What is the cost today of running the machine

Assignment Help Financial Management

Reference no: EM132036769

1. You are trying to choose between purchasing one of two machines for a factory. Machine A costs $16,873.00 to purchase and has a 3.00 year life. Machine B costs $18,373.00 to purchase but has a 5.00 year life. Regardless of which machine you purchase, it will have to be replaced at the end of its operating life. Which machine should you choose and what is the cost TODAY of running the machine for the next 22.00 years? Assume a discount rate of 13.00 percent.

Answer Format: Currency: Round to: 2 decimal places.

2. A lawn service company uses a low-end mower for their yards. The mower costs $2,000.00 initially, and then has an annual cost of $300.00 for gasoline and servicing. The company uses the mower for three years and then replaces with an identical model. The company has a 12.00% desired return on their investments.

What is the NPV of one mower for the firm over 3 years?(express as a negative)

What is the equivalent annual cost for the mower? (express as a negative)

Answer Format: Currency: Round to: 2 decimal places.

Reference no: EM132036769

Questions Cloud

What is the yearly cost of operating tractor : What is the NPV of buying tractor A? What is the yearly cost of operating tractor B?

What is the value of the stock : If the required return on the preferred stock is 6.80 percent, what’s the value of the stock?

What is the npv of this project for the restaurant : What is the NPV of this project for the restaurant? What is the IRR of this project?

Calculate her take-home pay for her first check : Calculate her take-home pay for her first check.

What is the cost today of running the machine : Which machine should you choose and what is the cost TODAY of running the machine for the next 22.00 years?

Mid-western manufacturer of tool-and-die-making equipment : American Machine Tools is a mid-western manufacturer of tool-and-die-making equipment.

Company manufactures a product using two machine cells : A company manufactures a product using two machine cells. Each cell has a design capacity of 250 units per day and an effective capacity of 230 units per day.

Would you say that systems that have higher efficiency ratio : Would you say that systems that have higher efficiency ratios than other systems will always have higher utilization ratios than those other systems?

The business community must constantly adapt to change : Given that the business community must constantly adapt to change, examine the impact of the Internet on current business practices.

User Account

All Pages