Purchase the heat exchanger unit

Assignment Help Business Economics

Reference no: EM131808492

A firm is about to begin pilot plant operation on a process it has developed. One item of optional equipment that could be obtained is a heat exchanger unit. The company finds that a unit now available for $30,000 could be used in other company operations. It is estimated that the heat exchanger unit wl be worth $35,000 at the end of eight years. This seemingly high salvage value is due primarily to the fact that the $30,000 purchase price is really a rare bargain. If the firm believes 15% is an acceptable rate of return, what annual benefit is needed to justify the purchase the heat exchanger unit?

Reference no: EM131808492

Questions Cloud

How differentiated are the products that business sells : How differentiated are the products that business sells? The range is from standardized which means every product of every business selling

Identify related laws or legislation that supports : Identify related laws or legislation that supports this perspective. Summarize a logical case outcome and the relief requested from the court.

Convert percentages to numbers of people in population : Your population consists of 28,209 customers. Convert the percentages representing the endpoints of the confidence interval in part b to numbers of people.

Discuss what should the offer price be : The company has determined that stocks with similar characteristics provide a return of 9.5 percent. What should the offer price be

Purchase the heat exchanger unit : If the firm believes 15% is an acceptable rate of return, what annual benefit is needed to justify the purchase the heat exchanger unit?

Discuss about article - the sorry side of sears : discuss specific ethical issues from the article and make recommendations for improvements.

How much cash will be paid to the preferred stockholders : How much cash will be paid to the preferred stockholders and the common stockholders, respectively, if cash dividends of $180,000 are distributed?

Prepare a production cost report : At April 30, 150,000 units were still in work-in-process inventory. Prepare a production cost report using the weighted-average method

Adjusts to changes in productivity growth rate : This problem will ask you to consider in details how the economy in the Solow model adjusts to changes in productivity growth rate.

User Account

All Pages