A machine can be purchased at t=0 for $20,000. The estimated life is 15 years, with an estimated salvage value of zero at that time. The average annual operating and maintenance expenses are expected to be $5,500. If MARR =2.54%, what must the average annual revenues be in order to be indifferent between purchasing the machine and doing nothing? $7,120 $3,880 $6,969 $7,213 $7,175
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- You are given opportunity to purchase product for $42, 000. The product will have annual operating expenses of $4,000, and a salvage value of $20,000 at the end of its useful life of 6 years. Assuming a discount rate of 9.0%, what is the minimum acceptable revenue to justify taking this project? A 1.01% B $333 C $2704 D $767 E $10704Consider a machine that costs $1000 to purchase. The machine creates an annual operating expense of $500 at the end of first year, which is going to increase by $50 in each year thereafter. The salvage value of this machine is $200, independent of the usage period. Find the economic life of this machine under nominal MARR 25%, compounding annually. A 8. B. 6.A machine gives annual benefits of 1000$ and have no salvage value with annual maintenance of 750$, if the rate of interest is 9% and number of years are 6 then what will be the present worth? Select one: a. 1209$ b. 1122$ c. 1193$
- 1. Use the information below for the next two questions. Leaky Pipe Inc. is considering a new machine for its largest product line. The cash flows Lastalled Purchase Price S40, 000 Roduced Cost of Materials S 6,000 per year Labor Savings S9, 000 per year locrease in Working Capital $5, 000 (for Year 0 and I only) Depreciable Life (zero salvage value) 4 years Economic Life 8 years Required Return 12% Tax Rate 40% a . What is the NPV of this machine if it does not replace any other?. b. Suppose the machine replaces another machine with the following characteristics: Book Value of Old Machine $6.000 Market Value of Old Machine $4,000 Remaining Depreciable Life of Old Machine 6years Assume the old machine was not expected to have any salvage value and compute the NPV of the New Machine.A new machine is expected to save $33,400 annually in labor and energy expenses. How much can be justified for the purchase of this equipment now if the company's interest rate is 15% and the machine's useful life is 6 years? O a. $86,638 O b. $292,375 O c. $200,400 O d. $139,042 O e. $126,402Machine X has an intial cost of $10,000. It is expected to last 12 years, to cost $200 per year to maintain and to have a salvage value of $1,000 at the end of its useful life. The equivalent uniform annual cost of the machine at 8% interest is most nearly ___________. A. $1,160 B. $1,507 C. $1,580 D. $1,475 E. None of the above
- what is the solution for this problem (please not on excel file) the answer should be 241,975.3826 I have purchased a machine worth P1,599,270.00. And it needs maintenance at the end of every 6 months starting 5 years after its purchased date and maintenance will be needed for the next 10 years of its useful life. The maintenance cost is equivalent to the 2% of the total machine cost. How much money should be prepare today to finance the requirement if the interest rate is 0.10 compounded quarterly?A pipeline contractor can purchase a needed truck for $44,000. Its estimated life is 6 years, and it has no salvage value. Maintenance is estimated to be $2,100 per year. Operating expense is $60 per day. The contractor can hire a similar unit for $130 per day. MARR is 7%. Click here to access the TVM Factor Table Calculator Part a K Part b If the truck is needed for 180 days/year, should the contrac buy the truck or hire the similar unit? Determine the dollar amount of annual savings generated by using the preferred alternative rather than the nonpreferred. Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±5. Save for Later Attempts: 0 of 3 used Submit Answer1. A remotely situated fuel cell has an installed cost of BD2,000 and will reduce the existing expense by BD350 per year for eight years. The company's MARR is 10% per year. a) What is the minimum salvage value after eight years that makes the fuel cell worth purchasing? b) What is the fuel cell's IRR if the salvage value is negligible?
- A machine costs $600,000 and is expected to yield an after-tax net income of $23,000 each year. Management predicts this machine has a 12-year service life and a $120,000 salvage value, and it uses straight-line depreciation. Compute this machine's accounting rate of return. Choose Numerator: 1 7 Accounting Rate of Return Choose Denominator:A company buys a machine for $180,000 that has an expected life of nine years and no salvage value. The company expects an annual net income (after taxes of 30%) of $8,550. What is the accounting rate of return? a. 4.75% c. 2.85% e. 6.65% b. 42.75% d. 9.50%It is being decided whether the company is buying a delivery truck worth 25000 USD, which can be rented out to other warehouses in your area. For a useful life of 15 yrs, it is projected that you can earn as much as 3100 USD. At the end of its useful life, the salvage value is zero. Disregarding taxes, the ROR is projected to be approximately equal to: 7.1% 6.5% 5.3% 4.2% Other: