What salvage value must model

Assignment Help Finance Basics
Reference no: EM131958020

Question: A company is considering buying a new machine. Two different models are available on the market. MARR is 8%.

a. Assuming sum-of-years digits depreciation, what book value will Model -I have after two years?

b. Assuming double declining balance depreciation, what book value will Model- II have after three years?

c. What salvage value (S) must Model -I have after 20 years in order for the equivalent uniform annual cost to equal $27,000?

Reference no: EM131958020

Questions Cloud

Determine the optimal investment profolio : A company is considering investing up to 1.5 million dollars in an investment portfolio consisting of a set of the following five independant capital projects.
What is the present value : The company is considering operating a new driving range facility in Sanford, FL. In order to do so, they will need to purchase a ball dispensing machine.
What will be the outstanding balance : A construction line of credit at 10% per year is available to the company that can be used to cover all the construction expenses plus all of the accrued.
Find the number of units per year the company must sell : The company computes that each unit of production incurs variable operating costs of $21 and sells for $30 . The company's fixed costs are $25,500 per year.
What salvage value must model : What salvage value (S) must Model -I have after 20 years in order for the equivalent uniform annual cost to equal $27,000?
What is the accounting break-even point : A company is considering a 5-year project that opens a new product line and requires an initial outlay of $75,000. The assumed selling price is $97 per unit.
Estimating the relevant cash flows : A company is considering a new project. The CFO plans to calculate the project's NPV by estimating the relevant cash flows for each year of the project's life.
Estimate the present value of the tax benefits : Your Company is considering a new project that will require $570,000 of new equipment at the start of the project.
Compute the net present value of the investment : A company is considering investing in a new machine that requires a cash payment of $55, 948 today. The machine will generate annual cash flows of $22,497.

Reviews

Write a Review

Finance Basics Questions & Answers

  Compute fixed assets turnover ratio from the

compute fixed assets turnover ratio from the followingnbsprsfixed assets550000depreciation on fixed

  Economic order quantity model

Appliance for less is a local appliance store. It costs this store $19.13 per unit annually for storage, insurance etc. to hold microwave in their inventory. Sales this year are anticipated to be 562 units. each order costs $94. The company is uns..

  Explain why the given yield is the relevant one

Highlight the yield that would be more relevant for each of the two bonds - yield to maturity or yield to call. For each, explain why that yield is the relevant

  Draw the cash flow diagram using given information

Bonka, Inc., is considering a robot that will cost $5,000 to purchase. At the end of its 9 year life, its salvage value will be $800.

  What are the main assets of life insurance companies

What are the main assets of life insurance companies? Identify the main categories. What is the main use of funds by life insurance companies?

  Evaluate all of the offers

SYP Products, Inc. Comprehensive Problem. Mr. Selph, President of SYP Products Inc., was pleased to hear that he had three offers from large companies for his latest invention. He will use a discount rate of 10 percent to evaluate all of the offers. ..

  What explains these changes

Over the past year, M. D. Ryngaert & Co. has realized an increase in its current ratio and a drop in its total assets turnover ratio. However, the company's sales, quick ratio, and fixed assets turnover ratio have remained constant. What explains the..

  Explain the two primary functions of bank capital

Explain the two primary functions of bank capital, and how bank capital might be differently perceived by regulators, depositors

  Assuming that interest rates are 10 per annum for all

the spot price of silver is 9 per ounce. the storage costs are 0.24 per ounce per year payable quarterly in advance.

  What characteristics of the board of directors

What characteristics of the board of directors usually lead to effective corporate governance? What are three provisions in the corporate charter.

  What is the estimated price of a call option

If the put premium is $18.00 and interest rates are 0.5% per month, what is the estimated price of a call option with an exercise price of $830?

  Develop an amortization schedule for loan

Y bank has offered you a $1,000,000 5-year loan at an interest rate of 12%, requiring equal annual end-of-year payments that include both principal and interest on the unpaid balance. Develop an amortization schedule for this loan.

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