Calculate equivalent annual costs of each models

Assignment Help Financial Accounting
Reference no: EM132815207

You are starting a family pizza parlor and need to buy a motorcycle for delivery orders. You have two models in mind. Model A costs $10,000 and is expected to run for 7 years; Model B is more expensive, with a price of $13,500, and has an expected life of 9 years. The annual maintenance costs are $880 for Model A and $640 for Model B. Assume that the opportunity cost of capital is 12 percent.

Problem 1: Calculate equivalent annual costs (EAC) of each models. (Do not round the discount factor. Round intermediate calculations and final answers to 2 decimal places, e.g. 15.25.)

Reference no: EM132815207

Questions Cloud

Strengths and weaknesses as leader and manager : Without giving the actual name of the leader you have selected, identify his or her strengths and weaknesses as a leader and as a manager.
Compute the january ending inventory and cost of goods sold : Compute the January 31 ending inventory and cost of goods sold for January, assuming Denver uses FIFO. January 20:1,060 units @ $64 per unit
What is the gain or loss that Washinqton Inc : Washington Inc. retired the bonds at 102 (after making the interest payment on that date). What is the gain or loss that Washinqton Inc. would report
Identify components of proper literacy learning environment : Identify three major components of a proper literacy learning environment. Discuss three routines that create a proper literacy environment that enhances.
Calculate equivalent annual costs of each models : Calculate equivalent annual costs (EAC) of each models. You are starting a family pizza parlor and need to buy a motorcycle for delivery orders.
How much at revaluation surplus on December : There is no change in the residual value and the remaining useful life of the asset. How much, at revaluation surplus on December 31, 20x2
Acceptance and commitment therapy : What data would you collect if you were to use ACT (acceptance and commitment therapy) to treat OCD, tic disorders, excoriation or hair pulling?
How financing structure and payer mix might influence : Explain how its financing structure and payer mix might influence organizational strategy and clinical action. Cite industry examples as appropriate.
Discuss expected findings to improve program you evaluated : Discuss expected findings and ways to improve the program you evaluated. The best way to learn- learn from your peers. Please share one thing, you learned that.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Prepare the journal entry to record the interest earned

On July 1, 2014, Salt Mine Corporation purchased at par 8% bonds having a maturity value of $250,000. The bonds are dated July 1, 2014, and mature July 1, 2019, with interest payable on July 1 of each year. The bonds are classified in the held-to-mat..

  What will the new cost of retained earnings be

If inflation is expected to increase by 0.03 next year, but everything else remains the same, what will the new cost of retained earnings be?

  What are the major concerns about outsourcing

Locate a recent article on outsourcing practices. Compute the following requirements based on the article. What are the major reasons for the decision to outsource? What are the major concerns about outsourcing? Which business functions are outsource..

  What was the net asset change for the year

What was the net asset change for the year

  Determine how many years would take

If John consistently makes $1200 deposit into his savings account every year, Determine how many years would it take for $1,000,000?

  Disclosed raw materials used in production

Carolina Plating Company reported a cost of goods manufactured of $520,000, with the firm's yearend balance sheet revealing work in process and finished goods of $70,000 and $134,000, respectively. If supplemental information disclosed raw materials ..

  Classify and give reasons for the cash flows falling

The Company has profit before taxes. Classify and give reasons for the cash flows falling under the operating activities and under the investing activities.

  Record the transaction as increase in revenue

Record the transaction as increase in revenue or decrease in expense? alternatively, should the transaction be recorded as a gain

  What is the particular growth rate for the next year

What is the particular growth rate for the next year, at which company will need zero eternal financing (EFN = 0)? What is the internal growth rate?

  Prepare an amortization schedule

Aspen Mining and Milling, Inc. contracted with Raoul Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2014. Aspen paid for the lathe by issuing a $600,000, 3-year note that specified 2% in..

  Multiple choice questions based on business accounts1nbspa

multiple choice questions based on business accounts.1.nbspa corporation and its owners are distinct entitiesa.from a

  What does deegan mean by the statement

What does Deegan mean by this statement? Do you agree with Deegan, or do you think conceptual frameworks exist for other reasons?

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