Compute the eac for both cleaners

Assignment Help Finance Basics
Reference no: EM133069616

You are evaluating two different air cleaners. The Techon I costs $400,000, has a five-year life, and has pretax operating costs of $30,000 per year. The Techon II costs $520,000, has a six-year life, and has pretax operating costs of $26,000 per year. For both cleaners, use straight line depreciation to a book value of $100,000 over the project's life. Assume the market salvage value for both cleaners is zero. Your tax rate is 20 percent and your discount rate is 10 percent.

a) Compute the EAC for both cleaners.

b) Which cleaner do you prefer? Why?

Reference no: EM133069616

Questions Cloud

Estimated required rate of return : Woidtke Manufacturing's stock currently sells for $21 a share. The stock just paid a dividend of $2.40 a share (i.e., D0 = $2.40), and the dividend is expected
Read about successful system implementation : Read about successful system implementation and then answer questions based on your understanding of the concepts.
Determining the value of the stock-simpkins corporation : Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain all of its earnings. However, investors expect Simpkins to b
Firm resource portfolio effectively : How do strategic leaders manage their firm's resource portfolio effectively to exploit its core competencies and leverage its human capital and social capital
Compute the eac for both cleaners : You are evaluating two different air cleaners. The Techon I costs $400,000, has a five-year life, and has pretax operating costs of $30,000 per year.
Making the desired withdrawals after retirement : You are celebrating your 40th birthday today. You want to start saving for your anticipated retirement at age 65. You want to be able to withdraw $100,000 from
Consumer web services startup-electronic device company : Describe and contrast the operational challenges faced consumer Web services startup, iPhone application company, and electronic device company.
What is the price of the 4-year : A 4-year 6.8% coupon bond is selling to yield 7%. The bond pays interest annually. One year later interest rates decrease from 6.8% to 6.2%.
Determine the capitalized cost of the coal mine : Identify all items that the company has reported as Other Comprehensive Income and What is the significance of classifying an item as other comprehensive income

Reviews

Write a Review

Finance Basics Questions & Answers

  In 1965 warren buffett acquired control of a new england

in 1965 warren buffett acquired control of a new england textile business called berkshire hathaway for about 10 a

  Find the present value of the annuity of the first payment

Carl receives a 15 year annuity which makes payments at the beginning of each month. The payments during the first year are 10 dollar per month.

  Explain the difference in the cost of financing

Explain the difference in the cost of financing with foreign currencies during a strong-dollar period versus a weak-dollar period for a U.S. firm.

  What is the npv of agreeing to write the book?

Bill Clinton reportedly was paid $15.0 million to write his book My Life. The book took three years to write. In the time he spent? writing, Clinton could have

  What are the goals of the company

1) What are the goals of the Company? 2) The recording of the journal when the transaction occurs is a method?

  Discuss how the process of interest rate determination

you are the financial manager of a company of your choice. you have been asked to share with a group of college interns

  What is the expected exchange rate one year from now

You invest the total = $10,000 in Europe where the exchange rate is $1.25 $/€. The one year interest rate in Europe is 4%.

  Computation of financial and operating levarages

Computation of financial and operating and combined levarages and Fastron has 1 million shares of common stock outstanding

  The individual project will consist of you picking a

the individual project will consist of you picking a country of your choice. the project will be due the last week of

  What is the internal rate of return of this project

The system is expected to generate positive cash flows over the next four years in the amounts of $350,000 in year one, $325,000 in year two, $150,000 in year three, and $180,000 in year four. Rent-to-Own's required rate of return is 8%. What is t..

  Examine the role of management as it relates to finance in

examine the role of management as it relates to finance in a corporation.nbsp in your post discuss the role of

  Wacc and percentage of debt financing

Hook Industries' capital structure consists solely of debt and common equity. It can issue debt at rd = 12%, and its common stock currently

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