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One year ago, Caffe Vita Coffee Roasting Co. purchased three small- batch coffee roasters for $3.3 million. Now in 2010, the company finds that new roasters are available that offer significant advantages. The new roasters can be purchased for $4.5 million, and have no sal- vage value. Both the new and the old roasters are expected to last until 2020. Management anticipates that the new roasters will produce a gross margin of $1.2 million a year, so that, using straight-line depre- ciation, the annual taxable income will be $750,000.
The current roasters are expected to produce a gross profit of $600,000 a year and, assuming a total economic life of 11 years and straight-line depreciation, a profit before tax of $300,000. The current market value of the old roasters is $1.5 million. The company's tax rate is 45 percent, and its minimum acceptable rate of return is 10 percent. Ignoring possible taxes on the sale of used equipment and assuming zero salvage values at the end of the roasters' economic lives, should Caffe Vita replace its year-old roasters?
Name two insurance practices that have cause finacial loss to the US
The balance sheet of Tribank starts with an allowance for loan losses of $1.33 million. During the year, TriBank charges off worthless loans of $0.84 million
Which one of the following terms is applied to the financial planning method which uses the projected sales level as the basis for determining changes in balance sheet and income statement account values?
kahn industry inc. decides to add a new machine to its assembly line. the new machine costs 120000 with a useful life
Identify the total addressable market and the initial target market of the Raspberrry Pi Foundation. Why did the company pick that initial target market?
Last year's asset turnover ratio was 2.0. Sales have increased by 25% and average total assets have increased by 10% since that time. What is the current asset turnover ratio? A. 1.82 B. 2.05 C. 2.15 D. 2.27
suppose 1-year t-bills currently yield 5.00 and the futureinflation rate is expected to be constant at 3.10 per year.
which one of the following statements concerning the balance sheet is correct? answer total assets equal total
these items are taken from the financial statements of tilley inc.prepaid insurance 1400equipment31000salaries and
Campbell's marginal tax rate is 30 percent and it cost of capital is 10 percent.
What is the internal rate of return for the two investments? Which investment(s) should the firm make? Is this the same answer you obtained in part a?
This was quick and easy, but it has its shortcomings, and the Earned Value Management process is said to be better.
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