Calculate the eac for each machine

Assignment Help Financial Accounting
Reference no: EM132524971

Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $3,072,000 and will last for six years. Variable costs are 35 percent of sales, and fixed costs are $215,000 per year. Machine B costs $5,265,000 and will last for nine years. Variable costs for this machine are 30 percent of sales and fixed costs are $150,000 per year. The sales for each machine will be $10.5 million per year. The required return is 10 percent, and the tax rate is 35 percent. Both machines will be depreciated on a straight-line basis. The company plans to replace the machine when it wears out on a perpetual basis.

Question 1: Calculate the NPV for each machine. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Question 2: Calculate the EAC for each machine. (Your answers should be a negative value and indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Reference no: EM132524971

Questions Cloud

Find which reported income are more likely to use accounting : The 'bonus plan hypothesis' of Positive Accounting Theory suggests managers of firms with bonus plans tied to reported income are more likely to use
Prepare the journal entries to revalue the truck on december : Prepare the journal entries to revalue the truck on December 31, 2017, assuming Concord uses the asset adjustment method
TRADES data into volume-based Tiers : Your business user asks you to show them a table output that includes an additional column categorizing the TRADES data into volume-based Tiers,
Dividend would help boost firm valuation : Please discuss whether paying dividend would help boost firm valuation.
Calculate the eac for each machine : Calculate the EAC for each machine. (Your answers should be a negative value and indicated by a minus sign. Do not round intermediate calculations)
How much is the cost of the merchandise destroyed by fire : The new branch of Resilient Company is billed for merchandise it receives at 125% of cost. How much is the cost of the merchandise destroyed by fire
Determine the adjusted balance of the reciprocal accounts : A credit memo for return of defective merchandise for $7,000 was taken by the branch as $17,000. Determine the adjusted balance of the reciprocal accounts
Which statement is true in case of political cost hypothesis : Which statement is true in case of political cost hypothesis of positive accounting theory? Small firms are more likely to use accounting choices that reduce
Direct manipulation and virtual environments : Describe virtual and augmented reality. Suggest a way in which this technology could be used in the future; either to improve a current process / procedure

Reviews

Write a Review

Financial Accounting Questions & Answers

  How much did they pay out to settle customer warranty claims

The ending warranty liability balance was $4300. How much did they pay out to settle customer warranty claims?

  Describe the appropriate means of reporting each situation

Describe the appropriate means of reporting each situation and explain reasoning. Western Manufacturing is involved with several potential contingent liability

  Difference between prepaid expenses and deferred rent

What did the for deferred rent and other liabilities in January 31, 2009? Where did you find this information and what is the difference between prepaid expenses and deferred rent

  Prepare journal entries for the month of march

On 28 February 2019, Darwin-based entity, Prepare journal entries for the above transactions for the month of March 2019 for Phonee Partners.

  Revenue recognition prior to completion of earnings process

Revenue Recognition Alternatives Slattery Company was formed on January 1, 2013, to build a single product. The company issued no-par common stock on that date for $280,000 cash. The product costs $18 to make, all of which is paid in cash at the time..

  What price should matt charge per rental for the business

Matt is happy with the steady rental average of 6,400 per year. For this number of rentals, what price should Matt charge per rental for the business to make a 20 percent life-cycle return on investment?

  Physical count of inventory at the end of accounting period

After performing a physical count of inventory at the end of the accounting period, it was discovered that the amount of inventory on hand was less than the accounting records reported. The entry to record this inventory shrinkage includes:

  An individual retirement account

An individual retirement account, or IRA, earns tax-deferred interest and allows the owner TO INVESTarrow-10x10.png up to $5000 each year. Joe and Jill both will make IRA deposits for 30 years (from age 35 to 65) into stock mutual funds yielding 9.6%..

  Illustrate what is the activity variance for revenue

A restaurant's revenue formula is $25q, where q is the number of meals served. The restaurant's planning budget is based on 400 meals. Its actual level of activity was 380 meals and the actual revenue at that level of activity was $9325. Illust..

  Calculate the net proceeds per share to husker

How many shares of stock will Husker's need to sell in order to receive the $257 million needed? (Round your final answer to the nearest whole number.)

  What is the mean and standard deviation of a portfolio

You are considering allocating between the SP500 and a long term Treasury bond ETF. Assume the SP500 earns 10% of expected returns with 16% annual volatility. Assume the long term bond earns 6% expected returns with 10% annual volatility. Assume a co..

  Calculate the required amortization

Early in 2016, Simons Co. began developing a new software package to be marketed. The project was completed in December 2016 at a cost of $17 million. Of this amount, $14 million was spent before technological feasibility was established. Calculate t..

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