A delivery truck has a book value of $8,000 in year 5. The purchase price of the truck is $40,000. If the minimum acceptable rate of return is 20%, what is the equivalent annual capital cost of the truck in year 9?
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A delivery truck has a book value of $8,000 in year 5. The purchase price of the truck is $40,000. If the minimum acceptable
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- A grocery store is considering the purchase of a new refrigeration unit with an Initial Investment of $412,000, and the store expects a return of $100,000 in year one, $72000 in years two and three, $65,000 in years four and five, and $38,000 in year six and beyond, what is the payback period?Gardner Denver Company is considering the purchase of a new piece of factory equipment that will cost $420,000 and will generate $95,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further Instructions on internal rate of return in Excel, see Appendix C.Caduceus Company is considering the purchase of a new piece of factory equipment that will cost $565,000 and will generate $135,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return In Excel, see Appendix C.
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- In an investment project, the initial cost of investment is $400,000. The annual revenues are expected to be S 195,000 over the 6-years life of the machine, and the annual expenses will be $100,000. The market value of the machine after 6 years is $50,000. (Note that, the project is already accepted with a MARR =10%) a) What is the simple payback period of the investment? b) What is the internal rate of return of the investment?A new machine for your company has a first cost of $80,000 and an estimated net salvage value of $15,000 at the end of 20 years. It is expected to have operating and maintenance costs of $3,000 per year, and it is expected to reduce costs by $5,000 per year. Assume an interest rate of 8%. What is the annual equivalent cost of the investment if the planning horizon is 20 years?You are evaluating an investment project costing $42,000 initially. The project will provide $3,000 in after - tax cash flows in the first year, and $7,000 each year thereafter for 10 years. The maximum payback period for your company is 6 years. What is the payback period for this project?