Review problem regarding printing press

Reference no: EM132173448

Question: Independent Speedy Printing (ISP) purchased a printing press for $12,000. The annual operating and maintenance costs of this equipment are $3,500, increasing by $1,000 per year as the printing press gets older. The resale value at the end of the first year is $8,000, reducing by $2,000 each year. If the cost of money is assumed to be 20%, what is the economic life of this press? Do not consider depreciation and tax effects. Assume ISP uses straight-line depreciation, six-year life, and zero resale value for depreciation purposes. Its aggregate tax rate is 40%, and it has a MARR of 10%. What is the economic life of this press? ISP is profitable and can use the tax effect of depreciation.

Reference no: EM132173448

Questions Cloud

What is the importance of multinational corporations : What is the importance of multinational corporations and outsourcing in international business?

What are the parameters you consider to accept suggestion : You are using a car you bought three years ago for $20,000 only to go to work and back. A new metro station is to be opened one block from your house.

Interview an entrepreneur about their venture : Interview an entrepreneur about their venture. After discussing their venture, share your venture idea and ask them if they have any suggestions for you.

How would you apply your new knowledge : Base on the course content, discuss new skills you acquired from this class? How relevant are the new skills to your current and/or future profession?

Review problem regarding printing press : Independent Speedy Printing (ISP) purchased a printing press for $12,000. The annual operating and maintenance costs of this equipment are $3,500.

Pick out the advantages and disadvantage of social media use : Analyze the topic and the content to see how they are related. Pick out the advantages and disadvantages of social media use.

Which targeting strategy you would be following : Describe this innovative idea and Which segmentation technique you would be using to segment the market? And why - Who would be your main competitors

Crisis management planning : Are there additional resources in our industry or government that can help us in our crisis management planning?

Discuss about the economic life of the equipment : Equipment is bought for $20,000; its annual operational costs for the first three years are $3,000, $6,000, and $9,000, respectively, and they will increase.

User Account

All Pages