Manufacturing equipment for operations

Assignment Help Business Economics
Reference no: EM131810418

VML Industries has need of specialized yarn manufacturing equipment for operations over the next 3 years. The firm could buy the machinery for $95,000 and depreciate it using MACRS. Annual maintenance would be $7500, and it would have a salvage value of $25,000 after 3 years. Another alternative would be to lease the same machine for $45,000 per year on an "all costs" inclusive lease (maintenance costs included in lease payment). These lease payments are due at the beginning of each year. VML Industries uses an after-tax MARR of 18% and a combined tax rate of 40%. Do an after-tax present worth analysis to determine which option is preferred.

Reference no: EM131810418

Questions Cloud

Discuss the objective of using probability proportional : Determine the correct expansion factor. Determine the sample size you should use.
How should the transaction price be allocated : How should the transaction price be allocated to the equipment, installation, and training?
Breakeven rate of return of purchase versus lease : (a) If the company uses the after-tax minimum attractive rate of return of 10%, should it lease or purchase the plant?
Review historical financial statements : Review Historical Financial Statements (CSRE 2400) and an Auditor Review of Interim Financial Statements (7060).
Manufacturing equipment for operations : VML Industries has need of specialized yarn manufacturing equipment for operations over the next 3 years
Discuss the cost categories that would be included : Identify and discuss the cost categories that would be included in the cost of the product for ?nancial reporting purposes.
What is the tax status of each of the following items : Fun, Inc. is a calendar-year accrual basis taxpayer. what is the tax status of each of the following items for the company's current year?
Firm after-tax interest rate : If the firm's after-tax interest rate is 9%, which alternative has the lower EAC and by how much?
Prepare a multistep income statement for andrew company : Include an EPS section separating Income from operations and discontinued operations

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

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