XYZ Manufacturing is considering purchasing a new machine. The machine will cost $60,000 and will be depreciated using bonus depreciation. It will be sold for scrap metal after 5 years for $11,000. The machine will save XYZ Manufacturing $30,000 per year in energy expenses. The tax rate is 30%. If the discount rate is 11%, should the machine be purchased? Show clearly each step of your calculations.
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- The Ham and Egg Restaurant is considering an investment in a new oven that has a cost of $60,000, with annual net cash flows of $9,950 for 8 years. The required rate of return is 6%. Compute the net present value of this investment to determine whether or not you would recommend that Ham and Egg invest in this oven.Bouvier Restaurant is considering an investment in a grill that costs $140,000, and will produce annual net cash flows of $21,950 for 8 years. The required rate of return is 6%. Compute the net present value of this investment to determine whether Bouvier should invest in the grill.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.
- If a copy center is considering the purchase of a new copy machine with an initial investment cost of $150,000 and the center expects an annual net cash flow of $20,000 per year, 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.You are considering purchasing a new punch press machine. This machine will have an estimated service life of 10 years. The expected after-tax salvage value at the end of service life will be 10% of the purchase cost. Its annual after-tax operating cash flows are estimated to be $60,000. If you can purchase the machine at $308,758, what is the expected rate of return on this investment? Answer in Excel
- You are considering purchasing a new injection molding machine. This machine will have an estimated service life of 10 years with negligible after-tax salvage value. Its annual net after-tax operating cash flows are estimated to be $60,000. If you expect a 15% rate of return on investment, what would be the maximum amount that you should spend to purchase the injection molding machine?Please solve correctly . You are considering purchasing a dump truck. The truck will cost $75,000 and have operating and maintenance costs that start at $18,000 the first year and increases by $2,000 per year. Assume that the salvage value at the end of five years is $22,000 and interest rate is 15%. What is the annual operation and maintenance costs of owning this vehicle?XYZ is considering buying a new, high efficiency interception system. The new system would be purchased today for $47,700.00. It would be depreciated straight-line to SO over 2 years. In 2 years, the system would be sold for an after-tax cash flow of $14,600.00. Without the system, costs are expected to be $100,000.00 in 1 year and $100,000.00 in 2 years. With the system, costs are expected to be $79,000.00 in 1 year and $69,700.00 in 2 years. If the tax rate is 46.50% and the cost of capital is 8.40%, what is the net present value of the new interception system project? a. $11893.11 (plus or minus $50) b. $12724.27 (plus or minus $50) c. $8553.76 (plus or minus $50) d. $9953.14 (plus or minus $50) e. None of the above is within $50 of the correct answer
- Your company is considering the replacing an old machine with a more efficient model. The new machine costs $39,500, will last for 7 years and save $12,900 per year in expenses. The discount rate is 18% and the tax rate is 26%. The machine will be depreciated on a straight line basis to zero. The old machine is fully depreciated and can be sold today for $2,700. A) what is the amount of initial investment required? B) what is the after-tax gain on the sale of the old machine? The old machine is fully depreciated. C) what is the amount of operating cash flow (OCF) per year? D) what is the NPV of the project?Tripp Industries is considering buying a new recycling system. The new recycling system would be purchased today for $7,760.00. It would be depreciated straight-line to $1,060.00 over 2 years. In 2 years, the recycling system would be sold and the after-tax cash flow from capital spending in year 2 would be $1,290.00. The recycling system is expected to reduce costs by $2,810.00 in year 1 and by $8,610.00 in year 2. If the tax rate is 59.00 % and the cost of capital is 7.16%, what is the net present value of the new recycling system project? $426.49 (plus or minus $10) $331.08 (plus or minus $10) $1,078.26 (plus or minus $10) -$2,115.95 (plus or minus $10) None of the above is within $10 of the correct answerBlossom Manufacturing is considering the purchase of a new sewing machine that costs $23200. The machine, because of its efficiency, will save about $4960 in cost each year. The machine is expected to have a salvage value of $3720 and a life of 6 years. Blossom's required rate of return is 12%. Click here to view the factor table. Using the present value tables, what is the machine's net present value? (round to the nearest dollar) O $18600 $-3402 O $-922 O $29760