Should the old unit be replaced now

Assignment Help Business Economics

Reference no: EM13152825

A disk storage unit cost $320,000 when purchased 3 years ago. An improved system now available can decrease processing time 20%. The user is offered a trade in value of 25% of original cost. The new unit costs $375,000. The entire computer system will be replaced in 4 years. At that time the salvage values of the old and new storage units will be $25,000 and $50,000 respectively. The present system is operated 8 hours per day, 25 days per month. Computer time saved is worth $325 per hour and the interest rate is 12% compounded monthly. Should the old unit be replaced now? If the system is used 16 hours per day, calculate the IRR represented by using the improved storage system.

Reference no: EM13152825

Questions Cloud

Calculate the ph of the solution : A solution is made by dissolving 18.4g of HCl in 662 mL of water. Calculate the pH of the solution. Assume that the volume of the solution is also 662 mL

Define chemical reactions doubles in rate : Assuming that a chemical reactions doubles in rate for each 10 C Temperature increase, by what factor would the rate increase

Predict the phenotypes of thier f1 offspring : In a certain mosquito, golden bodies is a recessive X-linked mutation, and brown eyes is a recessive autosomal-linked mutation. A homozygus xx female with golden body is mated with a homozygus XY male with brown eyes.

What is the actual population of interest : The animals are ordered from a supply company, housed in an animal care facility not under the direct control of the experimenter, and are supplied on an as-needed basis.

Should the old unit be replaced now : Computer time saved is worth $325 per hour and the interest rate is 12% compounded monthly. Should the old unit be replaced now? If the system is used 16 hours per day, calculate the IRR represented by using the improved storage system.

Journal entries for the consolidation : Lisa Co. paid cash for all of the voting common stock of Victoria Corp. Victoria will continue to exist as a separate corporation. Journal entries for the consolidation of Lisa and Victoria would be recorded in :

What is the relationship between good x and y : What is the relationship between good X and Y. With the aid of a well-labeled diagram, show what happens to equilibrium price and quantity of good X, if the price of good Y increases.

Transactions of carson company : Described below are certain transactions of Carson Company for 2007: On May 10, the company purchased goods from Jay Company for $50,000, terms 2/10, n/30. Purchases and accounts payable are recorded at net amounts. The invoice was paid on May 18.

What is the new gas pressure : A 12.0g- sample of a gas has a volume of 5.25g at 28 celcius and 757mmHg If 2.7g of the same gas is added to this constant 5.25L- volume and the temperature raised to 64 celsius, what is the new gas pressure?

User Account

All Pages