X company is considering replacing one of its machines in

Assignment Help Accounting Basics

Reference no: EM13567425

X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $62,000 per year; operating costs with the new machine are expected to be $43,000 per year. The new machine will cost $67,000 and will last for 6 years, at which time it can be sold for $1,000. The current machine will also last for 6 more years but will not be worth anything at that time. It's currently worth $5,000. Assuming a discount rate of 7%, what is the incremental net present value of replacing the current machine with the new machine?

Reference no: EM13567425

Questions Cloud

Assume that the following information was available for guy : assume that the following information was available for guy brown company. how would maria teresa vazquez and the other

Certain industries are subject to peculiar financing and : certain industries are subject to peculiar financing and operating conditions calling for special consideration in

Which of the businesses is most likely to use process : which of the businesses is most likely to use process costing? answer chemical plant architectural firm dentists office

If she gets an mba her salary will be a constant 100000 per : vivian has just graduated from the university of michigan with a bba and must decide whether to start working now or to

X company is considering replacing one of its machines in : x company is considering replacing one of its machines in order to save operating costs. operating costs with the

The rate on 6-month t-bills is 2 and the return on the : atlas corporation wishes to estimate its cost of retained earnings. the firms beta is 1.3. the rate on 6-month t-bills

Laudermilk produces dairy equipment most of its jobs have a : laudermilk produces dairy equipment. most of its jobs have a number of units per job. the company has two different

Clothier inc has a target capital structure of 40 debt and : clothier inc. has a target capital structure of 40 debt and 60 common equity and has a 40 marginal tax rate. if

Write a three to four 3-4 page paper on the relationship : political parties and the electoral processwrite a three to four 3-4 page paper on the relationship between political

User Account

All Pages