Determine the incremental rate of return for problem 7

Assignment Help Finance Basics
Reference no: EM131138627

Determine the incremental rate of return for Problem 7. Which track hoe should your company choose?

In Problem 7, your company needs to purchase a new track hoe and has narrowed the selection to two pieces of equipment. The first track hoe costs $100,000 and costs $32.00 per hour to operate. The second track hoe costs $110,000 and costs $27.00 per hour to operate. The operator costs $28.00 per hour. The revenue from either track hoe is $95.00 per hour. Using a useful life of four years, a salvage value equal to 20% of the purchase price, 1,200 billable hours per year, and a MARR of 20%, calculate the NPV for both track hoes. Which track hoe should your company choose?

Reference no: EM131138627

Questions Cloud

What is the minimum number of billable hours each year : Your company has purchased a new excavator for $210,000. The track hoe can be billed out at $180.00 per hour, has an hourly operation cost of $104.00, and has a useful life of six years. At the end of six years the track hoe has a salvage value of $3..
What is the minimum number of billable hours each year : Your company has purchased a new track hoe for $100,000. The track hoe can be billed out at $95.00 per hour, has an hourly operation cost of $33.00, and has a useful life of four years. At the end of four years the track hoe has a salvage value of $2..
Paid innova company in full : Hyzer Disc Golf Course was opened on March 1 by Barry Schultz. The following selected events and transactions occurred during March:
Which track hoe should your company choose : The revenue from either track hoe is $95.00 per hour. Using 1,200 billable hours per year and a MARR of 20%, calculate the NPV for both track hoes. Which track hoe should your company choose?
Determine the incremental rate of return for problem 7 : The revenue from either track hoe is $95.00 per hour. Using a useful life of four years, a salvage value equal to 20% of the purchase price, 1,200 billable hours per year, and a MARR of 20%, calculate the NPV for both track hoes. Which track hoe shou..
Enter the beginning balances in the ledger as of april 1 : Enter the beginning balances in the ledger as of April 1. Insert a check mark (?) in the reference column of the ledger for the beginning balance.
Which investment should your company invest in : Unused funds will be placed in a bank account with an annual percentage rate of 4.5%. You may invest in each of the investments only once. All of the investments have a life of one year. Which investment should your company invest in?
Ou may invest in each of the investments only once. : You may invest in each of the investments only once. All of the investments have a life of one year. Which investment should your company invest in?
Measurement of market risk of a financial institution : 1. What is meant by market risk? 2. Why is the measurement of market risk important to the manager of a financial institution?3. What is meant by daily earnings at risk (DEAR)? What are the three measurable components? What is the price volatility co..

Reviews

Write a Review

Finance Basics Questions & Answers

  Why might a firm''s investors wish to delay

Why might a firm's investors wish to delay receiving cash from the firm?

  Determine will the company accept the project

High-Top, Inc. is considering a four-year project that has an initial after-tax outlay cost of $120,000. The future cash inflows from its project are $25,000, $30,000, $35,000 and $32,000 for years 1, 2, 3 and 4,

  What is the effective cost of borrowing in this case

Your firm has an average collection period of 27 days. Current practice is to factor all receivables immediately at a 1.70 percent discount.

  Youve observed the following returns on crash-n-burn

youve observed the following returns on crash-n-burn computers stock over the past five years 5 percent -13 percent 24

  Use the following information and the dupont identity to

use the following information and the dupont identity to solve for profit margin net income 69000total asset turnover

  Recall that in this course interest rates

Suppose the spot rates for 1 and 2 years are s1=6.3% and s2=6.9% with annual compounding. Recall that in this course interest rates are always quoted on an annual basis unless otherwise specified. What is the discount rate d(0,2)?

  Negligently collided with a large freighter

The Mary Queen, an ocean-going oil tanker, negligently collided with a large freighter. The Mary Queen is insured by an ocean marine hull insurance policy with a running down clause. For each of the following losses, explain whether the ocean mari..

  What are the types of government funds? how are they used

What are the three types of government funds? How are they used

  Meeting of board of directors

Rick is preparing for a meeting of Board of Directors and is compiling notes in preparation. One of the Board of Directors is an Accountant and has been concerned with the Asset Projection that was part of Rick's planning for the growth expansion.

  What is the expected return on rkp

The risk-free rate of return is currently 0.04, whereas the market risk premium is 0.05. If the beta of RKP, Inc., stock is 1.4, then what is the expected return on RKP?

  To establish a fund that will provide a scholarship of 3000

to establish a fund that will provide a scholarship of 3000 per year indefinitely with the first award to occur now

  Which is a better measure of the investment

Calculate the 95% confidence intervals for the expected annual return of four different investments included in Tables 10.3 and 10.4 (the dates are inclusive, so the time period spans 83 years).

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