Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Question:
Trasky Company is trying to decide whether it should purchase or lease a new automated machine to be used in the production of a new product. If purchased, the new machine should cost $100,000 and could be used for ten years. The salvage value at the end of 10 years is estimated at $20,000. The machine should be depreciated using straight line depreciation over a seven year period. The annual maintenance and operating costs would be $20,000. Annual revenues are estimated at $55,000. If the machine is leased, the company would need to pay annual lease payments of $20,700. The first lease payment and a deposit of $5,000 are due immediately. The last lease payment is paid at the starting of Year 10. The deposit is refundable at the end of the tenth year. In additional, under a normal contract, the company have to pay for all maintenance and operating costs, although the leasing company does offer a service contract that can provide annual maintenance (on leased machines only). The contract must be paid up front and costs $30,000. Trasky evaluates that the contract will reduce its annual maintenance and operating costs by $10,000. Trasky's cost of capital is 14%. The tax rate is 40%. The service contract's costs could e expensed over the 10 year period. Consider this is an operating lease.
a. Determine the NPV for the purchase, lease without the service contract, and the lease with the service contract.
b. Which is the best alternative?
Kilograms produced and sold
Recording the deposit of social security, Medicare, and income taxed - Compute employers payroll taxes
How much compensation expense related to the restricted stock should Twilight report on its 2010 income statement?
case studies using excel spreadsheetcomplete the subsequent questions taken from the prescribed textbook management
Discuss how a hospital records the value of goods taken on consignment. For example, art work available for sale in the hospital's gift shop.
Convention center revenue would be sufficient to cover all expenses, including debt service.Yet, in its first five years of operation, the center consistently reported operating deficits.
Mark Stevens is considering opening a hobby and craft store. He would need $50000 to equip the business and another $100000 for inventories and other working capital needs. Rent on the building used by the business will be $25000 per year.
Balanced Scorecard measures, low-total-cost value proposition; Check an organization with the low-total-cost value proposition and suggest within each of the four Balanced Scorecard perspectives
Improvement in operating income arose due to changes in sales volume and how much arose for other reasons. Calculate variances that isolate the effects of price and usage changes in direct materials and direct manufacturing labor.
Evaluate revenue must K-Henry's generate in order to reach the break-even point and the variable utility cost per unit, to the nearest cent
Cottonwood considers catalogs as advertising and expenses the catalogs at the end of the month based on find how many catalogs are sent out during the month.
What is the yield that Trevor could earn by selling the bonds today
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd