User Account

All Pages

Calculate the net present value of this machine to the firm

Assignment Help Accounting Basics
Reference no: EM131722118

Question - Suppose a firm is considering whether or not to buy a piece of machinery which it will use over the next four years.

The machine will cost £1,000 to purchase this year and will give rise to £200, £300, £300 and £400 in maintenance expenses in years 1, 2, 3 and 4 respectively.

The machine will generate revenues of £600, £800, £800 and £800 in years 1, 2, 3 and 4 respectively.

The scrap value of the machine will be £200 at the end of the year 4.

The required rate of return is 10%.

Calculate the Net Present Value of this machine to the firm.

Should the firm purchase the machine based on this NPV?

Reference no: EM131722118

Questions Cloud

What are the best ways to secure vpn connections : Go online and research whether VPNs are secure. What are the best ways to secure VPN connections
Employee motivation through the recognition : 1) Extrinsic rewards increase employee motivation through the recognition of others.
Why is concept of derived demand so important for products : Problem: Organizational Buyer Behavior- Why is the concept of derived demand so important for companies selling products and services to other organizations?
Describe the benefits and limitations of the stamp model : Describe the benefits and limitations of the STAMP model, the Construction Accident Causation model, and the Accident Causation Management .
Calculate the net present value of this machine to the firm : The machine will generate revenues of £600, £800, £800 and £800 in years 1, 2, 3 and 4 respectively. Calculate the Net Present Value of this machine to the firm
Roles of managers in organizational change efforts : What are the roles of managers in organizational change efforts
Discuss the main way in which one would use the tools : Identify two to three (2-3) information technology tools that affect privacy. Next, discuss the main way in which one would use the tools
The chancellor of germany-angela dorothea merkel : Research a country's leader's (The Chancellor of Germany: Angela Dorothea Merkel) reputation and post your findings.
Define interest rates for the businesses : All periods when interest rates are high are times when businesses tend not to expand. Therefore, all times when businesses tend to expand are periods.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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