Chemical company needs a large insulated stainless steel

Assignment Help Financial Accounting

Reference no: EM13923422

The clap chemical company needs a large insulated stainless steel tank to expand its plant. A recently closed brewery has offered to sell their tank for $15,000 delivered. The price is so low that clap believes it can sell the tank at any future time and recover its $15,000 investment.

Installing the tank will cost $9000 and removing it will cost $5000. The outside of the tank is covered with heavy insulation that requires considerable maintenance

Year Insulation maintenance cost

0. $2000

1. 500

2. 1000

3. 1500

4. 2000

5. 2500

(A) based on a 12% before-tax MARR, what life of the insulated tank has the lowest EUAC?

(b) is it likely that the insulated tank will be replaced by another tank at the end of the period wit the lowest EUAC? Explain

Reference no: EM13923422

Questions Cloud

Nonvalue-added costs in a doctor office : When comparing various divisions within a company, describe what problems can arise from evaluating divisions that have different accounting methods, as described in Chapter 11 of your text. Cite three examples of accounting methods that could ca..

Mckey completed manufacturing the brackets : Cascades Enterprises ordered 4,000 brackets from McKey and Company on December 1, 2014, for a contracted price of $40,000. McKey completed manufacturing the brackets on January 17 of the next year and delivered them to Cascades on February 9. McKey r..

Describe the nature of the basis risk in the hedge : Describe the nature of the basis risk in the hedge. In particular what specific events with respect to the shape of the Treasury yield curve and the Eurobond spread over Treasuries could render the hedge ineffective?

What is the primary purpose of manufacturing accounting : Why is departmental accounting important to management? What is the primary purpose of manufacturing accounting

Chemical company needs a large insulated stainless steel : The clap chemical company needs a large insulated stainless steel tank to expand its plant. A recently closed brewery has offered to sell their tank for $15,000 delivered. The price is so low that clap believes it can sell the tank at any future time..

50 rooms protected for full-price rooms : 1. The Inn at Columbia has 150 rooms with standard queen-size beds and two two rates: a full price of $200 and a discount price of $120. To receive the discount price, a customer must purchase the room at least two weeks in advance (this helps to ..

Analyze the literature on two areas of controversy : Discuss and analyze the literature on two areas of controversy or unanswered questions related to the theory.

Calculate the black-scholes value of analogous call option : Estimate the fair value of the warrants, first using the relevant information to calculate the Black-Scholes value of an analogous call option.

Decision making with managerial accounting : For your Final Paper, you will analyze the role of managerial accounting in two parts. Part I will provide a general overview of managerial accounting. Part II will provide examples of how managerial accounting theories and principles are applied ..

User Account

All Pages