Explain what is the equivalent annual cost of the washer

Assignment Help Financial Management

Reference no: EM13214766

Bottoms Up Diaper Service is considering the purchase of a new industrial washer. It can purchase the washer for $13,650 and sell its old washer for $9,650. The new washer will last for 7 years and save $2,450 a year in expenses. The opportunity cost of capital is 15%, and the firm's tax rate is 30%. What is the equivalent annual cost of the washer, if the firm uses straight-line depreciation? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Reference no: EM13214766

Questions Cloud

How much must it pay for each hour it uses its capital : If the George Firm is minimizing costs, its RTS is 1.5, and it pays its workers $30 per hour, how much must it pay for each hour it uses its capital?

What are the shareholders trying to accomplish : Anaconda Ltd. has substantial earnings and profits and appreciated assets. It adopts a plan of complete liquidation and distributes its assets to its shareholders. Soon thereafter, the shareholders transfer the assets to a new corporation

Graph the two-period budget constraint for consumption : The government modifies the consumption tax somewhat so that the first $20k of consumption in each period is tax free. Now graph the budget constraint.

What was amount of gain or loss on retirement of bonds : The bonds were dated January 1, 20011. Interest is paid semiannually on January 1 and July 1. On April 1, Hanson purchased 1/2 of the bonds on the open market at 99 plus accrued interest and canceled them.

Explain what is the equivalent annual cost of the washer : What is the equivalent annual cost of the washer, if the firm uses straight-line depreciation? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Describe the levels of uncertainty : Describe the levels of uncertainty and complexity for the project and determine what the project manager should communicate to the customers about the project unknowns.

Prepare statement of cash flows for metagrobolize industries : Comparative balance sheets for 2013 and 2012 and a statement of income for 2013 are given below for Metagrobolize Industries. Additional information from Metagrobolize's accounting records is provided also. METAGROBOLIZE INDUSTRIES

Explain what is the future value of investment cash flows : If the appropriate interest rate is 8.16 percent, what is the future value of these investment cash flows six years from today?

Determine whether the good was an elastic or inelastic good : If you were to be a retailer, would you want to sell elastic or inelastic goods? State your reasons in your answer.

User Account

All Pages