Calculate equivalent annual costs of models

Assignment Help Finance Basics
Reference no: EM133073045

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 $ 8,300 and is expected to run for 7 years; Model B is more expensive, with a price of $ 15,400, and has an expected life of 10 years. The annual maintenance costs are $ 840 for Model A and $ 610 for Model B. Assume that the opportunity cost of capital is 12 percent.

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.)

EAC of Model A is

EAC of Model B is

Reference no: EM133073045

Questions Cloud

Determine the double-declining-balance rate : A building acquired at the beginning of the year at a cost of $73,200 has an estimated residual value of $3,700. Determine the double-declining-balance rate
The paybacks to PepsiCo after implementing IoT : What were the paybacks to PepsiCo after implementing IoT? Elaborate.
Find the quoted price : Find the quoted price. Find the bond equivalent yield () on a 90-day Canadian T-bill with the same quoted price.
Overall information system architecture : Describe how the systems fit in the overall information system architecture, of which cloud computing is an emerging, distributed computing network architecture
Calculate equivalent annual costs of models : 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 $ 8,300 and is expected to r
Determine sales for the month : Determine sales for the month using the following information. At month-end, cost of merchandise sold is $191,350 and gross profit is $167,990
Standard deviation of after-tax interest expense : The firm is in the 35 percent tax bracket. For the upcoming year, compute the standard deviation of after-tax interest expense on the $4 million in new interest
Prepare a differential analysis dated april : Prepare a differential analysis dated April 30 on whether to sell Product J19 (Alternative 1) or process further into Product R33 (Alternative 2)
Financial analysis of mcdonald : Read the attached file Financial Analysis of McDonald's and write a Summary and Conclusions section for the report. Use this outline for the Summary and Conclus

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the banc one problem

How should Banc One manage its interest rate exposure and what role do derivatives play in its interest-rate risk management?Hint:

  Do you think it is right to use violence to defend

Do you think it is right to use violence to defend your property? For example, if you came home and found a robber leaving with some of your things

  11 households make four kinds of economic decisions suppose

1.1 households make four kinds of economic decisions. suppose you have two households with the same income. household a

  Difference between a primary market and a secondary market

What is the difference between a primary market and a secondary market? Provide examples of well-known markets and categorize them appropriately.

  What is the investor return in us dollars

At that time the Nikkei is trading at 12,220.63 and the exchange rate is 95.26 yen per dollar. What is the investor's return, in U.S. dollars.

  Foreign exchange risks

What are the sorts of foreign exchange risk companies encounter when they deal internationally? It would be great if you could describe in detail with examples if possible.

  Find the profit received by the nursing home

A not-for profit nursing home has total expenses of $20 million, sales tax in the state is 7 percent, expenses are broken down into salaries (12 million dollar), supplies (6 million dollar), and pharmacy (2 million dollar).

  Analysis of financial condition of a company under debt

analysis of financial condition of a company under debt management.in april 1991 the owner and manager of pops

  Investments and economies of scale considerations

How might "lumpy" capital investments and economies of scale considerations affect how one uses the Percent-of-Sales forecasting method?

  Analyze a major life event

In a one-two page paper, analyze a major life event from your own adolescence or early adulthood that had a great impact on you. Analyze how the outcome affecte

  Calculate bank performance ratios

BEO3447 COMMERCIAL BANKING AND FINANCE ASSIGNMENT. Using the data contained in these reports conduct a ratio analysis to measure the performances of this bank for the period 2008-2010. You are required to: Calculate bank performance ratios

  What is the return on portfolio-harley-davidson

If the price of Harley-Davidson increases to $50 per share and the price of Yahoo decreases to $20 per share, what is the return on your portfolio?

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