Calculate the annual worth of the investment

Assignment Help Finance Basics
Reference no: EM131941313

Question: An automobile-manufacturing company is considering purchasing an industrial robot to do spot welding, which is currently done by skilled labour. The initial cost of the robot is $218,780, and the annual labour savings are projected to be $90,827. The robot is a Class 43 property with a CCA rate of 30%. The robot will be used for seven years, at the end of which the firm expects to sell it for $28,144. The company's marginal tax rate is 35% and the after-tax MARR is 10%. Calculate the annual worth of this investment.

Reference no: EM131941313

Questions Cloud

What are the firm roe and roic : Baker Industries' net income is $26,000, its interest expense is $6,000, and its tax rate is 40%. Its notes payable equals $27,000.
What will one share of b and k common stock be : B&K Enterprises will pay an annual dividend of $2.10 a share on its common stock next year. Last week, the company paid a dividend of $2.00 a share.
Why do auditors have to consider the internal controls : Why do auditors have to consider the internal controls of the organization? What are some key elements of internal control? Which are the most important?
Describe the general types of subsequent events : Auditors must be concerned with events that occur subsequent to the balance sheet date, because the events may need to be reflected in the financial statements.
Calculate the annual worth of the investment : An automobile-manufacturing company is considering purchasing an industrial robot to do spot welding, which is currently done by skilled labour.
Discuss the given statements : On average, for the period 1926 through 2012: intermediate-term government bonds have produced higher returns than long-term government bonds.
What types of investigative techniques might you use : What types of investigative techniques might you use? Explain. How would the preparation of a vulnerability chart assist you in planning the investigation?
Find the receipt showing the cost basis of industrial oven : During an audit of ABC company an IRS agent could not find the receipt showing the cost basis of an industrial oven.
From what country should you buy ethanol : The spot US-CA exchange rate is $0.90USD and the CA-MX exchange rate is 16?. From what country should you buy your ethanol and how much can you afford to buy?

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the aftertax cost of debt

A bond issue sells for $950. The coupon rate is 8%, the bond matures in 18 years, and interest is paid semi-annually. The tax rate is 35%. What is the aftertax cost of debt?

  Explaining parent-subsidiary relationship between companies

Parent-Subsidiary relationship between companies develops when one company owns greater than 50% of another company voting stock.

  Company sold merchandise to a foreign customer

On November 1, 2011, Ambrose Company sold merchandise to a foreign customer for 100,000 FCUs with payment to be received on April 30, 2012. At the date of sale, Ambrose entered into a six-month forward contract to sell 100,000 LCUs.

  Calculate ending inventory under lower-of-cost-or-market

Home Furnishings reports inventory using the lower-of-cost-or-market method. Below is information related to its year-end inventory.

  Should the firm undertake this project

If the tax rate is 35% and XYZ uses a capital structure of 30% debt and 70% equity. Should the firm undertake this project?

  Instructions a assuming that the percentage-of-completion

in 2012 gurney construction company agreed to construct an apartment building at a price of 1200000. the information

  Ecognize the brand name as well as the probability

A brand name has a recognition rate of 90%. If the owner of the brand wants to verify this with a small sample of 10 randomly selected consumers find the probability that 9 of the 10 consumers recognize the brand name as well as the probability that ..

  Computation of value of cost of loan from bank

Computation of value of cost of loan from bank and a bank account that pays 5% per year (EAR) for three years

  What was the return on the higher bond

Corresponding figures for france were 1.8% and 2.6%. Which bond earned the higher us dollar return? what was the return on the higher bond?

  Well-known financial writer andrew tobias argues that he

well-known financial writer andrew tobias argues that he can earn 177 percent per year buying wine by the case.

  Long term financial management decisions

Superior Manufacturing is thinking of launching a new product.  The company expects to sell $950,000 of the new product in the first year and $1,500,000 each year thereafter.

  Coffeecarts has a cost of equity of 15 has an effective

coffeecarts has a cost of equity of 15 has an effective cost of debt of 4 and is financed 70 with equity and 30 with

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