User Account

All Pages

Each machine meets the specifications for particular task

Assignment Help Financial Management
Reference no: EM13913430

Mercil Corporation is going to buy one of the following two machines. Each machine meets the specifications for a particular task in the company. Mercil's tax rate is 30 percent and its cost of capital is 15 percent. Which machine should Mercil buy and why? LO3Machine A: Costs $90,000 to acquire and $12,000 cash a year to operate in each year of its 10-year life. Annual depreciation is $9,000, and the machine has no salvage value. Machine B: Costs $50,000 to acquire and $24,600 a year to operate in each year of its 10-year life. Annual depreciation is $5,000, and the machine has no salvage value.

Reference no: EM13913430

Questions Cloud

How much cash was received for services provided : Unearned Revenue had a balance of $1,120 at the end of November and $890 at the end of December. Service Revenue was $4,600 for the month of December. How much cash was received for services provided during December?
Window on its upward trajectory : If the rock strikes the window on its upward trajectory, from what horizontal distance from the window was it released?
Decrease the net present value of a project : Which one of the following will decrease the net present value of a project?
An instrument may be negotiated even though : An instrument may be negotiated even though:
Each machine meets the specifications for particular task : Mercil Corporation is going to buy one of the following two machines. Each machine meets the specifications for a particular task in the company. Mercil's tax rate is 30 percent and its cost of capital is 15 percent. Annual depreciation is $5,000, an..
Suppose research at panasonic reveals that prospective : Suppose research at Panasonic reveals that prospective buyers are anxious about buying high definition television sets.
Which of the given condition has not been met : Four conditions must be met before revenue should be recognized. In each of the following cases, tell which condition has not been met:
Why is it that sunk costs are never relevant to a decision : Why do you think Goldratt's Theory of Constraints received so much press by the business community?
What is the project payback period if the initial cost : An investment project provides cash inflows of $705 per year for eight years. What is the project payback period if the initial cost is $1,450? What is the project payback period if the initial cost is $5,800?

Reviews

Write a Review

Financial Management Questions & Answers

  Fundamental analyst

Assume that you are a fundamental analyst that has just made the call of a lifetime by recommending a stock that doubled over the six months following your recommendation. You are now famous and have thousands of people that think you’re infallible a..

  Considering two alternative planes

Shao Airlines is considering two alternative planes. Plane A has an expected life of 5 years, will cost $100 million and will produce net cash flows of $29 million per year. Plane B has a life of 10 years, will cost $132 million and will produce net ..

  Variable selling and administrative expenses

A company produces a single product. Variable production costs are $13.6 per unit and variable selling and administrative expenses are $4.6 per unit. Fixed manufacturing overhead totals $52,000 and fixed selling and administration expenses total $56,..

  What is the new cost of goods sold percent of sales

What is the new cost of goods sold percent of sales for each of the countries and what are your recommendations on choice of country?

  Understanding supply chain and how the consumer can play a

understanding supply chain and how the consumer can play a critical role in the supply chain is an important part of

  Make a portfolio of these two stocks the least risky

Consider two stocks. If all their characteristics remain the same except for the correlation coefficient, which value of the correlation would make a portfolio of these two stocks the least risky?

  Capital market instruments include

Capital market instruments include:

  Find the internal rate of return for series of cash flows

Find the internal rate of return for the following series of cash flows. The initial outlay is $670,560.

  What is the current value of stock-jewellery market

High Class Jewellery is a specialty company in the fine jewellery market. Based on its latest projections, the company expects to increase its annual dividend by 20 percent per year for the next two years and by 15 percent per year for the following ..

  Standard deviation of return on minimum variance portfolio

An investor can design a risky portfolio based on two stocks, A and B. The standard deviation of return on stock A is 25% while the standard deviation on stock B is 14%. The correlation coefficient between the return on A and B is 0.40. What is the s..

  Assume annual compounding

You are a financial analyst with the U. S.- based MNC Prod & Push, which sells consumer products around the world. You report directly to the CFO. You have been assigned the task of negotiating with bankers on certain forward contracts involving the ..

  Shares of stock outstanding at a market price

Joe and Co., an online options broker, is an all equity firm with 60,000 shares of stock outstanding at a market price of $50 a share. The company has earnings before interest and taxes of $87,000. How many shares of stock will you continue to own if..

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd