What is the economic life of the machine

Assignment Help Financial Management
Reference no: EM132050166

A new machine can be acquired for $25,800. Its operating costs for the first year of operation are expected to be $16,500, and they are expected to increase annually by an arithmetic gradient as the result of combined deterioration and obsolescence. This increase is expected to be $1,060 a year. The salvage value of the machine is expected to be 30% of the first cost whenever the machine is replaced. The minimum required rate of return is 20%. What is the economic life of the machine?

Reference no: EM132050166

Questions Cloud

How much will the bond be worth : You plan to sell the bond three years from now. If similar investments yield 6 percent at that time, how much will the bond be worth?
What is the composition and duration of the new portfolio : What is the composition and duration of the new portfolio? Explain the misattribution bias and the effect it can have on investment behavior.
What is the single loss expectancy : What is the Single Loss Expectancy (SLE)? What is the countermeasure cost for a year? Should the organization purchase this product?
Cash flow from sale-leaseback-continuing to own alternatives : Analyze the cash flows from the sale-leaseback and continuing to own alternatives. What is the NPV of each of these alternatives?
What is the economic life of the machine : The minimum required rate of return is 20%. What is the economic life of the machine?
Invest in the stock if expected net present worth : You will only invest in the stock if your expected net present worth is larger than 0. Find the largest possible value of X."
Calculate percentage changes in eps when economy expands : calculate the percentage changes in EPS when the economy expands or enters a recession.
Experiencing financial difficulties : Aero Tours USA, Inc. has been experiencing financial difficulties and has been late in paying its rent and insurance the last three months.
Calculate portfolio standard deviation : The correlation coefficient between the two is 0.7. Based on this information, calculate the portfolio standard deviation.

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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