User Account

All Pages

Which equipment should axel select

Assignment Help Accounting Basics
Reference no: EM13993011

P10-A-9B-Calculating Present value

Axel needs new manufacturing equipment. Two companies can provide similar equipment but under different payment plans:

Plan A: MRE offers to let Axel pay $55,000 each year for five years. The payment include interest at 12% per year.

Plan B: Western home will let Axel make a single payment of $425,000 at the end of five years. This payment includes both principal and interest at 12%.

Requirements

1. Calculate the present value of Plan A.

2. Calculate the present value of Plan B.

3. Axel will purchase the equipment that costs the least, as measured by present value. Which equipment should Axel select? Why?

Reference no: EM13993011

Questions Cloud

Which would be most effective blocker : If you had equal thicknesses of each substance, which would be most effective blocker? Which would be the least effective blocker?
What is the probability that at least one of them : The company president always invites one of the 5 vice presidents to attend games with him, and claims he selects the person to attend at random.
How far away from its entrance point does the particle exit : The particle exits the field traveling 180° to its original direction of motion. How far away from its entrance point does the particle exit the field?
Discuss ways you plan to apply procurement management : Discuss Ways you Plan to Apply Procurement Management - Submit a content discussion paper in which you specify that specifies how you intend to apply this newly gained knowledge in the field of project management
Which equipment should axel select : Axel will purchase the equipment that costs the least, as measured by present value. Which equipment should Axel select? Why?
Prepare journal entries to record transactions : Purchased raw materials at a cost of $45,000 and general factory supplies at a cost of $13,000 on account (recorded materials and supplies in the materials account).
What will the speed of the sled be when you reach the top : You are pulling your sister on a sled to the top of a 20.0 m high, frictionless hill with a 10.0o incline. Your sister and the sled have a total mass of 50.0 kg. You pull the sled, starting from rest, with a constant force of 127 N at an angle of 4..
What minimum rotation speed should you reach before dropping : You have been charged with operating "the gravitron" at the carnival. What minimum rotation speed should you reach before dropping the floor?
What is the energy of each photon : Pulsed dye lasers emit light of wavelength 585 nmin 0.450 ms pulses to remove skin blemishes such as birthmarks. The beam is usually focused onto a circular spot 5.00 mm in diameter. Suppose that the output of one such laser is 20.0 W . What is th..

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd