equipment. The equipment will cost $1,500,000 and…

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

Q: Hayden Company is considering the acquisition of a machine that costs $389,000. The machine is…

A: Given: Initial investment = $ 389,000 Net cash flow per annum = $ 86,000 Operating income = $ 73,100…

Q: Majestic Aircraft Corporation is considering purchasing composite wing fixtures for the assembly of…

A: Net annual cash flow can be defined as the per year cash inflows as deducted by the per year cash…

Q: Dwight Donovan, the president of Donovan Enterprises, is considering two investment opportunities.…

A: A. GIVEN, r=8% year project A project B 0 -400000 -160000.00 1 126000 52800.00 2 126000…

Q: Alter company's manager has proposed installing an equipment that will cost $36,000, have a 8-year…

A: The average rate of return is a capital budgeting method that is determined by dividing the average…

Q: As entrepreneur is considering raising a bank loan to buy a firm year life span machine costing two…

A: The capital budgeting technique of the company provides analysis in terms of long term projects. It…

Q: Cadillac Company is evaluating an investment that would have an eight-year life and would require a…

A: The payback period is the time it takes an investor to repay the cost of an investment, or to reach…

Q: As a financial analyst, you must evaluate a proposed project to produce printer cartridges. The…

A: Answer of the cash flow is $73000  In worst case scenario the sales will dip to 3200 sales= 3200*50…

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: Kerfuffle Corporation is considering the purchase of a new computer system. The cost for the new…

A: Given:

Q: The management of Fine Electronics Company is considering to purchase an equipment to be attached…

A: Given: Cost of equipment = 6,000 Cash inflows = 2,200 Return = 20%

Q: Pat Inc, is considering a project that would have a ten-year life and would require a $1,000,000…

A: Rate of return on the project means how much operating income has been earned on investing some…

Q: Majestic Aircraft Corporation is considering purchasing composite wing fixtures for the assembly of…

A: Standard Disclaimers“Since you have asked multiple question, we will solve the first question for…

Q: Schultz company is considering purchasing a machine that would cost $478,800 and have a useful life…

A: Return on average investment is a measure that is used to determine the profitability of an…

Q: The firm’s is considering an investment in some additional equipment. The equipment has a net cost…

A:

Q: Rambus Inc. would like to purchase a production machine for $325,000. The machine is expected to…

A: Total Net savings = (annual savings - Annual maintenance cost) x no. of years = (112500-12500)*3…

Q: Diamond Company is considering purchasing a machine that would cost $756,000 and have a useful life…

A: Capital Budgeting: Capital budgeting decisions are the most important decision in corporate…

Q: Concose Park Department is considering a new capital investment. The cost of the machine is…

A: Calculate net present value.

Q: Michael Company is considering the purchase of a new computer equipment to  improve its production…

A: Given, The cost of equipment is $300,000 After-tax cashflows $96,500 Required rate of return is 10%

Q: The management of Cooky Electronics Company is considering purchasing equipment to be attached to…

A: NPV = PV of inflows - initial investment PV of inflows is calculated by PV function in excel, where…

Q: XYZ Company is looking to invest in some new machinery to replace its current malfunctioning one.…

A: Annual Depreciation (straight line method) = (Cost of the assets - Residual value) / Expected life…

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.