Appropriate discount rate for machines

Assignment Help Finance Basics
Reference no: EM133070342

Office Automation, Inc. must choose between two copiers, the XX40 or the RH45. The XX40 costs $900 and will last for three years. The copier will require $120 in maintenance each year.

The RH45 costs $1,400 and will last five years. The copier will require $110 in maintenance each year.

The appropriate discount rate for both machines is 15%. Which copier should the company choose and why? (Use Equivalent annual cost to answer this question)

a. EAC for XX40: ______________

b. EAC for RH45: _______________

c. Which copier should you chose and why? __________________________________________

Reference no: EM133070342

Questions Cloud

What is the bond yield to maturity : Suppose a 10 year, $1,000 bond with an 8% coupon rate and semi-annual coupons is trading for a price of $1034.74.
What is project a npv : Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. What is Project A NPV
Business values for the organisation : Assessment of business requirements for developing a business plan - Analysis of business plan objectives and financial targets for the business plan
Discuss the stimulus package : Discuss the stimulus package Topic from the current media on a banking perspective. Collect at least three articles from different point of views from such sour
Appropriate discount rate for machines : Office Automation, Inc. must choose between two copiers, the XX40 or the RH45. The XX40 costs $900 and will last for three years. The copier will require $120 i
Criminal justice system : The criminal justice system through a project focusing on criminal justice policies and procedures, criminal justice theories, and research methodologies.
Importance of the statement of financial position : Explain the importance of the statement of financial position? Explain with an explanation of a practical example (explanation and numbers are required)
Income statement and cash flow statement : What are the differences between the income statement and the cash flow statement? Explain with a practical example of each list
Concepts of crime-deviance and delinquency : As a student of criminology, you should have a firm grasp of the concepts of crime, deviance, and delinquency.

Reviews

Write a Review

Finance Basics Questions & Answers

  Continuous improvement and innovative initiatives

What types processes or procedures support project management, continuous improvement and innovative initiatives?

  What is the value of x

A bond dealer wishes to make a profit from coupon stripping. The dealer buys a $10,000,000 3-year corporate par value bond that pays semi-annual

  Expected overall payoff of bank

Consider two local banks. Bank A has 82 loans? outstanding, each for? $1.0 million, that it expects will be repaid today. Each loan has a 4% probability of? def

  What is included in nike''s balance sheet cash account

Compute the change in NIKE's current ratio and working capital from 2008 to 2009. Which accounts are the most important in explaining that change?

  What are the initial cash flows in year 0

What are the Initial Cash Flows in Year 0? What are the Operating Cash Flows in Year 2? What are the Terminal Cash Flows in Year 4?

  What is the price/earnings ratio of the merged firm

If Maytag accounts for 60 percent of the earnings of the merged firm, and if there are no synergies between the two merged firms, what is the price/earnings ratio of the merged firm?

  What is a trend and what types of trend

What is a trend and what types of trend might be indicated by performance data that is collected within the organsation?

  Briefly describe two basic types of transactions

Question - Identify and briefly describe two basic types of transactions that are exempt from registration with the SEC

  What is the present value today of a perpetuity

What is the present value today of a perpetuity that has its first cash flow of $9874 per year occuring in 12 years time, if the interest rate is 4.9%?

  Determine how much the fra is worth and who pays

Determine how much the FRA is worth and who pays who - the buyer pays the seller or the seller pays the buyer?

  What is the value of stock today

What is the value of this stock today if the required return is 14%?

  Determine the value of a cpc perpetual bond

1. Determine the value of a $1,000 CPC perpetual bond with a 4% coupon rate when the required rate of return is 4%? What is its value if the required rate were

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd