Present level of operations

Assignment Help Finance Basics
Reference no: EM13962198

Rank Buildersis considering the replacement of its existing machine, which is obsolete, with either of the following two alternatives:

(i) Machine A which is similar to the existing one or

(ii) Machine B which is more expensive and has much greater capacity.

The cash flow at the present level of operations under the two alternatives are as follows:

Cash Flows

0

1

2

3

4

5

Machine A

(525,000)

45,000

105,000

355,000

295,000

210,000

Machine B

(840,000)

210,000

295,000

355,000

375,000

300,000

Rank's cost of capital is 10%. Help the owner evaluate the alternative machines by calculating the following:

A. Payback

B. Discounted Payback Period

C. Net Present Value

D. MIRR

Which machine would you advise him to buy and why?

Reference no: EM13962198

Questions Cloud

Determine the name of person : The following bytes (shown in hex) represent a person's name as it would be stored in a computer's memory. Each byte is a padded ASCII code. Determine the name of each person.
What do you already know about the topic : What do you already know about the topic? Can you provide any background information to help your readers understand why it is important to you? (Make sure you only use what YOU already know, don't look to outside sources for background informat..
Evaluating the various health insurance plans : 1. In evaluating the various health insurance plans, what factors should the Lawrences look for in a good health insurance plan? 2. When considering disability income insurance, what are the trade-offs of purchasing this type of insurance and how d..
Discuss ethical practices utilized by law enforcement : Discuss ethical practices utilized by law enforcement that help them to maintain their objectivity throughout their investigation of this incident, Jamal and Juan''s backgrounds, and the underlying interests of social order.
Present level of operations : (i) Machine A which is similar to the existing one or (ii) Machine B which is more expensive and has much greater capacity. The cash flow at the present level of operations under the two alternatives are as follows:
Find the time needed to reverse course : An airplane traveling at 529 km/hr needs to reverse its course. The pilot decides to accomplish this by banking the wings at an angle of theta = 41.0 degree. Find the time needed to reverse course.
Write paper detailing issues were that opened enron up fraud : Watch the "Enron: The Smartest Guys in the Room" - write a 2-3 page paper detailing what you think the issues were that opened Enron up for fraud.
Develop a brief roadmap for implementation : Discuss how you will implement your strategic plans, including how teams should be implemented in each department - Develop a brief roadmap for implementation.
How long does it take her to reach the shore : A 500 N woman stands in the middle of a frozen lake of radius lOOm. The ice is frictionless so she can't walk. She decides to sacrifice one of her 0.5 kg shoes and throws it horizontally at 5 m/s. How long does it take her to reach the shore?

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the maximum exchange ratio

What is the maximum exchange ratio would the A Corporation shareholder accept in taking over X Corporation and remain whole in terms of earnings per share? (note you will need to use the formulas in the book to solve this)

  Explain how inflation or purchasing power impacts stated or

explain how inflation or purchasing power impacts stated or nominal interest rates.what are the pros and cons of

  Now suppose you hold a portfolio consisting of 250000 worth

suppose you owned a portfolio consisting of 250000 worth of long-term u.s. government bonds.a. would your portfolio be

  What is the current price of the common stock

The company's last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock?

  Assume that interest rates have increased substantially

assume that interest rates have increased substantially. would this tend to increase or decrease the market value of a

  What is the cash-flow adjusted rate of return

At the end of December, the account is worth $3,060,000.00. What is the cash-flow adjusted rate of return for December?

  Apiece of newly purchased industrial equipment costs

a piece of newly purchased industrial equipment costs 1080000 and is classified as seven-year property under macrs

  Discuss the concept of lifestyle and how it may change over

1. discuss the concept of lifestyle and how it may change over time.2. discuss strategies for paying for college

  Shelly sands decided to retire to hawaii in 8 yearsnbsp

shelly sands decided to retire to hawaii in 8 years.what amount should shelly invest today so that she will be able to

  The capital structure for the firm will be maintained and

coogly company is attempting to identify its weighted average cost of capital for the coming year and has hired you to

  Estimate the value per share of stock

Bohen Inc is expexted to pay $1.50 per share dividend of the year is $1.50. The dividend is expected to grow at constant rate of 7 percent. The required rate of return on the stock r is 15 percent.

  How much will you pay for a share today

The company will pay a $10 per share dividend in 10 years and will increase the dividend by 5% year thereafter. If the required an 11% return on the company's stock, how much will you pay for a share today?

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!

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