Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
One year ago, Caffe Vita Coffee Roasting Co. (CVCRC) purchased three small-batch coffee roasters for $3.3 million. The company now finds that new roasters are available that offer significant advantages. The new roasters can be purchased for $4.5 million, have an economic life of 10 years, and have no salvage value. It is expected that the new roasters will produce a gross margin of $1.2 million per year, so that, using straight-line depreciation, the annual taxable income will be $750,000.
Question 1: The current roasters are expected to produce a gross profit of $600,000 per year and, assuming a total economic life of 11 years and straight-line depreciation, a profit before tax of $300,000. The current market value of the old roasters is $1.5 million. CVCRC's tax rate is 45 percent, and its cost of capital after tax is 10 percent. Determine the Net Present Value of the replacement decision. Choose the best answer from the list below. HINT: Remember to use the with/without approach to determining NPV.
NOTE: Ignore any possible gains or losses on the disposition of equipment and assume zero salvage value at the end of the machines' economic lives. The purpose of this problem is to understand the with/without effect on the future cash flows.
[A] $5.297 million
[B] $2.857 million
[C] $2.297 million
[D] $862K
[E] $4.141 million
[F] -$.56 million
Using the information what was Bala Industries' Cash Flow from Financing for the year ending 6/30/2011? Round to the nearest cent.
1. Internal controls are a set of procedures adopted by an organization primarily to check frauds and errors and increase operational efficiency.Consider the aspects of internal control and respond to the following:List ten internal controls that an ..
Record the transactions in T accounts, prepare a trial balance for the end of the month.
Creative Computing sells a tablet computer called the Protab. The $620 sales price of a Protab Package includes the following: Indicated below whether each item is a separate performance obligation and allocate the transaction price of 120,000 Protab..
At what price did Wrigley's stock last trade? What is the 52-week range of Wrigley's stock? When was the last time Wrigley's stock hit a 52-week high?
Metlock Inc. has completed the purchase of new Dell computers. What is the interest rate, to the nearest percent, used in discounting this purchase transaction?
What is the accounting treatment for the company you've purchased? if the company an asset? or an expense? Cash will be credited 125,000.
comparison of variable costing and absorption costingconsider the following information pertaining to a years
Luthuli Electronics Ltd. commenced business on 1 April 1999, selling television sets both on a cash basis and by instalments. Hire purchase sales require a deposit of one-third of the cash selling price with the balance payable in 18 equal monthly i..
Houston Corporation operates a branch operation in a foreign country. Although this branch deals in pesos, the U.S. dollar is viewed as its functional currency. Thus, a remeasurement is necessary to produce financial information for external reportin..
The Bull Company, a lawn mower manufacturer, is considering the introduction of a new model. The initial outlay required is $22 million. Net cash flows over the 4-year life cycle and the corresponding certainty-equivalents of the new model are as fol..
Considering the economic implications of health insurance expansion in the United States. What are the economic implications of health insurance expansions
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd