Considering the purchase of a new bottling machine

Assignment Help Financial Accounting

Reference no: EM13748931

Caine bottling corporation is considering the purchase of a new bottling machine. The machine would cost $200,000 and has an estimated useful life of 8 years with zero salvage value. Management estimates that the new bottling machine will provide net annual cash flows of $34,000. Management also believes the new bottling machine will save the company money because it is expected to be more reliable than other machines, and thus will reduce downtime. How much would the reduction in downtime have to be worth in order for the project to be acceptable? Assume a discount rate of 9%. (Hint: calculate the net present value

Reference no: EM13748931

Questions Cloud

Prepare journal entries in journal form without explanations : Marianna Corporation is authorized to issue 100,000 shares of $5 stated par value stock and 2,000 shares of $100 par value, 6 percent preferred stock. Prepare journal entries in journal form without explanations to record the following transactions:

Company declared a cash dividend : Survivor Company was formed on January 1, 2010 by selling and issuing 20,000 shares of common stock at $15 per share. On December 1, 2010, the company declared a cash dividend of $10,000 which will be paid in cash on January 15, 2011.

Discuss the columbian exchange and what it entailed : Discuss the Columbian Exchange and what it entailed. It has been argued that the Thirty Years' War was the first European-wide conflict. Do you agree? What was the outcome of the war?

Calculates the sum of the mathematical series : Write a Function procedure that implements the above code to calculate 2 to the exponent. This function should accept an Integer value and calculate 2 to that exponent, returning this calculated value in the end - Write a Function procedure that ca..

Considering the purchase of a new bottling machine : Caine bottling corporation is considering the purchase of a new bottling machine. The machine would cost $200,000 and has an estimated useful life of 8 years with zero salvage value. Management estimates that the new bottling machine will provide net..

What type of leadership characteristics does the leader : Explain whether the leader's style is transactional or transformational. What type of leadership characteristics does the leader demonstrate. What aspects of servant leadership does the leader exhibit.

Question regarding the martinez company : Martinez Company has decided to introduce a new product. The new product can be manufactured by either a capital-intensive method or a labor-intensive method. The manufacturing method will not affect the quality of the product. The estimated manuf..

What is the basic elements of a web application : What is the basic elements of a web application and What are three ways CSS can be inserted in an HTML document

Amount of loss on realization should be allocated to alpha : Alpha and beta are partners who share income in the ratio 1:2 and have capital balances of $40,000 and $70,000 at the time they decide to terminate teh partnership. after all non cash assets are sold and all liabilities are paid, there is a cash bala..

User Account

All Pages