Problem 8-32 Equivalent Annual Cost (LO4)A precision lathe costs $10,300 and will cost $21,500 a year to operate and maintain. If the discount rate is 12% and the lathe will lastfor 6 years, what is the equivalent annual cost of the tool? (Enter your answer as positive value. Round your answer to the nearestcent.)The equivalent annual cost $

Name: Problem 8-32 Equivalent Annual Cost (LO4)A precision lathe costs $10,
Uploaded: 2022-11-18T16:48:51.000Z
Channel: Bartleby
Description: Problem 8-32 Equivalent Annual Cost (LO4)A precision lathe costs $10,300 and will cost $21,500 a year to operate and maintain. If the discount rate is 12% and the lathe will lastfor 6 years, what is the equivalent annual cost of the tool? (Enter you

Equivalent annual cost (EAC) means the same amount of cashflow incurred each year. It is computed by…

Answered: Problem 8-32 Equivalent Annual Cost…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

Quiz VII Saved 1 A precision lathe costs $11,600 and will cost $28,000 a year to operate and maintain, If the discount rate is 10% and the lathe will last for 4 years. What is the equivalent annual cost of the tool (Enter your answer os positive value. Round your enswer to the neerest cent.) The equivalent antnial cost s 00::02
Problem 8-32 Equivalent Annual Cost (LO4) A precision lathe costs $10,000 and will cost $20,000 a year to operate and maintain. If the discount rate is 12% and the lathe will last for 5 years, what is the equivalent annual cost of the tool?
Question 5 An investment of $50,000 is made to purchase machinery that will allow us to manufacture a new product. The annual expenses to make the product are (5,000 + 5x) and the revenues from the product are 30 x, where x = the number of products sold each year. How many products must be sold per year, x, to break even? Consider a 7 year project life and an MARR of 12%.
Question 23 Jubail Corporation has just purchased a new CAD Machine for $35,000 to replace old machine that had a salvage value of $ 15,000. The useful life of the new machine is 10 years. The machine is 12%: generates annual sales of $10,000 and has annual maintenance cost of $5,000. Calculate the payback period using Conventional Payback period, If Jubail's MARR (minimum acceptable rate of return) O A. 8.12 Years O B. 4.00 Years O C. 6.57 Years ve Answer O D. None of these
6 A new machine costs $X. It will be used for Y years then sold for $Z. If interest is A%, what net yearly savings are needed to justify its cost? X= Y= Z= A= $45,000 25 years $25,000 8% Try Again
Question 4: You have a opportunity to make a investment that has $10.000,000 landing, 1.500.000 machine, outsourcing 500.000 and finance cost 1.000.000. Machines have no scrap value at end of 4th year. You will pay interest payment at the end of 4rd year, that is $500.000. If you make this investment now, you will receive $4.500,000 one year from today, $3.000,000, $5.000,000 and $ 4.000,000 respectively. The appropriate discount rate for this investment is 14 percent. Tax rate is % 30. Should you make the investment? Why?
Required information Problem 14.056 The two machines shown are being considered for a chip manufacturing operation. Assume the MARR is a real return of 14% per year and that the inflation rate is 6.7% per year. A B Machine First Cost, $ -146,000 -820,000 -5,000 -70,000 M&O, $ per year Salvage Value, $ 40,000 200,000 Life, years 5 00 Problem 14.056.a: Compare two alternatives based on their AW values without inflation consideration Which machine should be selected on the basis of an annual worth analysis if the estimates are in constant-value dollars? What is the annual worth of the selected alternative? Select machine (Click to select]: wwwwwwwwwwww wwwwww... The annual worth of the alternative is $
i 4 ances Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $47,000 and a remaining useful life of five years. It can be sold now for $57,000. Variable manufacturing costs are $50,000 per year for this old machine. Information on two alternative replacement machines follows. The expected useful life of each replacement machine is five years. Purchase price Variable manufacturing costs per year (a) Compute the income increase or decrease from replacing the old machine with Machine A (b) Compute the income increase or decrease from replacing the old machine with Machine B. (c) Should Lopez keep or replace its old machine? (d) if the machine should be replaced, which new machine should Lopez purchase? Req A Complete this question by entering your answers in the tabs below. Revenues Machine A: Keep or Replace Analysis Req B Compute the income increase or decrease from replacing the old machine with Machine A. (Amounts to be…
Problem 04.040 Equivalence When PP>=CP Metalfab Pump and Filter Inc. estimates that the cost of steel bodies for pressure valves will increase by $2 every 3 months. If the cost for the first quarter is expected to be $80, what is the present worth of the costs for a 3-year time period at an interest rate of 1.5% per quarter? The present worth is $ (5o
4 ts -kipped eBook Hint Print References Mc Graw Hill earch F1 A project has the following estimated data: Price = $72 per unit; variable costs = $46 per unit; fixed costs $21,000; required return = 15 percent; initial investment = $42,000; life = six years. a. Ignoring the effect of taxes, what is the accounting break-even quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the cash break-even quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the financial break-even quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What is the degree of operating leverage at the financial break-even level of output? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) a. Accounting break-even quantity b. Cash break-even quantity c. Financial break-even quantity d.…
Question 4 3. We are buying a component for one of our products at a price of $30. We can make this component in-house for $10 per item by an investment of $500,000 and an annual operating cost of $100,000. This investment lasts 10 years with zero salvage value, and MARR is 10% per year. Evaluate "buy" versus "make" option for this component buy calculating the break-even quantity.
Q. 3 The cost of a replacement packaging machine is $95,000. The machine is anticipated to reduce the packaging costs by $20 per parcel. The_purchasing company is expected to yield an output of 25,000 parcels per year. The salvage value of the machine is anticipated to be $23,000 at the end of 10 years. What is the present worth of the machine if the after-tax MARR is 10%, the CCA rate is 20%, and the tax rate is 40%?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS