None Angler Corp. did some further research and found one other possible machine that would produce the same type of productionefficiencies. The information regarding Machine C is below:Machine COriginal cost$250,000Estimated life10 yearsSalvage value$30,000Estimated annual cash inflows$45,000Estimated annual cash outflows$10,000Calculate the net present value and profitability index for Machine C. Use an 8% discount rate. (Round present value factorcalculations to 5 decimal places, eg. 1.25124 and the final answer to 2 decimal places e.g. 589.71. Enter negative amounts using either anegative sign preceding the number eg. -45.35 or parentheses eg. (45.35).)Net present value$Profitability index

Step 1: Compute the net cash flow Estimated annual cash inflows 45,000 Estimated annual cash…

Answered: Angler Corp. did some further research…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Crane Corp. did some further research and found one other possible machine that would produce the same type of production efficiencies. The information regarding Machine C is below: Machine C Original cost $250,200 Estimated life 10 years Salvage value $30,200 Estimated annual cash inflows $45,100 Estimated annual cash outflows $10,100 Calculate the net present value and profitability index for Machine C. Use an 8% discount rate.
The top management required you to compute the accumulated amount of the machine that will improve the production efficiency based on your recommendation. The money is to be loaned to BPI @ 10% interest rate compounded mounthy. A) Purchase Price = P200,000. B) Period of Payment = 5 years.
A manufacturer of automated optical inspection devices is deciding on a project to increase the productivity of the manufacturing processes. The estimated costs for the two feasible alternatives being compared are shown below. Use the internal rate of return (IRR) method to determine which alternative should be selected if the analysis period is 8 years and the company's MARR is 4% per year. Alternative M N Initial costs $30,000 $45,000 Net annual cash flow $4,500 $7,000 Life in years 8 8 (a) IRR of base alternative = (b) IRR of incremental cash flow = (c) Choose Alternative
Your boss has told you to evaluate the cost of two machines.After some questioning, you are assured that they have thecosts shown at the right. Assume:a) The life of each machine is 3 years.b) The company thinks it knows how to make 14% oninvestments no riskier than this one.Determine via the present value method which machine topurchase. MACHINE A MACHINE BOriginal cost $13,000 $20,000Labor cost per year 2,000 3,000Floor space per year 500 600Energy (electricity) per year 1,000 900Maintenance per year 2,500 500Total annual cost $ 6,000 $ 5,000Salvage value $ 2,000 $ 7,000
Please use Excel to solve the assignment and submit as an excel spreadsheet. Biolnov could lunch two new products onto the market. The expected cash flows and investments are represented in the table below. Assume that the required return in either investment is 6%. Year Nano Tests Micro Kits Initial Investment -$11,000 -$11,000 $4,000 $4,000 $4,000 $4,000 Year 1 $2,000 $3,000 $4,000 $5,000 Year 2 Year 3 Year 4 Year 5 $6,000 $4,000 1. Compute the payback period for each project. If the company requires at most three years to recover the initial investment, should we accept either or both projects? 2. Compute the discounted payback period for each project. If the company requires at most three years to recover the initial investment, should we accept either or both projects? 3. Compute the NP for each project. Should we accept either or both projects? 4. Compute the IRR for each project. Should we accept either or both projects? 5. If the projects are mutually exclusive (the company can…
Two alternative machines will produce the same product, but one is capable of higher-quality work, which can be expected to return greater revenue. The following are relevant data. Determine which is the better alternative, assuming repeatability and using SL depreciation, an income-tax rate of 27%, and an after-tax MARR of 11%. Capital investment Life Calculate the AW value for the Machine A. Machine A $23,000 12 years $4,000 Terminal BV (and MV) Annual receipts Annual expenses Click the icon to view the interest and annuity table for discrete compounding when the MARR is 11%er year. AWA (11%) = $ (Round to the nearest dollar.) Machine B $33,000 6 years $1,500 $197,000 $176,000 $152,000 $130,000
The two machines shown are being considered for a chip manufacturing operation. Assume the MARR is a real return of 12% per year and that the inflation rate is 7% per year. Which machine should be selected on the basis of an annual worth analysis if the estimates are in (a) constant-value dollars, and (b) future dollars? Solve by hand and using a spreadsheet. Machine A B First cost, $ −150,000 −1,025,000 M&O, $ per year −70,000 −5,000 Salvage value, $ 40,000 200,000 Life, years 5 ∞
Find the expected EUAW from the financial data provided in the table for new equipment. Because of the uncertainty of technology being used in this equipment, it has not been possible to get the initial cost accurately. The annual benefit, however, is estimated to be $25,000 with a possible equipment life of 5 years. The salvage value is expected to be 10% of the initial cost. MARR = 8%. First Cost, $ $60,000 $80,000 $100,000 $120,000 Probability 0.25 0.35 0.30 0.10 Choices: A. $3957 B. $2977 C. $4628 D. $5157 Determine the associated risk measure in this equipment investmest in terms of standard deviation. A. $6,123 B. $4437.80 C. $8,523 D. $4,923
Two altemnative machines will produce the same product, but one is capable of higher-quality work, which can be expected to return greater revenue. The following are relevant data. Determine which is the better alternative, assuming repeatability and using SL depreciation, an income-tax rate of 25%, and an after-tax MARR of 10%. Capital investment Life Machine A $20,000 12 years $3,500 Calculate the AW value for the Machine A. AWA (10%) = $(Round to the nearest dollar.) Terminal BV (and MV) Annual receipts Annual expenses Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. Machine B $34,000 9 years $2,000 $144,000 $142,000 $190,000 $163,000
Two types of continuous production are being considered for a shoe factory, which has the following cash flows: Production “X” Productión “Z” Inicial cost ($) 62,850 77,632 Annual Cost-Operation ($) 15,300 22,900 Rescue value ($) 8,125 17,953 Useful life (Years) 4 6 Using an interest rate of 25% per year. Do a present value analysis using the MCM and select the most suitable type of production. Evidence your process.
Coore Manufacturing has the following two possible projects. The required return is 10 percent. Project Y -$ 27,900 13,900 Project Z -$ 59,000 17,500 12,300 30,000 14,700 10,300 Year 0 1 2 3 4 15,500 28,000 a. What is the profitability index for each project? Note: Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 3- b. What is the NPV for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 3. c. Which, if either, of the projects should the company accept? a. Project Y Project Z b. Project Y Project Z c. Accept project
Yıldız Processing Technologies Company wants to buy lathe in order to meet their increasing production needs. As a result of the studies, the data in the table below were found. Based on these data, what will be future value (FV) of the annual operating expense of alternative A? For Alternative A; Purchase Cost= 10000 Annual Operating Expense= 3000 Scrap Value= 2000 Economic Life= 4 Capital Cost = 10%

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