Evaluating option of purchasing fork-lift truck costing

Assignment Help Financial Management

Reference no: EM131333784

Bridgewell Industries is evaluating the option of purchasing a fork-lift truck costing $60,000. If purchased, the truck will replace 4 workers, each with an average annual salary of $15,000. However, an experienced fork-lift operator will have to be hired at a salary of $20,000 per year. Fuel and maintenance expense is expected to be $10,000 per year. At the end of its 5-year life, the truck will have a market value of $10,000. Bridgewell uses straight-line depreciation and depreciates the asset to $0, assigns a 10% required rate of return for this type of investment, and has a marginal tax rate of 40%. Should the fork-lift truck be purchased? Please show all of your work

Reference no: EM131333784

Questions Cloud

Illustrate how the company could split profits and losses : ACC 690- Illustrate how the company could split profits and losses. Describe what happens if the partnership doesn't do well and the company has to dissolve it, or one of the partners becomes insolvent.

Modify the algorithm so that it overcomes this problem : This would happen because if there was a space at the end of an input line it would be turned into two spaces in the reformatted output. Modify the algorithm so that it overcomes this problem.

Talk about the drug courts in florida and the process : Talk about the drug courts in Florida and the process. Also about how effective, write facts and numbers. Use 5 reliable sources

Prove the given condition : Suppose that Fara is preferred by every man to all the other women.- Prove that under every stable matching Fara is matched to the same man. Who is the lucky guy?

Evaluating option of purchasing fork-lift truck costing : Bridgewell Industries is evaluating the option of purchasing a fork-lift truck costing $60,000. If purchased, the truck will replace 4 workers, each with an average annual salary of $15,000. However, an experienced fork-lift operator will have to be ..

Briefly describe the situation and sentence : Choose an episode of a television show in which a character is sentenced for a crime. Briefly describe the situation and sentence. If you think the outcome is fair, explain why

What information is or is not required to be reported : What information is or is not required to be reported in the RSI for pension plans under GASB 67? What are 2 similarities or differences between accounting for colleges verses government funds?

Prove the given condition : Suppose that the number of men equals the number of women, and that Vera is last on the preference list of every man.- Prove that under every stable matching, Vera is matched to the same man. Who is the unlucky guy?

Shareholders as annual dividend : Pete’s, Inc. recently paid $4.00 to their shareholders as the annual dividend. The company also announced that future dividends will be increasing at a constant rate of 4.5 percent. If you require a 12.5 percent rate of return, how much are you willi..

User Account

All Pages