Determine if the new column should be purchased

Assignment Help Business Economics

Reference no: EM13150201

A local chemical company is considering replacing its existing distillation column with a new more efficient column. The new column costs $30 million. It has a life of 10 years and a salvage value 500,000. The existing column cost $2.0 million, will last 4 more years and have no salvage value. It could be sold now for $1,400,000. The new column is expected to save $300,000 per year. If the interest rate is 8%, determine if the new column should be purchased. Solve by both present worth and annual cash flow analysis methods.

Reference no: EM13150201

Questions Cloud

Compute the partial pressure of water above : Calculate the partial pressure of water above the solution, in torr.The vapor pressure of pure water at 55°C is 118.0 torr. The MW of lactose is342.3 g/mol

Calculate the moles of nitrogen gas : Calculate the moles of N2 that will be in 224 L at STP and the partial pressure of O2 in Pa for air at 2.50 atm pressure

What amino acids could be found in the resulting proteins : You make some RNA in vitro by adding some NTPs into a tube. You want to reproduce some of the work that led to an understanding of how the genetic code works. You mix two nucleotides together in a 3C to 1G ratio.

Determining tax consequences and alternatives : How much gain is recognized by Nathan? What is the character of the gain? What are the tax consequences and alternatives to Michelle? Is there a difference if Ben sold his entire interest?

Determine if the new column should be purchased : If the interest rate is 8%, determine if the new column should be purchased. Solve by both present worth and annual cash flow analysis methods.

What is the freezing point of a solution : What is the freezing point (°C) of a solution prepared by dissolving 11.3 g ofCa(NO3)2 (formula weight= 164 g/mol) in 115 g of water? Assume that i=3.00 for Ca(NO3)2 and the molal freezing point depression constant for water is1.86°C/m.

Which investment should be chosen : The net present worth of each investment for a MARR = 12%. The equivalent uniform annual profit of each investment for a MARR = 12%. Which investment should be chosen?

Responsibility accounting system : In Golub's responsibility accounting system, how much advertising expense should be charged to the department responsible for marketing Product A?

Dells business model for employees : What are some of the intangible benefits to taking this approach in Dell's business model for employees?

User Account

All Pages