Considering the purchase of new phone system

Assignment Help Financial Management
Reference no: EM131924590

Sony Corporation is considering the purchase of a new phone system for a sales office in Boise, Idaho. The Lucent Technologies system costs $54,000, has annual operating expenses of $4,000 and an expected life of 9 years. The Toshiba system has a cost of $48,000, annual operating expenses of $4,000 and an expected life of 7 years. Ignoring depreciation and taxes and assuming a cost of capital of 9 percent for such an investment, which system should Sony purchase? You are free to use either replacement chain or EAA/EAC analysis.

Reference no: EM131924590

Questions Cloud

How you will create buy-in among invested parties : CJ 500 Propose a solution to address the issue in criminal justice, justifying your proposal with your previous research
Discuss about an important marketing concept : Write a response about this article and what you find to be an important marketing concept/strategy to consider when dealing with products in the decline stage.
Assuming they both would perform the required tasks : Which model would be the best choice assuming they both would perform the required tasks?
Company is considering replacing canning machine : International Soup Company is considering replacing canning machine. The machine will be depreciated straight line over its five-year life.
Considering the purchase of new phone system : Sony Corporation is considering the purchase of a new phone system for a sales office in Boise, Idaho.
Cheaper on per-year basis than leasing the machine : Determine if owning the machine would be cheaper on a per-year basis than leasing the machine.
Current exchange rate for russian ruble : Suppose the current exchange rate for the Russian ruble is RUB 37.71. Difference in the annual inflation rate.
What is the npv of new investment : What is the NPV of this new investment if the firm's required rate of return is 12%? What is the IRR? Should the project be accepted?
Analyze how effectively the program will address the needs : HCS412: Health Promotion Planning & Evaluation - imagine that you are a staff member at the company and have attended this presentation

Reviews

Write a Review

Financial Management Questions & Answers

  How much external financing will the firm have to seek

How much external financing will the firm have to seek?

  What is the average accounts receivable figure

Skye Flyer, Inc., has weekly credit sales of $18,800, and the average collection period is 51 days. What is the average accounts receivable figure?

  Twenty-year zero coupon bond with a face value

Suppose that iyou invested in a twenty-year zero coupon bond with a face value of $1000

  Economic exposure to exchange rate risk

Corporations have both accounting exposure and economic exposure to exchange rate risk. What is the difference between these two? Which types of exposure would be most significant, and why?

  Municipal bonds and mortgage bonds and debentures

Explain the difference between municipal bonds and mortgage bonds and debentures.

  What would risk-free rate have to be for two stocks

Stock Y has a beta of 1.45 and an expected return of 13.50 percent. Stock Z has a beta of .70 and an expected return of 10.00 percent. What would the risk-free rate have to be for the two stocks to be correctly priced relative to each other?

  Projects subsequent cash flows are critically dependent

Norris Production Company (NPC) is considering a project that has an up-front cost at t = 0 of $2,500. (All dollars in this problem are in thousands.) The project's subsequent cash flows are critically dependent on whether a competitor's product is a..

  Calculate depreciation for each year-after-tax salvage value

Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $681,600 is estimated to result in $227,200 in annual pretax cost savings. Calculate the depreciation for each year and use to ..

  Use the free cash flow method of valuation

Use the Free Cash Flow method of valuation and the following data, to calculate the value for a venture with the following information.

  What if the firm used much more debt to fiance it assets

what if the firm used much more debt to fiance it assets?

  How much of the original loan have you paid off

How much of the original loan have you paid off?

  What is equivalent cost per mile for the new company cars

A company’s technicians do many service calls to their customers’ sites and have been using their own cars, for which the company reimburses them at a rate of $0.56 per mile. A technician travels an average of 35,000 miles per year. If the interest r..

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