Your firm has purchased an injection molding machine at a cost of $100,000. The machine's useful life is estimated at 8 years. Your accounting department has estimated the capital cost for this machine at about $25,455 per year. If your firm's minimum acceptable rate of return is 20%, how much salvage value did the accounting department assume at the end of 8 years? Use Capital Recovery method.
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- At 6% interest rate, find the capitalized cost of a building whose cost is ₱250,000,000with a life of 20 years. The building must be partially rebuilt at a cost of ₱130,000,000 atthe end of each 20 years.Charlie has a project for which he had determined a present worth of $56,620. He now has to calculate the IRR for the project, but unfortunately he has lost complete information about the cash flows. He knows only that the project has a five-year service life and a first cost of $190,000, that a set of equal cash flows occurred at the end of each year, and that the MARR used was 10 percent. What is the IRR for this project?Your firm has purchased an injection molding machine at a cost of $100,000. The machine's useful life is estimated to be eight years. Your accounting department has estimated the capital cost for this machine at about $25,455 per year. To expect a 15% return on your investment, how much additional annual revenue (after deducting any operating expenses) must be generated
- A manufacturing company is considering investing in a new machine that costs $12,000. The machine has an expected life of 5 years and a salvage value of $6,000. The estimated annual revenue generated by the machine is $10,000, and the annual operating costs are $3,000. What is the future worth (FW) of the investment at an MARR of 20%? CHOICES: $29,300.00 $36,500.00 $46,200.00 $58,300.00You invest in a piece of equipment costing $40,000. The equipment will be used for two years, and it will be worth $15,000 at the end of two years. The machine will be used for 4,000 hours during the first year and 6,000 hours during the second year. The expected savings associated with the use of the piece of equipment will be $28,000 during the first year and $40,000 during the second year. Your interest rate is 10%.(a) What does capital recovery cost?(b) What is the annual equivalent worth?(c) What is the net savings generated per machine-hour?Consider a palletizer at a bottling plant that has a first cost of $150,000, operating and maintenance costs of $17,500 per year, and an estimated net salvage value of $25,000 at the end of 30 years. Assume an interest rate of 8%. What is the annual equivalent cost of the investment if the planning horizon is 30 years? a. $29,760 b. $30,600 c. $31,980 d. $35,130.
- A computerized wood lathe, costing P25,000, will be used to make ornamental parts for sale. Receipts are estimated at P60,000 per year with costs running P55,000 per year. The salvage value is P9,000 at the end of 10 years. If the MARR is 12%, what is the present worth of this investment? a) P 7,877.89 b) P 6,148.87 c) P 50,353.36 d) P 56,148.87Steve Company is considering replacing one of its machines. The available new model has a cost of $220,000, a 16-year life, and an AOC of $2,000. The machine must also be serviced every 4 years at a cost of $10,000. The machine can be salvaged at $45, 000. The MARR is 12% How much annual net income must be realized from the machine to recover the capital investment?You are considering a hydraulic excavator. This machine will have an estimated service life of 10 years, with a salvage value of 10% of the investment cost. Its expected savings from annual operating and maintenance costs are estimated to be SR 60,000. To expect a 14% rate of return on investment, what would be the maximum amount that you are willing to pay for the machine: (Choose the closest answer) Hint: solve for the capital cost (I) by equating recovery cost (CR) with operating and maintenance cost (OC). a) SR 297,594 b) SR 355,104 c) SR 250,417 d) SR 321,643 e) SR 356,218
- Covington Corporation purchased a vibratoryfinishing machine for $20,000 in year 0. The usefullife of the machine is 10 years, at the end of whichthe machine is estimated to have a salvage value ofzero. The machine generates net annual revenuesof $6,000. The annual operating and maintenanceexpenses are estimated to be $1,000. If Covington’sMARR is 15%, how many years will it take beforethis machine becomes profitable?Ten years ago, Johnson Recovery purchased a wrecker for $330, 000 to move disabled 18-wheelers. He received a salvage value of $25, 000 after 10 years of use. During this 10-year period, his average annual revenue totaled $60, 000. a) Did he recover his investment at 12% per year return? In other words, does the Annual Equivalent Value of the benefits exceed the Capital Recovery cost at an interest rate of 12%? b) Suppose Johnson moves, on average, 250 disabled 18-wheelers each year. What is his average equivalent benefit/cost per vehicle moved? c) Now, incorporate annual operating and maintenance costs into your analysis. If the annual O&M cost was $5, 000 the first year and increased by a constant 10% per year, what is the annual equivalent worth at 12% per year?Use the following cash flows to find the NPW, IRR, PI, and PBPYou are looking at a new project and you have estimated the followingcash flows:◦ Year 0: CF = -165,000◦ Year 1: CF = 63,120;◦ Year 2: CF = 70,800;◦ Year 3: CF = 91,080;Your required return for assets of this risk is 12%