Considering the purchase of earth-moving equipment

Assignment Help Financial Management
Reference no: EM131552644

A land development company is considering the purchase of earth-moving equipment. The equipment will have a first cost of S190,000 and a salvage value of ST0000 when the company sells it in 10 years. A service contract for maintenance on the equipment will cost S40000 per year. The operating cost is expected to be s260 per day. Alternatively, the company can rent the necessary equipment for si 100 per day and hire a driver at S180 per day, lf the company's order MARR is 10% per year, how many days per year must the company need the equipment m to justify its purchase?

NB: Homework is Optional

Reference no: EM131552644

Questions Cloud

Identify a state health policy and the tools : Which would be the most appropriate researchable population for use in your research project?
What would be the fractional increase in the droplet mass : Suppose the charge on a 1-µm radius droplet increased by 3e because it picked up three nitrogen ions.
Write program that performs sort by using binary search tree : Design, write and test a program that performs a sort by using a binary search tree. The GUI must be generated by code that you write.
What is the maximum speed to which they can be accelerated : A cyclotron (Fig.) is an apparatus for accelerating charged particles to very high kinetic energies. Rapidly moving charged particles are coaxed into circular.
Considering the purchase of earth-moving equipment : A land development company is considering the purchase of earth-moving equipment.
Describe the meaning of dual diagnosis : Describe the meaning of dual diagnosis and how it impacts counseling.Classify Gregory's primary and secondary diagnoses.
Periodically raise long term capital pay for capital project : Financial managers must periodically raise long term capital (funding) to pay for capital projects.
Determine the maximum required rate of return : Determine the maximum required rate of return that the firm can have and still accept the asset.
Consider strategies that could be used to strengthen study : Consider strategies that could be used to strengthen the study's internal validity and how this would impact the three other types of validity.

Reviews

Write a Review

Financial Management Questions & Answers

  Mortgage loan to buy the home

You decide to take out a 30-year mortgage loan to buy the home of your dreams. The home purchase price is $1,000,000. You manage to scrape together a $200,000 down payment and plan to borrow the balance of the purchase price. If you sell your house i..

  George bought european put option contract

George bought a European put option contract in UWY stock from Julie with a striking price of $34.68 per share. He paid $0.67 per share for this option contract. The size of the contract was 100 shares. Suppose the market price of UWY stock was $32.8..

  Degree of sensitivity of project to single variable rises

As the degree of sensitivity of a project to a single variable rises, the:

  At what price would you get a margin call

The initial margin requirement is $3,375 and the maintenance margin requirement is $2,500. Suppose that you bought a contract at $27.42, putting up the initial margin. At what price would you get a margin call?

  How much will you pay for the companys stock today

Caan Corporation will pay a $3.22 per share dividend next year. The company pledges to increase its dividend by 6 percent per year indefinitely. If you require a return of 11 percent on your investment, how much will you pay for the company’s stock t..

  Explain potential obstacles associated with entering china

Why might the overall risk of JC Penney decrease or increase as a result of its recent global expansion? JC Penney has been more cautious about entering China. Explain the potential obstacles associated with entering China.

  Break-even analysis perform break-even analysis

BREAK-EVEN ANALYSIS Perform a break-even analysis for the following scenario. Assume you sell widgets. You have total fixed costs of $12,000. Your manufacturing and shipping of widgets costs $7 per widget. You sell each widget for $22. What is your b..

  What is aftertax cash flow from the sale of this asset

If the relevant tax rate is 27 percent, what is the aftertax cash flow from the sale of this asset?

  What is the payback period of the ice cream cart

It will cost $4,100 to acquire a small ice cream cart. Cart sales are expected to be $3,300 a year for five years. After the five years, the cart is expected to be worthless as that is the expected remaining life of the cooling system. What is the pa..

  The yield on corporate bond

The yield on a corporate bond is 9%, and it is currently selling at par. The marginal tax rate is 30%. A par value municipal bond with a coupon rate of 5.75% is available. Which provides a better return to the investor?

  How is relevant costing used in decision making

How is relevant costing used in decision making? What would the relevant costs be in deciding whether to discontinue a segment of business? What would the relevant costs be in deciding how to optimize use of a constrained resource?

  Is this coupon bond properly priced

A 7% annual coupon bond (face value $1,000), with three years left till maturity is selling for $986.90. Is this coupon bond properly priced?

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