If companys marr is 15 should the machine be purchased now

Reference no: EM13231416

Seven years ago a vertical drill was purchased for $10,000. Drill had 12 years of expected life and zero estimated value at the end of that period. The current market value of the drill is $1,000. The new drill's total investment cost would be $12,000. Over the five years this machine would expand sales from $10,000 to $11,500 per year and cut annual operating costs from $7,000 to $5,000. The machine has a salvage value of $2,000 at the end of 5-year period. If company's MARR is 15%, should the machine be purchased now?

Reference no: EM13231416

Questions Cloud

Compute the effusion time of arsine in identical conditions : sulfur dioxide was allowed to effuse through a small opening under constant pressure conditions. It required 179 s for 1.00 L of this gas to effuse. Calculate the effusion time of arsine (AsH3) under identical experimental conditions

Explain your views on the international cultural impact : Explain your views on the 'international cultural impact' of the current banking crisis and support your answer. If it is your opinion that there is no 'international cultural impact' please state why and support your answer.

How to select the better system based on bc analysis : A city government is considering two types of town dump sanitary systems, as shown below. Select the better system based on BC analysis at 8% social discount rate (same as MARR). Design A Design B Initial investment $400,000 $300,000

What types of business decisions or reports can be made : Provide an example of a company you believe has a good network design, providing supporting rationale on why that network is effective and what types of business decisions or reports can be made from its utility.

If companys marr is 15 should the machine be purchased now : Seven years ago a vertical drill was purchased for $10,000. Drill had 12 years of expected life and zero estimated value at the end of that period. The current market value of the drill is $1,000. The new drill's total investment cost would be $12..

Determine how the same focus on quality demonstrated : From the video "Barcelona Restaurant Group", determine how the same focus on quality demonstrated by the Barcelona Restaurant Group could benefit manufacturing operations. Provide specific examples to support your response.

Explain what is the geometric structure of acetone : What is the geometric structure of acetone (CH3)2CO. Indicate the bond angles and specify if they are non-ideal. Help?

Determine what is the present worth of the project : An asset in the 5-yr. MACRS property class cost $100,000 and has no salvage value after six years of use. The asset will generate $300,000 in annual revenues and will require $100,000 in annual labor costs and $50,000 in annual materials costs.

What is the increment in income tax caused by the purchase : A small manufacturing company has an estimated annual taxable income of $95,000. Due to an increase in business, the company is considering purchasing a new machine that will generate additional before-tax annual revenue of $50,000

User Account

All Pages