What is the equivalent annual cost of this equipment

Assignment Help Financial Management

Reference no: EM131832446

Bridgton Golf Academy is evaluating new golf practice equipment. The "Dimple-Max" equipment costs $109,000, has a 4 year life, and costs $10,100 per year to operate. The relevant discount rate is 11 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $25,500 at the end of the project’s life. The relevant tax rate is 35 percent. All cash flows occur at the end of the year. What is the equivalent annual cost (EAC) of this equipment?

Reference no: EM131832446

Questions Cloud

Of the three points on the consumers budget constraint : The utility-maximizing bundle of goods is found at the point of tangency between the budget constraint and an indifference curve.

Define common data elements amongst various data sets : Suppose you are tasked with finding common data elements amongst various data sets. Specify how an INTERSECT operator may assist you in accomplishing this task.

Book and market values of the firm stockholders equity : Ava’s SpinBall Corp. lists fixed assets of $22 million on its balance sheet. Calculate the book and market values of the firm’s stockholders’ equity.

What type of wiring would you suggest : A retail department store is approximately square, 35 meters (100 feet) on each side. What type of wiring would you suggest?

What is the equivalent annual cost of this equipment : Bridgton Golf Academy is evaluating new golf practice equipment. What is the equivalent annual cost (EAC) of this equipment?

Describe importance of using sub queries in database system : Extracting and interpreting data can be very valuable to an organization. Describe the importance of using sub queries in a database system.

What is the standard deviation of a portfolio of two stocks : What is the standard deviation of a portfolio of two stocks given the following data? Stock A has a standard deviation of 22%. Stock B has a standard deviation

How e-mail is encapsulated as it leave the CSMNCD network : Show how the e-mail message is encapsulated as it leaves the CSMNCD network, enters the router, and then leaves the router.

Generate revenue using given type of advertising : If you are the CIO or an executive manager at a small company that depends on this type of advertising to generate revenue, how might this affect your feelings.

User Account

All Pages