Calculate the eac for both conveyor belt systems

Assignment Help Financial Management
Reference no: EM13885287

Lang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System A costs $204,000, has a four-year life, and requires $66,000 in pretax annual operating costs. System B costs $288,000, has a six-year life, and requires $60,000 in pretax annual operating costs. Suppose LISC always needs a conveyor belt system; when one wears out, it must be replaced. Assume the tax rate is 35 percent and the discount rate is 10 percent. Calculate the EAC for both conveyor belt systems. (Negative amounts should be indicated by a minus sign.

Do not round intermediate calculations and round your answers to 2 decimal places. (e.g., 32.16))

                EAC

System A             $  

System B             $ 

Reference no: EM13885287

Questions Cloud

Discussion focuses on mass communications-advertising : This Discussion focuses on mass communications, advertising, sales promotions, and public relations. Select one article that applies to mass communications, advertising, sales promotions, or public relations. Keep in mind, when responding to each uni..
Continually receiving capital funding requests : The CFO of Edward's Food Distributors is continually receiving capital funding requests from its division managers. These requests are seeking funding for positive net present value projects. The CFO continues to deny all funding requests due to the ..
What is the equivalent annual cost of each light bulb : Compact fluorescent lamps (CFLs) have become more popular in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $0.43 and lasts 1,000 hours.  If you require a 10 percent return and use a light fixt..
What is the net income under the worst-case scenario : Wilson’s Market is reviewing a project with sales of 6,200 units plus or minus 2 percent at a sales price of $29 plus or minus 1 percent per unit. The expected variable cost per unit is $11 plus or minus 3 percent and the expected fixed costs are $87..
Calculate the eac for both conveyor belt systems : Lang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System A costs $204,000, has a four-year life, and requires $66,000 in pretax annual operating costs.  Calculate the EAC for both conveyor belt sy..
What was the true annualized return : You buy a stock for $20. After a year the price rises to $25 but falls back to $20 at the end of the second year. What was the average percentage return and what was the true annualized return?
The contribution margin per unit is equal : The contribution margin per unit is equal to the:
Expected to pay the dividends : Lohn Corporation is expected to pay the following dividends over the next four years: $20, $16, $15, and $8.50. Afterward, the company pledges to maintain a constant 5 percent growth rate in dividends forever. If the required return on the stock is 1..
Approximate cost of giving up cash discount from supplier : Prairie Manufacturing has four possible suppliers, all of which offer different credit terms. Except for the differences in credit terms, their products and services are virtually identical. Calculate the approximate cost of giving up the cash discou..

Reviews

Write a Review

 

Financial Management Questions & Answers

  Commodity price changes and labor costs

An example of diversifiable risk that a financial manager should ignore when analyzing a project's risk would include: Commodity price changes, Labor costs, Overall stock price fluctuations

  Estimate the current value of stock using same assumptions

Marge Inovera is trying to value the stock of Hot Tub Time Machines, Limited (HTTM). To easily see how a change in one or more of her assumptions affects the estimated value of the stock, she is using a spreadsheet model. The model has projections fo..

  Risk premium of a security is determined

The risk premium of a security is determined by its __________ risk and does not depend on its __________risk.

  Statements about term structure

Which of the following statements about term structure is(are) most correct?

  Compute volume of admissions required for nursing home

A nursing home presents the following revenue and expense information – Number of admissions: 8,000 Average Revenue per admission: 10,000 Variable Cost per admission: 2,000 Given that the nursing home's fixed costs are $40 million: What is the nursin..

  Firms might window dress in order to make their segments

Firms might window dress in order to make their segments. balance sheets report book values of assists. an increase in dividends would cause AFN to decrease. depreciation is a source of funds

  About the financial leases

About the Financial Leases

  Based manufacturer of industrial equipment

Bobcat Company, US-based manufacturer of industrial equipment, just purchased a Korean company that produces plastic nuts and bolts for heaby equipment. Bobcat can invest at the rates given above or borrow at 2% per annum above those rates. Bobcat's ..

  Write a paper of approximately 500 words that answers these

find three different magazine or newspaper publications from nations in emerging markets. review the advertisements in

  Suppose powers ltd. just issued a dividend

Suppose Powers Ltd. just issued a dividend of $2.57 per share on its common stock. The company paid dividends of $2.07, $2.14, $2.31, and $2.41 per share in the last four years.

  Calculate the net income for the firm

A firm reported an ROE of 19 percent. The firm's debt ratio was 45 percent, sales were $12 million, and the capital intensity ratio was 1.1 times. Calculate the net income for the firm.

  Differences between deterministic and probabilistic models

Provide examples of decision problems you face frequently under the four different states of the decision environment. What are the primary differences between deterministic and probabilistic models?

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd