Manufacturing is considering upgrading a piece of equipment

Assignment Help Financial Management

Reference no: EM13721650

A manufacturing is considering upgrading a piece of equipment. If a certain upgrade helps reduce operating costs by $750 per hour of use, and the upgraded equipment will be used on average 8 hours per day, what is the expected annual savings of upgrading the equipment over its remaining life of 7 years? What other factors do you need to take into consideration to justify the decision to upgrade the equipment? Assume a 5 day work week.

Reference no: EM13721650

Questions Cloud

What is the annual worth of this investment : Carlisle Company has been cited and must invest in equipment to reduce stack emissions or face EPA fines of $18,500 per year. An emission reduction filter will cost $75,000 and have an expected life of 5 years. Carlisle’s MARR is 10 %/year. What is t..

Calculate the yield using a geometric average : One-year Treasury securities yield 3.5%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 6.45%. If the pure expectations theory is correct, what is the yield today for 2-year Treasury securities? Calculate the yield..

What is the yield to maturity of a bond that sells : What is the yield to maturity of a bond that sells for $1,045 today and pays $30 every six months and matures in 12 years if bonds issued today are paying $40.00 annually?

Discussion on the different bond features : Please provide a thorough discussion on the different bond features someone might consider pref. For example, some bonds are tax free (municipal bonds), some are insured. Of course there is a trade off between risk and return. Do you think that there..

Manufacturing is considering upgrading a piece of equipment : A manufacturing is considering upgrading a piece of equipment. If a certain upgrade helps reduce operating costs by $750 per hour of use, and the upgraded equipment will be used on average 8 hours per day, what is the expected annual savings of upgra..

Excess short-term cash in particular money market investment : The treasurer of a large corporation wants to invest $45 million in excess short-term cash in a particular money market investment. The prospectus quotes the instrument at a true yield of 3.65 percent; that is, the EAR for this investment is 3.65 per..

Expected to result in after-tax cash flows : A company has an opportunity to invest in a project that is expected to result in after-tax cash flows of $18,000 the first year, $20,000 the second year, $23,000 the third year, -$8,000 the fourth year, $30,000 the fifth year, $36,000 the sixth year..

Firm currently has equity with a market value : A firm currently has equity with a market value of $600,000,000 and debt with a market value of $500,000,000. The firm has 10,000,000 shares outstanding. The bonds offer investors a return of 8%. The firm is contemplating issuing $300,000,000 in new ..

What is the current value of this investment : An investment offers $10,000 a year for 20 years. If an investor can earn 6 percent annually on other investments, what is the current value of this investment? If its current price is $120,00, should the investor buy it?

User Account

All Pages