Two different conveyor belt systems

Assignment Help Financial Management
Reference no: EM131886234

Hagar Industrial Systems Company (HISC) is trying to decide between two different conveyor belt systems. System A costs $244,000, has a four-year life, and requires $76,000 in pretax annual operating costs. System B costs $342,000, has a six-year life, and requires $70,000 in pretax annual operating costs. Both systems are to be depreciated straight-line to zero over their lives and will have zero salvage value. Whichever system is chosen, it will not be replaced when it wears out. The tax rate is 35 percent and the discount rate is 10 percent. Calculate the NPV for both conveyor belt systems. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. A negative answer should be indicated by a minus sign.)

NPV System A $

System B $

Reference no: EM131886234

Questions Cloud

Worst-case and best-case npvs for project : What are your worst-case and best-case NPVs for this project?
What is wilson time-weighted rate of return : On the following January 1, his fund balance is 3000 dollars. What is Wilson's time-weighted rate of return?
What is the financial break-even point for project : The appropriate discount rate is 10 percent. What is the financial break-even point for the project?
What is the estimated value of the common stock : Carlson Enterprises' common stock dividend is expected to grow at 4% per year. What is the estimated value of the common stock?
Two different conveyor belt systems : Hagar Industrial Systems Company (HISC) is trying to decide between two different conveyor belt systems.
What is the expected future growth rate of the dividend : what is the expected future growth rate of the dividend?
Annual return on the stock-what is the current price : If investors require a 12% annual return on the stock, what is the current price? The current price of the stock is $__.
What is wally time-weighted rate of return : What is Wally's time-weighted rate of return?
Explain the importance of understanding investment decisions : Explain the importance of understanding investment decisions and their consequences in retirement planning.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the effective interest cost for the first year

What is the effective interest cost for the first year if the annual LIBOR is 4.40% during the first six months and 4.80% during the second six months.

  Calculate average annual returns for two stocks and index

calculate annual returns for Goodman, Landry, and the Market Index, and then calculate average annual returns for the two stocks and the index.

  Data source is morningstar

Calculate MVA in 2016 and 2015 for both companies. Data Source is Morningstar.

  Since its inception eco plastics company has been

since its inception eco plastics company has been revolutionizing plastic and trying to do its part to save the

  What is the required rate of return on the stock

Property, Inc’s stock pays $4.25 dividends per share and it is expected to pay the same amount indefinitely. The stock is currently selling for $59. What is the required rate of return on the stock?

  What''s your general impression about the book

How would you comment on your thoughts and feelings about international financial system and capital markets after you read this book?

  Asymmetries between firm insiders and investors

What type of signals do debt and equity provide about the information asymmetries between firm insiders and investors?

  What is delta of tranche with respect to index

What is the tranche expected loss? What is the delta of tranche with respect to index?

  Partnership assets were not sufficient to pay all claims

Liability of General Partners Pat McGowan, Val Somers, and Brent Robertson were general partners of Vermont Place, a limited partnership formed for the purpose of constructing duplexes on an undeveloped tract of land in Fort Smith, Arkansas. The part..

  What was the delta ray brands net income after-tax

Delta Ray Brands Corp. just completed their latest fiscal year. The firm had sales of $16,306,200. Depreciation and amortization was $898,000, interest expense for the year was $804,700, and selling general and administrative expenses totaled $1,513,..

  What are these payments worth to you on the day

Your grandmother is gifting you $100 a month for four years while you attend college to earn your bachelor's degree. At a 5.2 percent discount rate, what are these payments worth to you on the day you enter college?

  Investment that generates the cash flows

You have just purchased an investment that generates the following cash flows for the next four years. You are able to reinvest these cash flows at 8.4 percent, compounded annually.

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