Calculate annual equivalent cost of maintenance facility

Assignment Help Financial Management

Reference no: EM131915687

Company X has been contracting its overhauling work to Company Y for $41,000 per machine per year. Company X estimates that by building a $565,000 maintenance facility with a life of 17 years and a salvage value of $68,000 at the end of its life, it could handle its own overhauling at a cost of only $20,000 per machine per year. What is the minimum annual number of machines (as an integer) that Company X must operate to make it economically feasible to build its own facility? (Assume an interest rate of 11%.) Hint: calculate the annual equivalent cost of the maintenance facility.

Reference no: EM131915687

Questions Cloud

Cost of equity based on dividend growth model : What is Oracle's cost of equity based on the dividend growth model?

Write a matlab script program that evaluates the frequency : Write a Matlab script program that reads in a value of ? and evaluates the frequency response for this value of ? together with its polar form

What else can you add to the given problem : Before conducting an interview, especially based on investigation and fact finding, the investigator should provide a brief introduction and be honest.

Soccer complex for local recreational youth league : Use the $25 million dollars currently set aside for the bike lane project to construct a new soccer complex for the local recreational youth league.

Calculate annual equivalent cost of maintenance facility : Calculate the annual equivalent cost of the maintenance facility.

Environmental issue in canada : Environmental issue in Canada Research in APA format, size 12 double space

Discuss the contractual claims : Nick is the leader of a newly formed political party called ‘the Blue Party'. He organises an open-air rally in Sydney to publicise the party.

Identify the problems the toyota leaders must solve : Identify the problems the Toyota leaders must solve. Analyze the organizational changes that were successful and unsuccessful.

Write a synopsis of the business idea : Write a synopsis of your business idea and the important elements/information that should be included in a well thought out business plan.

User Account

All Pages