Assuming a discount rate of 14 compute the difference

Assignment Help Accounting Basics

Reference no: EM13577251

The Lansing Community College registrar's office is considering replacing some Canon copiers with faster copiers purchased from Kodak.

The office's 4 Canon machines are expected to last 5 more years. They can each be sold immediately for $800; their resale value in 5 years will be zero. The total cost of the new Kodak equipment will be $114,000; the equipment will have a life of 5 years and a total disposal value at that time of $1,900.

The 4 Canon operators are paid $8.10 an hour each. They work a 39-hour week and 50 weeks a year. The machines break down periodically, resulting in annual repair costs of $960 for each machine. Supplies cost $960 a year for each machine.

The Kodak system will require only 3 regular operators to do the same work. Kodak has offered the college a maintenance contract that covers all machine breakdowns; the cost of the contract is $900 per year. Total cost for all supplies will be $3,240 per year.

Required
Assuming a discount rate of 14%, compute the difference between the net present value if the registrar's office keeps the Canon copiers and the net present value if it buys the Kodak copiers. [Note: If your results favor keeping the Canon copiers, enter your net present value difference as a positive number; if your results favor buying the Kodak copiers, enter your net present value difference as a negative number.]

Reference no: EM13577251

Questions Cloud

Lester enterprises comparative balance sheets included : lester enterprises comparative balance sheets included inventory of 90200 at december 31 2011 and 70600 at december 31

Coose any item that affects the basis of an asset chapter : choose any item that affects the basis of an asset and indicate how it affects the gair or loss recognized on that

Management is considering placing a new hire in an upper : a large manufacturing firm tests job applicants who recently graduated from college. the test scores are normally

Determine the cash flow from operating activities using : the following information pertains to baxter company for 2013beginning inventory 90units

Assuming a discount rate of 14 compute the difference : the lansing community college registrars office is considering replacing some canon copiers with faster copiers

Scenario - john haddock owns 75 percent of haddock : scenario - john haddock owns 75 percent of haddock corporation. the other 25 percent of the stock is held by johns wife

Jefferson company has two divisions jefferson bottles and : jefferson company has two divisions jefferson bottles and jefferson juice. jefferson bottles makes glass containers

For some types of plants when plants with different : q1.a man has blood type b. the mans mother was type ab and his father was type a. if his wife has blood type o and is

While departmental supervisors have been happy with the : several years ago shipley corporation developed a comprehensive budgeting system for profit planning and control

User Account

All Pages