User Account

All Pages

Should dropout replace current equipment

Assignment Help Financial Accounting
Reference no: EM132513542

Droppit parcel company is considering purchasing a new equipment to replace existing equipment that has a book value of zero and market value of $15000. New equipment costs $90000 and expected to provide production savings and increased profits of $20000 per year for the next 10 years. New equipment has expected useful life of 10 years and salvage value of $10000. Straight line depreciation. Effective tax rate : 34% and cost of capital 12%.

Question 1: Should dropout replace current equipment ?

Advise the company using NPV and IRR techniques of capital budgeting.

Reference no: EM132513542

Questions Cloud

Elaborate on the concept of diversity and equal opportunity : Elaborate on the concept of diversity, equal opportunity, and affirmative action in the workplace. Place special emphasis on the legal terminology you learn.
Potential financial situation faced by individual : Briefly summarize a potential financial situation faced by the individual you selected in the Welcome to Waldenville or Good Samaritan Hospital:
Prepare the companys budgeted income statement : Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Prepare the company's budgeted income statement for the year
Develop materials and opportunities to educate employees : Training and development prompts a change within an organization. The goal of training is to identify areas for improvement and develop materials.
Should dropout replace current equipment : Droppit parcel company is considering, Should dropout replace current equipment? Advise the company using NPV and IRR techniques of capital budgeting.
Prepare the company budgeted balance sheet : The beginning balance of retained earnings was $29,000, net income is budgeted to be $12,700, Prepare the company budgeted balance sheet
Create a project for your organization : Create a project for your organization. Prepare a 7 page APA formatted project management plan that details a plan of action to delegate responsibilities.
What is the annual ordering cost of cheese inventory : What is the annual ordering cost of cheese inventory. Cheeseburger and Taco Company purchases 13,962 boxes of cheese each year. It costs $24 to place
Language positively impacted by utilizing digital language : Is comprehension of a second language positively impacted by utilizing digital language learning mediums?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Find the gross profit for april and ending inventory

Find and Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO)

  Question bennett corporation is authorized to issue 1000000

question bennett corporation is authorized to issue 1000000 shares of 1 par value general stock in 2012. starting in

  Prepare consolidated income statement for Holtz and Devine

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., Prepare consolidated income statement for Holtz and Devine

  Prepare a statement of cash flows

Prepare a Statement of Cash Flows in good form using the above information and the indirect method. Prepare the Net Cash Provided by Operating Activities section, using the above information, using the direct method.

  Amount of interest is

Consider a loan of $225,000 at nominal interest rate of 6.25% for 15 years.- How much of the payment during the first year goes towards interest?

  Describe instances where cash based transactions

Without incriminating yourself, please describe instances where "Cash Based" transactions could happen in our local economy or even nationally. Then offer a suggestion for the government, if one is available but if not justify why not, to capture tax..

  Calculate the interest expense if the bonds were sold

Calculate the interest expense for 2008 if the bonds were sold at par. Calculate the interest expense for 2008 if the bonds were sold at a premium and the straight-line premium amortization for 2008 is $2,300.

  What is carrying value of bonds after one year

Gacia Company issued $600,000 of 8%,5-year bonds at 106, with interest paid annually.Asuming straight-line amortization, what is the carrying value of the bonds after one year?

  Installment sale method of accounting for this transaction

On December 15,2013, Rigsby Sales Co. sold a tract of land that cost $3600000 for $4500000. Rigsby appropriately uses the installment sale method of accounting for this transaction. Terms called for a down payment of $500000 with the balance in two e..

  What amount will be reported on the december

On January 1, 2020, Flynn Co. What amount will be reported on the December 31, 2020 statement of financial position for land?

  Calculate cobbs gross profit ratio

The following information pertains to Cobb Corporation's financial results for the past year. Calculate Cobb's gross profit ratio. Calculate Cobb's net profit margin ratio.

  Prepare the sales revenues section of the income statement

The adjusted trial balance of Zambrana Company shows the following data pertaining to sales at the end of its fiscal year October 31, 2010: Sales $800,000, Freight-out $16,000, Sales Returns and Allowances $25,000, and Sales Discounts $15,000.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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