Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Your boss is trying to figure out when to replace an important piece of machinery in your main production facility. The Siemens NR550, costs $5.45 million brand new and generally lasts about 15 years before needing to be replaced (CCA Rate = 15%). The currently installed version was put in place 5 years ago. Since the product being produced will be obsolete in 10 years, management had not planned on replacing the NR550 (though the asset pool would remain open as a number of other projects are underway which involve similar systems). The salvage value on the NR550 today would be $2.5 million, or $1.5 million in year 10.
Last week, Siemens offered an upgrade to the current system, the NR600, which will cost $5 million and do the same job as the NR550 for the remaining life of the production facility. At the moment, the NR600 is brand new so its price is higher than it is expected to be in the future but the annual cost savings would be substantial. If installed, the NR600 is expected to reduce operating costs in the production facility by $1,200,000, pre-tax, every year. Its CCA rate is 15% and its salvage value is expected to be $535,000. Your firm's cost of capital is estimated at 14% and its tax rate is 30%
Should the NR550 be replaced?
(Hint: to correctly value the remaining CCA tax shield for the NR550, use the remaining UCC of $2,631,564 instead of its purchase price and ignore the half-year rule as these tax shields have already been used.)
a) Put options on Chicken King with a strike price of $42.50 and 2 months to maturity are properly priced to sell for $3.68 (no bid-ask spread). Call options with the same stri
a) Describe what you understand by corporate identity in marketing. b) Show how corporate identity is normally visibly manifested. c) Management has delegated you the role o
I need help in Logit using Stata I am very new in that and my supervisor wants me to use panel data ... which model is best for me and why? no idea could you help me...
From a Corporate Finance and Governance perspective, the assignment is about answering three fundamental questions: 1. How much value does the organisation create/destroy today?
A? The effect of incorrect recognition of revenue on financial reportssk question #Minimum 100 words accepted#
Many ERP vendors have developed strategies to make their software available to small to medium enterprises (SME's). These strategies have focused around pre-configured solutions, i
Differences btn debt finance and preferance share capital
As the company''''s sales and earnings increased, so did the demand for capital. The firm''''s needs included inventory as well as additional space to house the inventory, computer
short term financial planning case study
Corporate restructuring Corporate restructuring entails any fundamental change in a company's business or financial structure, developed to raise the company's value to shareho
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd