What is the equivalent annual annuities of the best machine

Assignment Help Financial Management

Reference no: EM131927135

1. XYZ, Inc. is considering updating one of its existing machines. They will pick one from the following two machines. The first one costs $150,000 to install, $20,000 to operate per year for 10 years. It will be sold for $50,000 ten years after the installation (t=10). The second one costs $240,000 to install, $12,000 to operate per year for 16 years. It will be sold for $54,000 sixteen years after the installation (t=16). The firm’s cost of capital is 8%. What is the equivalent annual annuities of the best machine?

A. $39,158.61

B. $38,902.95

C. $37,465.61

D. $37,333.70

E. $35,068.25

2. Present Value of an Annuity Due If the present value of an ordinary, 2-year annuity is $5,300 and interest rates are 13 percent, what's the present value of the same annuity due?

$5,489

$5,300

$5,989

$4,800

Reference no: EM131927135

Questions Cloud

What is mitchells target fixed assets and sales ratio : What level of sales could Mitchell have obtained if it had been operating at full capacity? What is Mitchell's Target fixed assets/Sales ratio?

Discuss about the aflcio in brief : Compare and contrast two different points of view on expanding trade by accessing the web site of the U.S. Chamber of Commerce, an industry coalition promoting.

Main function and a function called swap : Write a program that contains both a main function and a function called swap. Your main program should read in two integer values from the keyboard

Write a data mining application plan : Write a data mining application plan that can be implemented using Logistic Regression or Discriminant Analysis (Will Provide the Application).

What is the equivalent annual annuities of the best machine : The firm’s cost of capital is 8%. What is the equivalent annual annuities of the best machine?

What other countries might be potential markets : In 2009, Tata Motors introduced the Nano, a fuel-efficient, two-cylinder-engine automobile that has the lowest CO2 emission of all cars in India.

Explain the problem of determining whether virtues : Explain the problem of determining whether virtues are human perfections or excellences, or socially valuable traits.

What will be the forecast for edwin year-end net income : The tax rate is expected to remain at 40%. On the basis of this information, what will be the forecast for Edwin's year-end net income?

What are the benefits of the current situation : The China-ASEAN Free Trade Area went into effect in 2010. Low wages have encouraged local and foreign manufacturers to phase out their operations in relatively.

User Account

All Pages