Produce specialized aluminum products for its customers

Assignment Help Financial Management
Reference no: EM131893290

Automated Manufacturers uses high-tech equipment to produce specialized aluminum products for its customers. Each one of these machines costs $1,480,000 to purchase plus an additional $49,000 a year to operate. The machines have a 6-year life after which they can be sold of 10% of the original cost. The equipment is in the 7 year MACRS group. What is the equivalent annual cost of one these machines if the required return is 16 percent and the company’s marginal tax rate is 30%?

Reference no: EM131893290

Questions Cloud

What is the most one would pay today for firm common stock : If investments of equivalent risk have an expected return of 14%, what is the most one would pay today for the firm’s common stock?
Discuss about combination of copiers rented and daily demand : Given that you rent three copiers, what daily demand for copies will allow you to break even? Draw a break-even graph to show this break-even relationship.
Describe the prospects for the company-the dividend yield : describe the prospects for the company, the dividend yield, EPS for the last year, fir's urrent PE ratio, projected earnings for next year,
How much should you be willing to pay for bond : You are considering a 10-year, $1,000 par value bond. Its coupon rate is 9%, how much should you be willing to pay for the bond?
Produce specialized aluminum products for its customers : Automated Manufacturers uses high-tech equipment to produce specialized aluminum products for its customers.
Produce a topic to sentence outline and thesis statement : Produce a topic to sentence outline and thesis statement. The topic to sentence outline must also be accompanied by a short (no more than 4 lines).
Cause the futures market price at maturity : Explain the key determinants of futures prices and explain the factors that may cause the futures market price at maturity,
Relationship between issuing company and bondholders is : The legal agreement (contract) that governs the relationship between an issuing company and bondholders is a(n)?
What is the total annual inventory cost : Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation.

Reviews

Write a Review

Financial Management Questions & Answers

  Shares of apple stock

The school you would like to attend costs $100,000. To help finance your education, you need to choose whether or not to sell your 1,000 ?shares of Apple stock, 1,000 EE Savings Bonds (with $100 denominations and 4.25% coupon rate) that are five y..

  How much can you withdraw each year in your retirement

You are planning your retirement in 10 years. You currently have $172,000 in a bond account and $612,000 in a stock account. You plan to add $6,800 per year at the end of each of the next 10 years to your bond account. How much can you withdraw each ..

  What are five inputs to any total value of money problem

What are the five inputs to any Total Value of Money (TVM) problem? Discuss the corporate level strategy that Tesla is currently pursuing.

  What is the weighted average cost of capital

Suppose you own two assets with the following payouts. (1) $550 at the end of every year starting 1 year from now. The annual cost of capital for these cash flows is 9%. (2) $350 one year from now and a cash flow that is 2% larger than the prior cash..

  How important is it to adhere to these standards

How important is it to adhere to these standards? Is there any point in time in which you can loosely interpret or manipulate these standards? What is due professional care, and how does it refer to the GAAS?

  The firm can leas equipment-what is the cost of leasing

Waldrop Corporation must install $200 of new equipment in its Ohio plant. It can obtain a bank loan for 100% of the required amount at 6% interest on the loan. Alternatively, the firm can leas the equipment on a 2-year lease, the payment would be $11..

  Experiencing rapid growth-what is stock price

Navel County Choppers Inc. is experiencing rapid growth. If the dividend per share just paid was $1.69, what is the stock price?

  Business risk beta of plagisoftware using hamada model

End User products Inc. is evaluating a project involving a speicalized software. It has established, after a careful study of the software industry, that PlagiSoftware could be used as a "Pure Play" to evaluate the project. What is the levered beta o..

  Finance charges you will pay over the life of the loan

The price of the used car is $23,500. Sales tax on this car is 7% of the price of the vehicle. You intend to finance the entire cost of the car and sales tax, less a down payment of $1,200. You intend to finance the car for 48 months and your car pay..

  About the portfolio beta

An individual has $15,000 invested in a stock with a beta of 0.3 and another $55,000 invested in a stock with a beta of 1.9. If these are the only two investments in her portfolio, what is her portfolio's beta?

  Determine the investors holding period yield

Suppose that a parcel of 10 percent October 2013 Treasury bonds was purchased at 6 per cent on 15 October 2005. The parcel was subsequently sold on 15 April 2008 at a yield of 6.3 per cent. If the coupons were reinvested at 4.5 per cent per annum, de..

  What is the companys pretax cost of debt

Drogo, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 16 years to maturity that is quoted at 107 percent of face value. The issue makes semiannual payments and has an embedded cost of 10 percent annually. Wh..

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