Which plant should the company choose

Assignment Help Finance Basics
Reference no: EM13302464

PB International Company is trying to decide between two different plant systems. Plant 1 $360,000 has a 4-year life and requires $105,000 in pretax annual operating costs. Plant 2 costs $480,000, has a 6-year life and requires $65,000 in pre-tax annual operating costs. Both plants are to be depreciated straight-line to zero over their lives and will have zero salvage value. Whichever plant is chosen, it will not be replaced when it wears out. If the tax rate is 34% and the discount rate is 11%, which plant should the company choose?

Reference no: EM13302464

Questions Cloud

Determine the amount of moisture removed from the air : Moist air at standard conditions is at a dry bulb temperature of 80 degree F and a relative humidity of 50%. It is cooled to 50 degree F. Use the psychromtric chart to determine: a- The energy removed from the air after it is cooled in BTU/lb of d..
Molecule of dna to a protein : Describe the steps involved in going from a molecule of DNA to a protein.
Determine the pressure drop across the aorta of the dog : If the cardiac output of a small dog is 4.05 x 10-3 m3/s, the radius of its aorta is 0.516 cm, determine the pressure drop across the aorta of the dog
What is the wavelength of the em waves emitted by the wiring : The currents in household wiring and power lines alternate at a frequency of 60.0 Hz. What is the wavelength of the EM waves emitted by the wiring
Which plant should the company choose : Whichever plant is chosen, it will not be replaced when it wears out. If the tax rate is 34% and the discount rate is 11%, which plant should the company choose?
Fail-safe system : Mother Nature uses a "fail-safe system" to prevent inappropriate activation of the immune system. Provide several examples of this strategy.
Advertising problem : Advertising
What type of industries would make most use of short-range : What type of industries would make the most use of short-range, medium-range, and long-range forecasts?
Calculate the difference in the angle of refraction : Sunlight strikes a piece of crown glass at an angle of incidence of 30.0 degrees. Calculate the difference in the angle of refraction between a red (660.0 nm) and a blue (470.0 nm) ray

Reviews

Write a Review

Finance Basics Questions & Answers

  Discuss the importance of cash on hand and how it affects

Discuss the importance of cash on hand and how it affects the strength of the business. Would you agree that the amount of cash on hand is a factor when comparing like businesses?

  What is the percentage up movement

Use a two-step tree to value a six-month European call option and a six-month European put option. In both cases the strike price is $150.

  What are the explanations for ipo being underpriced

What are the explanations for IPO's being underpriced, since one of the characteristics is that they tend to be underpriced.

  At what price will the bonds sell in the marketplace

Investors buying the bonds today will earn a yield to maturity of 11.02 percent. At what price will the bonds sell in the marketplace?

  How much will your annual payment be

The interest rate is 10% for the first 15 years of the mortgage but then increases to 15% for the last 15 years. How much will your annual payment be?

  Calculate the dollar value of australian consumer surplus

Calculate the dollar value of Australian consumer surplus and producer surplus. Price of TV???s Quantity Demanded Quantity Supplied $500 0 50 $400 10 40 $300 20 30 $200 30 20 $100 40 10 0 50 0

  Compute the value of the retirement plan

Compute the annual payment she would receive over the next 40 years if the wealth was converted to an annuity payment at 8 percent.

  Calculating debt ratio

The Altman Corporation has a debt ratio of 33.33%, and it needs to raise $100,000 to expand. Management feels that optimal debt ratio would be 16.67%.

  Time value of money-inflation-frequecy of compounding

Why does money have a time value? Does inflation have anything to do with making a dollar today worth more than a dollar tomorrow?

  Explain the funding method for social security payroll tax

Explain the funding method for social security's payroll tax. Disuss the possibility for tax shifting (or tax incidence) between an employer and an employee. Give reasons why or why not tax shifting would occur, with social security's payroll tax.

  Determining accuray ipo

Provide a brief description of Accuray, its main business and operational activities and a short synopsis of the main developments of the company over the past 5 few years.

  Consumption allowances actually increase by 10 percent

Assume that some of the data provided in problem 1 change next year. Specifi cally, government expenditures increase by 10 percent; gross private domestic investment declines by 10 percent; and imports of goods and services drop to $6 billion.

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