Calculate the present worth and future worth

Assignment Help Financial Management
Reference no: EM131926835

The initial cost of a machine expected to last 9 years is $10,000. Annual operating and maintenance costs are $1000.

Benefits associated with the machine expected to generate $1000 in the first year, increasing by $500 each following year.

The salvage value is $1000. If the MARR is 12%, calculate:

Present worth

Future Worth

Benefit to cost ratio

Simple Payback Period

Reference no: EM131926835

Questions Cloud

Prepare the journal entry to record the sale of given bonds : Assuming instead that the above bonds sold for 104, prepare the journal entry to record the sale of these bonds on January 1, 2017.
How can this property better manage its working capital : How can this property better manage its working capital? Provide specific suggestions for Watree Lodge management.
Calculate rental cost per unit and utilities cost per unit : Calculate the rental cost per unit and the utilities cost per unit for both March and April. Identify which cost is variable and which is fixed.
What is the semi-strong form hypothesis : Which is more informative the covariance or the correlation coefficient? What is the Semi-strong form hypothesis?
Calculate the present worth and future worth : Benefits associated with the machine expected to generate $1000 in the first year, increasing by $500 each following year.
What were nantuas total common fixed expenses : Nantua Corporation has two divisions, Southern and Northern. What were Nantua's total common fixed expenses?
What amount would the insurance company pay : If one family member has doctor and prescription medicali on expenses of sis100, what amount would the insurance company pay?
Develop a reliable estimate of completion by the august one : Nair Corp. enters into a contract with a customer to build an apartment building. Develop a reliable estimate of completion by the August 1, 2015, deadline.
What is the new structure of the industry : Now consider the state of the book publishing industry in 2025, after the transition to the e-book model is complete.

Reviews

Write a Review

Financial Management Questions & Answers

  How was its value determined

Euro was established as a result of the Economic union between countries in Europe to give them more power. How was its value determined?

  Equity is strictly smaller than the value of stock investor

Let P be the price of a stock. The investor wants to purchase Q units of this stock. Suppose investor’s equity is E and assume that equity is strictly smaller than the value of the stock investor wants to purchase. As such, the investor receives a lo..

  When you invest the incoming funds in long-term bonds

you will earn the current interest rate of 8% when you invest the incoming funds in long-term bonds.

  What is the company after-tax cost of debt

The company's capital structure consists of 75% common stock, 15% debt, and 10% preferred stock. What is the company's after-tax cost of debt?

  Loans require monthly payments and are fully amortizing

How would your answer change if the seller of Property B provided a second mortgage for $20,000 at the same 9 percent rate as the assumable loan?

  Calculate the internal rate of return

Calculate the internal rate of return for the following set of cash flows. - If the opportunity cost of capital is 10%, should the project be accepted?

  Construct an amortization schedule

You take out an amortized loan for $10,000. The loan is to be paid in equal instalments at the end of each of the next 5 years. The interest rate is 8%. Construct an amortization schedule.

  Result in initial aftertax cash savings

Scanlin, Inc., is considering a project that will result in initial aftertax cash savings of $1.86 million at the end of the first year, and these savings will grow at a rate of 2 percent per year indefinitely. The firm has a target debt–equity ratio..

  Require stockholders for purchasing share of new stock

what is the maximum amount of rights the CFO can require stockholders for purchasing a share of new stock and so be able to raise the $100 Millions of USDs?"

  Calculate the npv for this improved machine

Your buddy in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes one year to manufacture $1300. However, once built, the machine will last forever and will require no maintenance. Calcul..

  Determine the value relative to the industry

Consider the following data for Company X and its industry. Determine the company's value according to the following methods. Determine the value relative to the industry. Determine the instrinsic value assuming a 5% growth rate for infinity.

  Fight a hostile acquisition bid from an unwanted suitor

What types of actions might the management of a firm NOT take to fight a hostile acquisition bid from an unwanted suitor?

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