Ans 8
Ans is option 2 Machine A ,7406 saving per year.Since cost of Machine B by Equivalent annual annuity method is coming more than Machine A.
My ans is coming to 7382.43 bec of rounding off difference . If we take pvaf in two digits ans will be 7406.
QUESTION 8 Concord Corporation is analyzing two machines to determine which one it should purchase. Whichever...
Pactiv Corp is analyzing two machines to determine which one it should purchase. Whichever machine is purchased will be replaced at the end of its useful life. The company requires a 14 percent rate of return and uses straight-line depreciation to a zero book value over the life of the machine. Machine A has a cost of $415,000, annual operating costs of $28,300, and a 4-year life. Machine B costs $300,000, has annual operating costs of $45,100, and a 3-year...
CCC Conglomerates is analyzing two machines to determine which one it should purchase. Whichever machine is purchased will be replaced at the end of its useful life. The company requires a 12 percent rate of return and uses straight-line depreciation to a zero book value over the life of the machine. Machine A has a cost of $378,000, annual operating costs of $22,000, and a 3-year life. Machine B costs $257,000, has annual operating costs of $43,000, and a 2-year...
1. Precision Tool is analyzing two machines to determine which one it should purchase. The company requires a 15 percent rate of return and uses straight-line depreciation to a zero book value over the life of its equipment. Machine A has an initial cost of $892,000, annual maintenance cost of $28,200, and a 4-year life with a market salvage value of $50,000. Machine B costs $1,118,000 initially, has annual maintenance costs of $19,500, and a 5-year life with a market...
Precision Tool is analyzing two machines to determine which one it should purchase. The company requires a 15 percent rate of return and uses straight-line depreciation to a zero book value over the life of its equipment. Machine A has an initial cost of $892,000, annual maintenance cost of $28,200, and a 4-year life with a market salvage value of $50,000. Machine B costs $1,118,000 initially, has annual maintenance costs of $19,500, and a 5-year life with a market salvage...
Precision Plumbus is analyzing two machines to determine which one it should purchase. The company requires a 15 percent rate of return and uses straight-line depreciation to a zero book value over the life of its equipment. Machine A has a cost of $905,000, annual operating costs of $27,000, and a 4-year life. Machine B costs $1,025,000, has annual operating costs of $20,000, and has a 5-year life. Whichever machine is purchased will be replaced at the end of its...
Precision Plumbus is analyzing two machines to determine which one it should purchase. The company requires a 15 percent rate of return and uses straight-line depreciation to a zero book value over the life of its equipment. Machine A has a cost of $905,000, annual operating costs of $27,000, and a 4-year life. Machine B costs $1,025,000, has annual operating costs of $20,000, and has a 5-year life. Whichever machine is purchased will be replaced at the end of its...
3. Precision Plumbus is analyzing two machines to determine which one it should purchase. The company requires a 15 percent rate of return and uses straight-line depreciation to a zero book value over the life of its equipment. Machine A has a cost of $905,000, annual operating costs of $27,000, and a 4-year life. Machine B costs $1,025,000, has annual operating costs of $20,000, and has a 5-year life. Whichever machine is purchased will be replaced at the end of...
Precision Plumbus is analyzing two machines to determine which one it should purchase. The company requires a 15 percent rate of return and uses straight-line depreciation to a zero book value over the life of its equipment. Machine A has a cost of $905,000, annual operating costs of $27,000, and a 4-year life. Machine B costs $1,025,000, has annual operating costs of $20,000, and has a 5-year life. Whichever machine is purchased will be replaced at the end of its...
A business is analyzing a proposed 5-year project using standard sensitivity analysis. They expects to sell 23,000 units, ±5 percent. The expected variable cost per unit is $21.20 and the expected fixed costs are $150,000. The fixed and variable cost estimates are considered accurate within a ±5 percent range. The sales price is estimated at $35.60 a unit, ±5 percent. The project requires an initial investment of $324,000 for equipment that will be depreciated using the straight-line method to zero...
Graziano Corporation (GC) is considering a project to purchase new equipment. The equipment would be depreciated by the straight-line method over its 3-year life and would have a zero-salvage value. The project requires an investment of $6,000 today on net working capital. Revenues and other operating costs are expected to be constant over the project's 3-year life. However, this project would compete with other company’s products and would reduce its pre-tax annual cash flows of $5,000 per year. The investment...