You are considering two types of machines fora manufacturing process.◼◼ Machine A has a first cost of $75,200, and itssalvage value at the end of six years of estimatedservice life is $21,000. The operating costs ofthis machine are estimated to be $6,800 per year.Extra income taxes are estimated at $2,400 peryear.◼◼ Machine B has a first cost of $44,000, and itssalvage value at the end of six years’ service isestimated to be negligible. The annual operatingcosts will be $11,500.Compare these two mutually exclusive alternativesby the present-worth method at i = 13%

Q: A company with $630,000 in operating assets is considering the purchase of a machine that costs…

A: If cash flows are uneven,then  Payback period(PBP)=Years before full recovery+ (uncovered cost at…

Q: A company is planning to purchase a machine that will cost $42,000 with a six-year life and no…

A: Introduction Payback Period The acceptability of a project is determined by a variety of factors,…

Q: If a trenching machine has an estimated life span of 7500 hours and a yearly operating cost of…

A: Hourly cost can be calculated using the formula given below. Hourly cost = Total cost in One year /…

Q: A company produces 118,473 units of product A annually, which sold at an average price of $31.27 per…

A: The differential profit is the excess of extra revenue over the extra cost due to the new equipment.…

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

A: Present Worth Present value is the present worth of any sum of money to be received in the future at…

Q: The maintenance of a machine in a manufacturing plant currently costs a company $9,000 every year…

A: Cash Flow Comparison with existing and new machine: Year Existing Cash Flows Proposed Cash Flows…

Q: A machine, costing $30,000 to buy and $2.500 per year to operate, will savemainly labor expenses in…

A: Minimum required annual savings are the savings at a point where NPV is zero. This implies the point…

Q: his own enterprise

A: Rate of Return on additional investment approach is applicable only for those alternative wherein a…

Q: A metal mill will buy one of two machines. The price of the machine C is 25000 TL, the annual…

A: Calculating PV of cost of both machine  Choose machine with lower cost

Q: Five years ago, Thomas Martin installed production machinery that had a first cost of $25,000. At…

A: Replacement decisions are those decisions that are to be taken for replacing the current project…

Q: Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a…

A: In the companies that are involved with the manufacture of goods, machinery is an important asset…

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: Clean-U, Inc., expects to receive $65,000 each year of its newest soap, ÔnGuard. There will be an…

A: In this we have to determine the after tax cash flow and from that we can get NPV.

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

A: MARR = 20% Cash Flows: Year Cash Flow 1 -25000.00 2 8000.00 3 8000.00 4 8000.00 5…

Q: below: The initial cost is $500,000. The tire cost is $20,000, and the estimate tire life is 4,000…

A: This is the expense of repairing and maintaining construction equipment that has been subjected to…

Q: Repairs for this machine will average 25,000 per year and operating expenses will be 30,000. if…

A: Equipment cost = P500000 Scrap value = P50000 Repair per year = P30000 Operating expenses includes…

Q: Marigold Inc. is planning to invest in new manufacturing equipment to make a new garden tool. The…

A: Answer- Working Note :   Cost to Manufacture = DL + DM + VFOH  = 8.80+ 28.90+ 4.50  = $ 42.20

Q: Natural Foods Inc. is planning to invest in new manufacturing equipment to make a new garden tool.…

A: Net cash flows indicate the forecast of cash inflows and outflows for a particular period.

Q: An equipment costing $57,500 is being considered for a production process at Dew Chemicals. The…

A: Calculation of rate of return from equipment Rate of return from equipment = (Total amount of…

Q: Advantech, Inc is considering to start selling a new product. The company spent $200,000 to develop…

A: Net Present Value (NPV) is the sum of the present value of all future cash flows  over the entire…

Q: You are considering a manufacturing equipment that has a cost of $100,000. The equipment is expected…

A: Equivalent Savings per hour refers to amount of saving adjusted with time value factor is saved by…

Q: A machine costing P 95,000 is expected to produce 10,000 units of a certain products during its…

A: Depreciation on Fixed assets :      Depreciation expense is considered as the charge against the…

Q: EXCEL, an equipment costing $100,000 has a useful life of 6 years. It has a resale value of $8,000.…

A: given information equipment costing = $100,000 useful life= 6 years resale value = 8000 annual cost…

Q: A factory asset has a first cost of $100,000, annual costs of $15,000 the first year and increasing…

A: Given,  Initial cost =$100,000 Annual Costs = $15,000 increasing by 7.5%

Q: Compute the unknown annual revenues to reach equilibrium on the cash flow series over the service…

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: Higgins Machine Tools, Inc. is currently manufacturing one of its products on a hydraulic stamping…

A: a) Computation of revenue for the old machine per year: Cash flows of old machine:

Q: ABC company has just purchased a life truck that has a useful life of 5 years. The engineer…

A: Present value is the current value of future cash flows.

Q: A company is considering the purchase of a new machine for $87,000. Management predicts that the…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: and what will be the cost per unit.

A: The amount being incurred in the business for operating the business and charging from customer is…

Q: A supplier that sells laboratory supplies anticipates an increase in profit of 43,000 TL per year…

A: Net present value is the present value of net benefits less present value of cost. If the net…

Q: A company is considering the purchase of a new machine for $54,000. Management predicts that the…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: you buy the new machine? Use Annual Worth method

A:

Q: The equivalent annual worth of the process currently used in manufacturing motion controllers is AW…

A: For evaluating the alternatives for the selection of one alternative, we can use the net present…

Q: Martin Enterprises needs someone to supply it with 110,000 cartons of machine screws per year to…

A: Fixed Cost is $335,000 Salvage Value is $93,000 Variable Cost is $9.65 Units is 110,000 Machine Cost…

Q: A packing equipment that cost P 500,000 will last for 20 years and have a scrap value at that time…

A: Equipment cost = P500000 Scrap value = P50000 Repair per year = P30000 Operating expenses includes…

Q: Alson Enterprises needs someone to supply it with 185,000 cartons of machine screw per year to…

A: Under the straight-line method, the depreciation is computed by dividing the initial cost by the…

Q: You are given the following financial data about an assembly machine to be implemented at a company:…

A: Given Information: Investment at Year 0 :$22000 Investment at Year 1 : $18,500 Revenues for 15 years…

Q: A manufacturing plant manager has purchased a new bologna slicing machine for $24,500. The new…

A: Present value of annuity is the current value of the future payments that are calculated using the…

Q: Two alternatives are being considered for recovering aluminum from garbage. Alternative 1 has a…

A: Introduction: Present worth analysis Present worth analysis can be defined as a analysis which…

Q: Eden Publishing Company Limited is planning to purchase a printing machine for $9,660,000. The…

A: The expenses incurred to maintain the efficiency of the machinery are known as maintenance expenses.…

Q: A machine costing $150 000 has a useful life of eight years, after which time its estimated resale…

A: Answer  Cost = $150,000  Useful life  = 8 year  Discounting rate = 20% PVAIF @20% for 8 year = 3.838

Q: nufacture a product and sell it for $3.00 per unit. Equipment to manufacture the product will cost…

A: The cost is Cost = $200,000 + ($0.25)(no. of units) + ($0.85)(no. of units) + ($0.25)((no. of units)…

Q: After spending a year and ​$50,000​, you finally have the design of your new product ready. In order…

A: Given: Raw material = $30,000 Market value of used machine = $100,000 Tax rate = 25%

Q: A man is considering putting up his own enterprise, where an investment of 800,000Php will be…

A: Solution Given Materials 160,000Php/ yearLabor     280,000Php/ yearOverhead (40,000 + 10% of sales)…

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

A: The present value of the cash flows means the discounted values of cash flows as if they happen to…

Q: To make an item inhouse, equipment costing $250,000 must be purchased. It will have a life of 4…

A: Cost of equipments=$250000n=4 yearsAnnual cost=$80000Cost per unit to manufacture=$40Cost for buying…

Q: Ashley Foods, Inc. has determined that only one of five machines can be used in one phase of its…

A: For deciding the best machine we will discount cash outflow using required rate of return which is…

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.