Calculate the net present value of the press

Assignment Help Financial Management

Reference no: EM132001019

Pete's Precision Presses is considering purchasing a new press for $200,000. The press will save the company $60,000 per year in production costs for 7 years. After 7 years the press will have a value of $50,000. Depreciation is calculated over 7 years using straight-line. 1. Calculate the Payback Period Should the company buy the press if its minimum ARR is 20%? 3. Calculate the Net Present Value (NPV) of the press using 15% interest. Should the company buy the press using NPV?

Reference no: EM132001019

Questions Cloud

Main areas of focus is data protection : As the CIO of a company engaged in business today, one of the main areas of focus is data protection. Discuss the key data protection points

Provide an argument as an agent with a duty : Corporate officers, such as a chief executive officer, president, chief financial officer, treasurer, corporate secretary, and so on are agents and carry out.

What are the journal entries to record the transactions : Yellow Cab Co. began operations on January 2, 2010. What are the journal entries to record the transactions related to paid vacation days during 2010 and 2011

Explain how the it organization can maintain an ethical : Explain how the IT organization can maintain an ethical posture while managing organizational behavior related to social networking.

Calculate the net present value of the press : Calculate the Net Present Value (NPV) of the press using 15% interest. Should the company buy the press using NPV?

Negative impacts of social networking : List three positive and three negative impacts of social networking. In your opinion, determine whether the positive impacts outweigh the negative

What would be your plan and specific action steps to reach : What would be your plan and specific action steps to reach the best possible outcome for the client, DC&H, Tom, the San Francisco office?

What is the journal entry to record the issuance of bonds : XYZ Company is building a new baseball stadium at a cost of $3,000,000. What is the journal entry to record the issuance of the bonds on January 1, 2010

Depends on execution of service delivery life cycle : Review the steps of the SDLC. Explain why quality service delivery depends on the execution of the service delivery life cycle.

User Account

All Pages