Mississippi river shipyards is considering the replacement

Assignment Help Finance Basics
Reference no: EM13543818

Mississippi River Shipyards is considering the replacement of an 8-year-old riveting machine with a new one that will increase earnings before deprecia- tion from $27,000 to $54,000 per year. The new machine will cost $82,500, and it will have an estimated life of 8 years and no salvage value. The new machine will be depreciated over its 5-year MACRS recovery period; so the applicable depreciation rates are 20%, 32%, 19%, 12%, 11%, and 6%. The applicable corporate tax rate is 40%, and the firm's WACC is 12%. The old machine has been fully depreciated and has no salvage value. Should the old riveting machine be replaced by the new one? Explain your answer.

Reference no: EM13543818

Questions Cloud

What is the average dividend growth rate : 1.) A firm has paid dividends of $1.02, $1.10, $1.25, and $1.35 over the past 4 years, respectively. What is the average dividend growth rate?
Explain direction of the reaction for the chemical reaction : Predict the shift in the direction of the reaction for the following chemical reaction: CH4 + O2 CO2 + H2O. if methane (CH4) is added.
What is the maximum speed of any point on the string : A sinusoidal wave of wavelength 1.94 m and amplitude 0.0584 m travels with a speed of 0.878 m/s on a string. What is the maximum speed of any point on the string
Explain how many liters of water should it take to dissolve : The Ksp of HgS is around 10^-54. How many liters of water should it take to dissolve one molecule of this compound
Mississippi river shipyards is considering the replacement : Mississippi River Shipyards is considering the replacement
What is the torque required to hold the loop : A small coil has a cross section of 4.5 cm2 and consists of 14 turns of wire. If the loop carries a current of 100 mA, what is the torque required to hold the loop
What is the ytm of the competitor bond : What is the YTM of the competitor bond?
Explain equal volumes of two strong acids are mixed : Equal volumes of two strong acids are mixed. The pH of one is 3.80. The pH of the other is 4.80. What is the pH of the mixture
Calculations to 4 decimal places : Calculations  to 4 decimal places. Round your answer to 2 decimal places.)

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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