Use in refuse-power edelectrical generating plant

Assignment Help Business Economics
Reference no: EM131097257

A currently owned shredder originally costing $800,000 was purchased 6 years ago for use in a refuse-power edelectrical generating plant. It was depreciated as MACRS-GDS 5-year property due to its status as analternative energy item. It has a present net realizable value of $210,000 and is expected to have a market value of $10,000 after 4 more years. Operating and maintenance disbursements are $100,000 per year. An equivalent shredder can be leased for $200 per day plus $80 per hour of actual use as determined by an hour meter, with both components assumed to be paid at year-end. Actual use is expected to be 1,500 hours and 250 days per year. Use the cash ?ow approach (insider’s approach), a 4-year planning horizon, a tax rate of 40 percent, andan after-tax   MARR   of 9 percent to perform an after-tax analysis to determine the preferred alternative using the annual cost criterion.

a. Use only the above information. (11.2.2)

b. Consider the addition of a third alternative, to operate without any shredder, at an annual cost of $190,000.(11.2.2)

Reference no: EM131097257

Questions Cloud

Write a paper about mapp vs ohio : Write a paper about Mapp v. Ohio. The assignment overviews the landmark Supreme Court Case Mapp v. Ohio, discussed in Chapter 3 of the text. The body of the assignment should contain the following sections.
Welfare system provides in-kind benefits : Welfare recipients would rather receive cash benefits than in-kind benefits, (medical care, housing assistance, food stamps), but much of the welfare system provides in-kind benefits. Is there a reason for not giving recipients their welfare benefits..
Should terry raise the price of haircuts above $15 : Suppose demand for Terry's haircuts increase to P=40 - 0.40Q. At a price of $15, should Terry raise the price of her haircuts? Why or why not?
What has been your real’ annual interest rate : You invested $10,000 on January 1, 2014, at 7 percent interest compounded annually. You have not touched the investment since that date. You are planning to take your money and close out the investment on January 1,2024. If average in?ation is 3.7 pe..
Use in refuse-power edelectrical generating plant : A currently owned shredder originally costing $800,000 was purchased 6 years ago for use in a refuse-power edelectrical generating plant. It was depreciated as MACRS-GDS 5-year property due to its status as analternative energy item. It has a present..
Raw materials inventories budget : Brown and Jeffrey s, a West Midlands business, makes one standard product for use in the motor trade. The product, known as the Fuel Miser, for which the business holds the patent, when fitted to the fuel system of production model cars has the ef..
Identify the most accurate sentential counterpart : Identify the most accurate sentential counterpart to the natural language proposition. "Either Redbook increases circulation or both Glamour hires models and Cosmo raises its price." R = "Redbook increases circulation"; G = "Glamour hires models";..
Develop a presentation that includes information from video : Develop a presentation that includes information from the video on ways to address anxiety-reducing techniques and improve overall presentation delivery.
Currently experiencing high level of unemployment : A paint firm has just announced that it will be building a new plant in a small town that is currently experiencing a high level of unemployment. The new plant will create 500 new jobs in the area and will occupy unused land at the edge of town.

Reviews

Write a Review

Business Economics Questions & Answers

  Average tax rate

Average tax rate is a. total taxes paid divided by total income b. measures the sacrifice a taxpayer makes c. measures the incentive effects of taxes on work effort, saving, etc. d. Both a and b. e. All of the above.

  Receive social security retirement benefit

Suppose you are now 66 and can apply to receive Social Security Retirement Benefit starting this year. You would get (inflation adjusted amount of) $10000/year if you apply this year. Alternatively, you could delay applying for SS benefits until 70 w..

  Expansionary fiscal policy and contractionary fiscal policy

How does an increase in income tax rate affect economy? Please show it using AD/AS frameowrk. Expansionary fiscal policy: what does it mean? How does it work? Contractionary fiscal policy: what does it mean? How does it work? Please define spending m..

  Including greater enforcement of existing restrictions

The recent immigration of labor into the United States from Mexico has led to increased calls for new restrictions on this movement of labor (including greater enforcement of existing restrictions). What would be the costs and benefits to the United ..

  Wholesale skim milk market is perfectly competitive

Assume that the wholesale skim milk market is perfectly competitive. Suppose demand is described by P=5.10-0.80Q and supply is described by P=1.90+0.20Q. If there are no price controls, what would be the equilibrium quantity?

  Natural monopoly has an incentive to pad

A natural monopoly has an incentive to pad its cost of production under which type of regulation?

  Cost minimization for level of production is equivalent

Cost minimization for a given level of production is equivalent or identical to the concept of product maximization for a given cost level.

  Does private ownership entitle the owners to do anything

What would happen to the size of the cattle population if Americans decided to eat substantially less beef? Explain the logic underlying your answer. Does private ownership entitle the owners to do anything they want with their property? Why or why n..

  The associated linear demand and supply functions

The demand for your college newspaper is 6,000 copies each week if the paper is given away free of charge, and drops to 5,000 each week if the charge is 10¢/copy. However, the university is prepared to supply only 900 copies per week free of charge, ..

  The simple interest for buying a passenger transit rail is

the simple interest for buying a passenger transit rail is shown as the product of the principle amount p time in years

  Using accelerated depreciation rather than straight line

Using accelerated depreciation rather than straight line would normally have no effect on a project's total projected cash flows but it would affect the timing of the cash flows and thus the NPV.

  Determine the firms economic value added

Last year Jamison had EVA® net income of $200,000, cost of capital of 10 percent, and EVA® capital of $750,000. Determine the firm's economic value added.

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