Mercer corporation is considering replacing a

Assignment Help Finance Basics
Reference no: EM13567134

Mercer Corporation is considering replacing a technologically obsolete machine with a new state-of-the-art numerically controlled machine. The new machine would cost $250,000 and would have a ten-year useful  life. Unfortunately, the new machine would have no salvage value. The new machine would cost $12,000 per year to operate and maintain, but would save $55,000 per year  in labor and other costs. The old machine can be sold now for scrap for $10,000. The simple rate of return on the new machine is closest to:

A) 17.9%

B) 7.5%

C) 22.0%

D) 7.2%

Reference no: EM13567134

Questions Cloud

Excel company has costs of 100000 up to split off at split : excel company has costs of 100000 up to split off. at split off it has 1000 units of product a and 2000 units of
At the beginning of the year kyla inc estimated that : at the beginning of the year kyla inc. estimated that overhead would be 880000 and direct labor hours would be 220000.
Company owner abel terrio has reviewed the 2011 financial : company owner abel terrio has reviewed the 2011 financial statements you prepared for jackson company as the accountant
Should roi be the only gauge a company uses to evaluate : should roi be the only gauge a company uses to evaluate investments? also is it wise for a company to lose money on one
Mercer corporation is considering replacing a : mercer corporation is considering replacing a technologically obsolete machine with a new state-of-the-art
At the end of may 1300 pairs of shoes were in ending : winners inc. manufactures womens boating shoes. manufacturing overhead is assigned to production on a machine-hour
Te project would provide net operating income each year : harrison company is studying a project thatnbsp would have an eight-year life and would require a 300000 investment in
Connor company produces speaker systems for cars estimated : connor company produces speaker systems for cars. estimated sales in units in january are 40000 in february 37000 and
Activity cost pool activity rate opening accounts per : asked on february 21 2013 want an answer?the operations vice president of first bank of eagle kristin wu has been

Reviews

Write a Review

Finance Basics Questions & Answers

  Tmmie harris is considering an investment that pays 65

1.present value tommie harris is considering an investment that pays 6.5 percent annually. how much must he invest

  Determine the yearly dividend per share to be paid

A small, regular dividend of $0.50 per share plus a year-end extra when the profits in any year exceed $1,500,000. The year-end extra dividend will equal 50 percent of profits exceeding $1,500,000.

  Compute the return on assets for the bellagio segment for

mirage resorts inc. recently completed construction of bellagio hotel and casino in las vegas. total cost of this

  Explain salvage value and useful life

Explain Salvage Value and Useful Life and use an incremental rate of return analysis to determine which option the engineer should select

  What is the present value

An investment will pay you $58,000 in seven years. The appropriate discount rate is 10 percent compounded daily.

  The truck has a 9600 fmv when it is transferred to her

irene owns a truck costing 15000 and used for personal activities. the truck has a 9600 fmv when it is transferred to

  What should be the price of baldwin stock today

Baldwin Corp. just paid a dividend of $2.00. Over the next two years this dividend is expected to grow by 20% per year. After two years, dividend growth is expected to level off at 10%. If the required rate of return on Baldwin stock is 12%, what ..

  How many months will it take to pay off outstanding balance

If Cameron makes no new charges on the credit card while making only the mininum monthly payment.

  Prepare budget

Required: Prepare the following for Iguana Inc., for the second quarter (April, May, and June). Include each month as well as the qurter 2 total for each budget.

  Test your ability to apply the concepts and techniques

The following questions are designed to test your ability to apply the concepts and techniques covered in the course. Answer them as fully as possible, identifying each by number. Each answer should be 3-4 pages in length.

  Bonnie paid 9500 for corporate bonds that have a par value

bonnie paid 9500 for corporate bonds that have a par value of 12000 and a coupon rate of 9 percent payable annually.

  The capital structure theory

A business with no debt financing has the firm value of $20 million. It has a corporate marginal tax rate of 34%. The firm's investors are estimated to have marginal tax rates of 31% on interest income and weighted average of 28% on stock income.

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