Recently bought is expected to incur the repair costs

Assignment Help Financial Management

Reference no: EM13850723

The new copier your company has recently bought is expected to incur the following repair costs:

Year Repair Cost

1 $ 0

2 500

3 500

4 1500

5 2000

The dealer has offered you a 5-year maintenance contract for $800 per year payable at the end of each year. Your company’s MARR is 6% per year. Is this a good deal

Reference no: EM13850723

Questions Cloud

What is the cost of preferred stock financing : (Cost of preferred stock) The preferred stock of Gator Industries sells for $34.35 and pays $2.74 per year in dividends. What is the cost of preferred stock financing? The flotation costs adjusted initial outlay for issuing the preferred share are?

Issue new stock to finance its capital budget : Assume that you are an intern with the Brayton Company, and you have collected the following data: The yield on the company's outstanding bonds is 7.75%; its tax rate is 40%; the next expected dividend is $0.65 a share; the dividend is expected to gr..

Projected sales for the first six months : LPD Logistics, Inc.'s projected sales for the first six months of 2010 are given below. 20% of sales are collected in the month of the sale, 75% are collected in the month following the sale, and 5% are written off as uncollectible. Cost of goods so..

Individual or component costs of capital : (Individual or component costs of capital) Compute the cost of capital for the firm for the following: A new common stock issue that paid a $1.85 dividend last year. The firm's dividends are expected to continue to grow at 7.7 percent per year, forev..

Recently bought is expected to incur the repair costs : The new copier your company has recently bought is expected to incur the following repair costs. The dealer has offered you a 5-year maintenance contract for $800 per year payable at the end of each year. Your company’s MARR is 6% per year. Is this a..

What is contract worth if player opportunity cost of capital : A basketball player has been offered a “$15 million contract”. He will be paid $1.5 million each year for 10 years beginning today. (A cash flow diagram is optional) What is the contract worth if the player’s opportunity cost of capital is 10%. How m..

How much money is expected to be collected : A company collects 25% of its sales during the month of sale, 65% one month after the sale, and 10% two months after the sale. The company expects sales of $50,000 in August, $80,000 in September, $90,000 in October, and $60,000 in November. How much..

Retained earnings using the percent of sales method : Ribbon Industries reported sales of $3 million and net income of $400,000 for 2010. The retained earnings balance at the end of 2012 is $7 million. Ribbon Industries has a dividend payout ratio of 30%. If sales are expected to increase by 25% next ye..

What is the value of net working capital : A company has total asset of $ 31300 and long term debt of $8600, net fixed asset is $19300 and owners equity of $21100 what is the value of net working capital.

User Account

All Pages