User Account

All Pages

Compute what net present value of investment in furnace

Assignment Help Financial Accounting
Reference no: EM132513749

A new furnace for your small factory will cost $28,000 and a year to install, will require ongoing maintenance expenditures of $1,600 a year. But it is far more fuel-efficient than your old furnace and will reduce your consumption of heating oil by 2,500 gallons per year. Heating oil this year will cost $3 a gallon; the price per gallon is expected to increase by $0.50 a year for the next 3 years and then to stabilize for the foreseeable future. The furnace will last for 20 years, at which point it will need to be replaced and will have no salvage value. The discount rate is 10%.

Question a. What is the net present value of the investment in the furnace? (Do not round intermediate calculations. Round your answer to the nearest whole dollar.)

Question b. What is the IRR? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Question c. What is the payback period? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Question d. What is the equivalent annual cost of the furnace? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Question e. What is the equivalent annual savings derived from the furnace? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Question f. Compare the PV of the difference between the equivalent annual cost and savings to your answer to part (a). Are the two measures the same or is one larger?

Reference no: EM132513749

Questions Cloud

What is continuous quality improvement : What is Continuous Quality Improvement (CQI)? Provide examples of the types of CQI programs a health care organization may have.
How bright ltd should account for dividend paid by moon ltd : Briefly describe , how bright ltd should account for the dividend paid by moon ltd. On 1 july 2020, bright ltd acquired 50% of the issued share in moon
Topic of your annotated bibliography : The topic of your annotated bibliography is. how do healthcare companies address the issue of privacy in their policies?".
Prepare tabular summary to record salaries : Prepare tabular summary to record salaries and wages expense and salaries and wages payable on March 31. Assume that wages earned
Compute what net present value of investment in furnace : Compute What is the net present value of the investment in the furnace? (Do not round intermediate calculations. Round your answer to the nearest whole dollar.)
Determine the transportation accident : Is this a transportation accident? Why, or why not? Explain the actions required to be taken by the driver in such a scenario.
ITC595 Information Security Assignment : ITC595 Information Security Assignment Help and Solution, Charles Sturt University - Assessment Writing Service - Discuss the strengths and weaknesses
What amount should the lease payments be : If Rabbit wants to charge rent semi-annually starting at the beginning of the lease, what amount should the lease payments be
Identify between the nursing process and research process : What similarities and differences can you identify between the nursing process and the research process? Explain your answer. Please support your response with

Reviews

Write a Review

Financial Accounting Questions & Answers

  What is the difference between ccs expected roe

Assuming a 25% tax rate on taxable income, what is the difference between CC's expected ROE if it finances these assets with 35% debt

  Prepare purchases budget and budgeted income statement

Prepare a purchases budget and budgeted income statement for a merchandiser. In May 2017, the budget committee of Grand Stores assembles the following data in preparation of budgeted merchandise purchases for the month of June.

  An analysis of goulding inc disclosed changes in account

an analysis of goulding inc. disclosed changes in account balances for 2011 and the following supplementary data. from

  Compute the materials price and quantity variances

Marvel Parts, Inc., manufactures auto accessories. One of the company’s products is a set of seat covers that can be adjusted to fit nearly any small car. The company has a standard cost system in use for all of its products. Compute the materials pr..

  Paula purchased a bakery from gianni fiorithe purchase

paula purchased a bakery from gianni fiori.the purchase agreement included a provison that required paula to pay gianni

  Tower company owns of hill company

Tower Company owns 85% of Hill Company. The two companies engaged in several intra-entity transactions. Each company's operating and dividend income for the current time period

  What is the after-tax income if hank sends client the bill

What is the after-tax income if Hank sends his client the bill in December? What is the after-tax income if Hank sends his client the bill in January?

  Compute Corporation H tax payable

Compute the net increase in Corporation H's deferred tax assets or deferred tax liabilities (identify which) for the year. Compute Corporation H's tax payable

  Prior service cost to be amortized to pension expense

Frazier Refrigeration amended its defined benefit pension plan on December 31, 2016, to increase retirement benefits earned with each service year. The consulting actuary estimated the prior service cost incurred by making the amendment retroactive t..

  The current assets and current liabilities for apple

the current assets and current liabilities for apple computer inc. and dell inc. are shown as follows at the end of a

  Depreciation expense and accumulated depreciation

Question 1. Question : Depreciation Expense and Accumulated Depreciation are classified, respectively, as

  The transaction purchase of supplies on account

For Kemp Co., the transaction “purchase of supplies on account” would:

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