User Account

All Pages

Problem related to one off decision

Assignment Help Finance Basics
Reference no: EM131435800

Question: A corporation is considering replacing an existing machine with a new machine. The new machine costs $60,000 plus installation costs of $2,000. It will generate revenues of $155,000 annually and cash expenses annually of $100,000. It will be depreciated to a salvage of $6,000 over a seven-year life using the straight-line method. The old machine has a book value of $40,000 and a remaining useful life of 5 years. It can be sold immediately for $15,000. If retained, the machine will generate revenues of $150,000 and cash expenses annually of $110,000. Assuming the firm has a marginal cost of capital of 12% and is in the 34% marginal tax bracket, should it replace the existing machine? Assume that this is a one-off decision - the choice is either keep the existing machine for five years or buy the new machine and run it for seven years.

Reference no: EM131435800

Questions Cloud

On this basis , find the replacement strategy. : A widget manufacturer operates two machines , each of which has a capacity of 1000 units a year. They have an indefinite life and zero salvage value. The operating cost is $2 per widget. Widget is a seasonal business.
Calculate a benefit-to-cost ratio : QSO 645 Project Selection Journal Guidelines. You are a project manager for a local company that is considering installing a new content management system. Your boss has asked you to do a net present value (NPV) analysis, calculate a benefit-to-cos..
Employee representation across demographic categories : Examine the percentages of employee representation across demographic categories for Tanglewood and the available labor market for Table 1.3. Are there any particular classes or jobs where the representation within Tanglewood appears to be out of lin..
Explain and define four of seven general moral principles : Describe and define four of the seven general moral principles, and explain how the moral principles you chose, could improve an organizations' ethical climate. Please provide examples to support your statements.
Problem related to one off decision : A corporation is considering replacing an existing machine with a new machine. The new machine costs $60,000 plus installation costs of $2,000. It will generate revenues of $155,000 annually and cash expenses annually of $100,000.
Create a range named volunteer-hr : On the Club Information worksheet, in range H6:H16, create a range named Volunteer_Hrs. In range D6:D16, create a range named Class.
How does project integration relate to project life cycle : How does project integration relate to the project life cycle, five process groups, stakeholders, and 10 knowledge areas? What is the project manager's role in integration
The term psychological empowerment : The term psychological empowerment describes how the intrinsic motivation and self-efficacy of people are influenced by leadership behavior, job characteristics, organization structure, and their own needs and values. Explain to Adjunct Faculty that ..
External environment currently affect windowswear : What factors in the external environment currently affect WindowsWear? What are some of the ways the client can position itself to deal with these external environment factors?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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