What is the present worth of the defender

Assignment Help Financial Accounting
Reference no: EM132939813

Waldorf Manufacturing is operating a production facility, which will be closed in 5 years. A decision needs to be made whether to keep the existing machine in operation for 5 more years, despite its significant wear and tear, or whether to acquire a new machine instead, only to be used for 5 years before sold. The existing machine could be sold for $13000 today, or if kept for 5 more years, could be sold for $2000 in 5 years. Its annual operating expenses are $17000. A new machine could be acquired for $45,000, and re-sold for $20,000 in 5 years. Its annual operating expense would be $10,000. Replacing the existing machine with a new one would have no impact on revenues.

Problem 1: Assume 9% cost of capital. If we set up the problem as comparing the present worth of the defender vs the present worth of the challenger, what is the present worth of the defender? Notes: Use the $13000, $2000, and $17000 in your calculations, and format your answer as the present worth of the existing machine's cash flows (with the negative sign in front). Do not worry about computing the challenger's present worth.

Reference no: EM132939813

Questions Cloud

What net amount of the capitalized software cost : What net amount of the capitalized software cost should be reported on December 31, 2021 statement of financial position
Which is a correct statement concerning business ethics : Which is a correct statement concerning business ethics? Business ethics does not address behavior at any level because it focuses on morality, not behavior.
Which of the statements concerning moral decisions : Which of the statements concerning moral decisions and virtuous decisions is correct? A moral decision is not always a virtuous decision.
Calculate the irr for each of the investments : Using a financial calculator, calculate the IRR for each of the investments. State your answers in percentages rounded to two decimal places.
What is the present worth of the defender : If we set up the problem as comparing the present worth of the defender vs the present worth of the challenger, what is the present worth of the defender?
Show the journal entries required to record tax provision : The amount of future income is estimated at $100,000 per year at the beginning of Year 1. Show the journal entries required to record tax provision
Perform calculations for an income statement : Create an amortization schedule. How can someone use financial tools and functions in their personal life? Perform calculations for an income statement.
Make general journal entries to record transactions of leduc : Prepare General Journal entries to record the above transactions. Made an adjusting entry to record the accrued interest on the Fred Calhoun note.
Find how much do have at the end of twenty years : . In addition, you plan to add to your savings by depositing $10,000 per year in your savings account. How much do you have at the end of 20 years?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Receive payment

It produces its candy and sells it to distributors in May for $220,000, but it does not receive payment until June.

  Determine the total amount of unrealized gain

Determine the total amount of unrealized gain/(loss) that Logic will report as part of Net Income for the year ended December 31, 2020.

  Solve a budget performance report for the supervisor

Solve a budget performance report for the supervisor of Department 5 of Plant M for the month of March. Enter all amounts as positive values

  What tax issues are involved with salary supplements

What tax issues are involved with salary supplements (for travel expenses)? Here is the scenario: A recent college graduate accepted a position that involves significant travel. Her employer is offering a salary supplement to cover the travel and ent..

  Adverse effects of sweatshop labor practices

From the e-Activity, determine at least three (3) ways in which United States’ businesses can address the adverse effects of sweatshop labor practices. Provide one (1) specific example of each way that you have just determined to support your respons..

  Calculate johns insurance need using capital retention

John Wilson is a 42-year-old computer programmer, husband, and father of four. He wants to use the capital retention approach to determine how much life insurance he should purchase. Because of his $105,000 salary and their four children.

  Prepare journal entries for transaction

a. On Sept 1 of the current year, an Accounts Receivable of $15,000 was determined to not be collectable and was written off.

  Calculate the noncontrolling interest in sierra company

Calculate the noncontrolling interest in Sierra Company that would be included in Pampas Inc.'s consolidated balance sheet at December 31, 2016.

  Evaluate the current trend of companies restating statements

ACC 573- Evaluate the current trend of companies restating financial statements. Indicate the key drivers of this trend. Predict the trend over the next five years, providing support for your rationale.

  What amount did concord receive from the bond issuance

What amount did Concord receive from the bond issuance?

  How much is the bad debt expense for the year

Modern Office has $3,000,000 of credit sales, How much is the bad debt expense for the year under the Percentage of Sales (Income Statement) Approach?

  What is the journal entry

A corporate customer brings back a defective print purchased on account for $335. The customer has not yet paid the account, so the customer gets her account credited for the returned print. The cost of the print is $160. What is the Journal entry?

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