User Account

All Pages

Which options is the better option and by how? much

Assignment Help Accounting Basics
Reference no: EM132731267

Question - Stensels, a plastics? processor, is considering the purchase of a high-speed extruder as one option. The new extruder would cost? $50,000 and would have a residual value of? $5,000 at the end of its 8 year life. The annual operating expenses of the new extruder would be? $8,000. The other option that Stensels has is to rebuild its existing extruder. The rebuilding would require an investment of? $30,000 and would extend the life of the existing extruder by 8 years. The existing extruder has annual operating costs of? $11,000 per year and does not have a residual value. The existing operating costs will not change with the rebuidling. ?Stensels' discount rate is? 14%. Using net present value? analysis, which one of the following options is the better option and by how? much?

Reference no: EM132731267

Questions Cloud

What are the usages of scenario analysis : What are the usages of scenario analysis? (risk identification tool) and how does a company implement the scenario analysis in real-life practice?
Calculate the dollar interest-sensitive gap : Securities maturing in 6 months 5,000,000 Federal funds purchased 500,000. Calculate the dollar interest-sensitive gap
What connections did you make that seemed interesting : For the final reflection paper, we want you to review the Discussions and Reflection Papers you've created throughout the semester. Pretend that you have.
How would you explain safety culture : In your own words, how would you explain Safety Culture and what are its characteristics? Include an example of an action taken by management that significantly
Which options is the better option and by how? much : ?Stensels' discount rate is? 14%. Using net present value? analysis, which one of the following options is the better option and by how? much
How has the course changed your perspective : This discussion topic is to be reflective and will be using your own words and not a compilation of direct citations from other papers or sources.
Why do you need to learn the software development : As a business analyst, why do you need to learn the software development methodology used in a project?
Calculating the required return : Ignore income tax effects when calculating required return (i.e., do not take the after-tax cost of debt). Use current interest rates as a proxy for bond yield
Compute what the balance of accounts receivable is : Accounts Receivable - $24,000 ?(debit). Five Star Services uses the direct write-off method. At the end of? January, the balance of Accounts Receivable is

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