fully-automated Girl Scouts of America is introducing a new type of cookie that will be baked using cookie-making machinery that has a working life of 7 years. The new cookie-making machinery costs $20,787 to purchase. Installation costs will be $3,856. They will also reconfigure their existing factory at a cost of $3,475, and when they do, they All TL DEL
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- Bobwhite Laundromat is trying to enhance the services it provides to customers, mostly college students. It is looking into the purchase of new high-efficiency washing machines that will allow for the laundry's status to be checked via smartphone. Bobwhite estimates the cost of the new equipment at $191,000. The equipment has a useful life of 9 years. Bobwhite expects cash fixed costs of $77,000 per year to operate the new machines, as well as cash variable costs in the amount of 5% of revenues. Bobwhite evaluates investments using a cost of capital of 10%. Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Read the requirements. Requirement 1. Calculate the payback period and the discounted payback period for this investment, assuming Bobwhite expects to generate $150,000 in incremental revenues every year from the new machines. (Round your answer to two decimal places.) The payback period in years, for the…The Tuff Wheels was getting ready to start its development project for a new product to be added to its small motorized vehicle line for children. The new product is called the Kiddy Dozer. It will look like a miniature bulldozer, complete with caterpillar tracks and a blade. Tuff Wheels has forecasted the demand and the cost to develop and produce the new Kiddy Dozer. The following table contains the relevant information for this project. Development cost $ 900,000 Estimated development time 9 months Pilot testing $ 200,000 Ramp-up cost $ 400,000 Marketing and support cost $ 150,000 per year Sales and production volume 60,000 per year Unit production cost $ 100 Unit price $ 170 Interest rate 8 % Tuff Wheels also has provided the project plan shown as follows. As can be seen in the project plan, the company thinks that the product life will be three years until a new product must be created. Assume all cash flows occur at the end of each period. a. What…Sage Laundromat is trying to enhance the services it provides to customers, mostly college students. It is looking into the purchase of new highefficiency washing machines that will allow for the laundry’s status to be checked via smartphone. Sage estimates the cost of the new equipment at $159,000. The equipment has a useful life of 9 years. Sage expects cash fixed costs of $80,000 per year to operate the new machines, as well as cash variable costs in the amount of 5% of revenues. Sage evaluates investments using a cost of capital of 10%. Q. Calculate the payback period and the discounted payback period for this investment, assuming Sage expects to generate $140,000 in incremental revenues every year from the new machines.
- The Tuff Wheels was getting ready to start its development project for a new product to be added to their small motorized vehicle line for children. The new product is called the Kiddy Dozer. It will look like a miniature bulldozer, complete with caterpillar tracks and a blade. Tuff Wheels has forecasted the demand and the cost to develop and produce the new Kiddy Dozer. The table below contains the relevant information for this project. Development cost $ 1,450,000 Estimated development time 9 months Pilot testing $ 200,000 Ramp-up cost $ 400,000 Marketing and support cost $ 150,000 per year Sales and production volume 60,000 per year Unit production cost $ 100 Unit price $ 225 Interest rate 8 % Tuff Wheels also has provided the project plan shown below. As can be seen in the project plan, the company thinks that the product life will be three years until a new product must be created. Assume all cash flows occur at the end…Wendell's Donut Shoppe is investigating the purchase of an $42,800 donut-making machine with a six-year useful life. The new machine would reduce labor costs by $5,700 per year. In addition, it would allow the company to produce one new style of donut, resulting in the sale of 2,500 dozen more donuts each year. The company realizes a contribution margin of $1.50 per dozen donuts sold. Click here to view Exhibit 148-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using tables. Required: 1. What are the new machine's total annual cash inflows? 2. What discount factor should be used to compute the new machine's internal rate of return? Note: Round your answer to 3 decimal places. 3. What is the new machine's internal rate of return? Note: Round your final answer to the nearest whole percentage. 4. In addition to the data given previously, assume the machine will have a $16,280 salvage value at the end of six years. Under these conditions, what is the internal rate of…The Cookie Company is considering adding a new automated baking machine to its production floor. The machine's base price is $1,720,000, and it would cost another $80,000 to install it. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $800,000. The MACRS rates for the first three years are 0.3333, 0.4445, and 0.1481. The machine would require an increase in net working capital (inventory) of $75,500. The machine would not change revenues, but it is expected to save the firm $420,000 per year in before - tax operating costs, mainly labor. Their marginal tax rate is 27%. What is the Year-0 cash flow? What are the cash flows in Years 1, 2, and 3? What is the additional Year-3 cash flow (i.e., the after-tax salvage and the return of working capital)? If the project's cost of capital is 10%, what is the NPV? Should you pursue this project? Do in excel please
- Leaf's Paper Company is planning to launch a new notebook product that is water resistant. The company wants to sell 30,000,000 of the new notebooks next year and wants to know what trial rate is required to achieve this goal. The market research group forecasts an awareness rate of 73% and an AČV% of 52%. Of those that try the product by purchasing 1 notebook, 24% will repurchase 5 notebooks per year. There are 180,000,000 notebook consumers in the target market. Total fixed costs to Leaf Paper Company to manufacture this new notebook are $10,000,000, with variable costs of $2.73 per notebook. What trial rate is required to achieve the company's goal?The Sweetwater Candy Company would like to buy a new machine that would automatically dip chocolates. The dipping operation is currently done largely by hand. The machine the company is considering costs $120,000. The manufacturer estimates that the machine would be usable for 12 years, but would require the replacement of several key parts at the end of the sixth year. These parts would cost $7,800, including installation. After 12 years, the machine could be sold for about $6,000. The company estimates that the cost to operate the machine will be only $9,000 per year. The present method of dipping chocolates costs $38,000 per year. In addition to reducing costs, the new machine will increase production by 2.000 boxes of chocolates per year. The company realizes a contribution margin of $1.00 per box. A 20 % rate of return is required on all investments. Click here to view Exhibit 10-1 and Exhibit 10.2. to determine the appropriate discount factor(s) using tables. Required: 1. What…Judy has just completed the development of a better face shield for health workers. The new product isexpected to produce annual revenues of $150,000. Judy requires an investment in an advanced 3D Printercosting $9000.34 The project has an expected life of 5 years based upon the development and disseminationof a vaccine for coronavirus. The 3D printer will have $3000 salvage value as the market for 3D printers will beflooded as demand plummets for face shields. In order to produce the face shields Judy must maintain a largeinventory of plastic pellets. Therefore, working capital is expected to increase by $14,999.00 However, Judywill only recover $1278 of working capital at the end of the products life cycle. Annual operating expenses areestimated at $145,000. The required rate of return is 6%.• Calculate the Net Present Value• Prepare a schedule of projected annual cash flows
- A university student painter is considering the purchase of a new air compressor and paint gun to replace an old paint sprayer. (Both items belong to Class 9 and have a 25% CCA rate.) These two new items cost $13,300 and have a useful life of four years, at which time they can be sold for $2,900. The old paint sprayer can be sold now for $630 and could be scrapped for $380 in four years. The entrepreneurial student believes that operating revenues will increase annually by $9,300. The tax rate is 22% and the required rate of return is 15%. What is the NPV of the new equipment? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) NPV 2$ Should the purchase be made? O Yes O NoRealforce is considering making a new mechanical keyboard. The company has spent $200,000 in research for a silent mechanical switch, which they can use on the new keyboard. Realforce estimates that they can sell $5,000 units of the new keyboard per year at $250 per unit for the next 4 years. The production cost per keyboard is $200. The fixed costs for the project will run $50,000 per year. To start the production, Realforce has to invest a total of $400,000 in manufacturing equipment, The equipment will be 100 percent depreciated over a straight line basis for the next 4 years and become valueless at the end of the project. The tax rate is 35 percent and the discount rate is 15 percent. a) What is the operating cash flow for this project? b) What is the project's NPV? c) Suppose that the manu facturing equipment will have a market value of $18,000 at the end of the project and the project requires an initial investment in net working capital of $10,000, which is fully recoverable at…The Sweetwater Candy Company would like to buy a new machine that would automatically “dip” chocolates. The dipping operation is currently done largely by hand. The machine the company is consideringcosts $120,000. The manufacturer estimates that the machine would be usable for 12 years but wouldrequire the replacement of several key parts at the end of the sixth year. These parts would cost $9,000, including installation. After 12 years, the machine could be sold for $7,500.The company estimates that the cost to operate the machine will be $7,000 per year. The presentmethod of dipping chocolates costs $30,000 per year. In addition to reducing costs, the new machine willincrease production by 6,000 boxes of chocolates per year. The company realizes a contribution margin of$1.50 per box. A 20% rate of return is required on all investments.Required:(Ignore income taxes.)1. What are the annual net cash inflows that will be provided by the new dipping machine?2. Compute the new machine’s…