Which machine should you choose

Assignment Help Finance Basics

Reference no: EM13276066

Comparing Mutually Exclusive Projects [LO4] Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $3,100,000 and will last for six years. Variable costs are 35 percent of sales, and fixed costs are $240,000 per year. Machine B costs $5,300,000 and will last for nine years. Variable costs for this machine are 30 percent of sales and fixed costs are $175,000 per year. The sales for each machine will be $11 million per year. The required return is 10 percent, and the tax rate is 35 percent. Both machines will be depreciated on a straight-line basis. If the company plans to replace the machine when it wears out on a perpetual basis, which machine should you choose?

Reference no: EM13276066

Questions Cloud

Find the maximum possible work function of the cathode : You need to design a photodetector that can respond to the entire range of visible light. find the maximum possible work function of the cathode

What is this firm''s market-to-book ratio : The firm has total debt with a book value of $55 million, but interest rate declines have caused the market value of the debt to increase to $65 million. What is this firm's market-to-book ratio?

Define what is the equilibrium concentration of h2 : 2HI(g) ? H2(g) + I2(g) Keq = 0.016. Initially a container contains 0.46 M HI and no product. What is the equilibrium concentration of H2

Define what is meant by the term carbon sequestration : Identify how the carbon sequestration strategy seeks to fix, or at a minimum, define what is meant by the term carbon sequestration

Which machine should you choose : If the company plans to replace the machine when it wears out on a perpetual basis, which machine should you choose?

What is highest freq input signal that will not be aliased : suppose that A/D-H(z)-D/A system shown uses a sampling rate of 20000 samples/sec , let xa(t)=10cos (2p*500t)u(t) a- give another input signal x1(t) which gives the same samples x(n) b- give another input signal x2(t)

Conduct a hypothesis test to determine if the proportion of : Conduct a hypothesis test to determine if the proportion of business students atBayview University who were involved in some form of cheating is less than thatof nonbusiness students at other institutions as reported by the Chronicle of HigherEducati..

Explain a first order decomposition reaction has a half-life : A first order decomposition reaction has a half-life of 60yr. What percentage of the original amount is left after 164years. (give answer to 3 sig figs using E notation)

What is the speed of the lander : A lunar lander is making its descent to Moon Base I. The lander descends slowly under the retro-thrust of its descent engine. What is the speed of the lander

User Account

All Pages