Considering purchasing new boring machine to modernize

Assignment Help Business Economics

Reference no: EM131095874

A small manufacturing firm is considering purchasing a new boring machine to modernize one of its production lines. Two types of boring machine are available on the market. The machines are described by the following characteristics:

Item	Machine A	Machine B
First cost	$7,234	$8,805
Service life	8 years	10 years
Salvage value	$569	$1,026
Annual O&M costs	$729	$606
CCA rate	30%	30%

Determine the break-even annual O&M costs for machine A so that the present worth of machine A is the same as that of machine B. Use a MARR (after tax) of 10% and a marginal tax rate of 30%.

Reference no: EM131095874

Questions Cloud

According to efficient market? theory : According to efficient market? theory, which of the following can best predict the stock price of a particular company? tomorrow?

Monopolist has two specific demanders with demand equations : A monopolist has two specific demanders with demand equations: qA = 10 – p and qB = 10 – 2p. This monopolist implements an optimal two-part tariff pricing scheme, under which demanders pay a fixed fee a for the right to consume the good and a uniform..

With inflation and without inflation : A 10-year project is evaluated under two scenarios: (i) with inflation, and (ii) without inflation. Without inflation under 10% interest rate its present worth is $21,851. If annual inflation of 2% is assumed, then the project's present worth becomes..

Monopolist pursues separate monopoly pricing policy : A monopolist faces a market A demand curve given by: QA = 70 – P and market B demand curve given by: QB = 50 – 0.5P. This monopolist pursues a separate monopoly pricing policy in each market. Assume arbitrage between the two markets can be prevented.

Considering purchasing new boring machine to modernize : A small manufacturing firm is considering purchasing a new boring machine to modernize one of its production lines. Two types of boring machine are available on the market. Determine the break-even annual O&M costs for machine A so that the present w..

Classical economics differ from the keynesian position : Discuss the main points of chapter 11-New Classical Economics. How does New Classical Economics (rational expectations) differ from the original Classical Model? How does New Classical Economics differ from the Keynesian position?

Discuss how and why the effectiveness of fiscal policy : Discuss how and why the effectiveness of fiscal policy depends upon the slope of the LM curve. Hint: Discuss how the behavioral sensitivities (c1, and c2) determines the LM slope, and how changing c1, and c2 influences the fiscal policy effectiveness..

Interpretation and synthesis of published work : A literature review is "an interpretation and synthesis of published work" Merriam, 1986, Case Study Research in Education) and it is not simply an extended essay.

Strategic and global operations management challenges : Develop innovative and sustainable solutions to strategic and global operations management challenges. Apply theories, models, and practices of global operations management to address business problems. Integrate operations management analyses into g..

User Account

All Pages