Consider a new machine at a bottling plant that has a first cost of $250000, operating and maintenancecosts of $15600 per year, and an estimated net salvage value of $23000 at the end of 30 years. Assume aninterest rate of 7%. What is the annual equivalent cost of the investment if the planning horizon is 30 years?S

Answered: Consider a new machine at a bottling…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 27P

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Consider a new machine at a bottling plant that has a first cost of $150000, operating and maintenance costs of $18900 per year, and an estimated net salvage value of $16000 at the end of 30 years. Assume an interest rate of 5%. What is the annual equivalent cost of the investment if the planning horizon is 30 years?
Consider a new machine at a packaging plant that has a first cost of $100000, operating and maintenance costs of $16100 per year, and an estimated net salvage value of $30000 at the end of 30 years. Assume an interest rate of 6%. What is the annual equivalent cost of the investment if the planning horizon is 30 years? %24
Consider a palletizer at a bottling plant that has a first cost of $150,000, has 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%/year. What is the future equivalent cost of the investment if the planning horizon is 30 years? a. $3,371,000 b. $3,467,000 c. $3,623,000 d. $3,980,000.
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 wish to evaluate a project requiring a $60,100 initial investment and having a useful life of seven years. What minimum annual cash inflow do you need if the cost of capital is 8.2%? If the project earns $12,900 per year, what is its IRR? Is the project acceptable? The minimum annual cash inflow necessary is $ (Round to the nearest cent.)
An investment that costs $20,000 will produce annual cash flow's of $5000 for a period of six years further, the investment has an expected salvage value of $3000. Given a desired rate of return of 12%, what will the investment generate

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