What is the equivalent annual saving from the purchase

Assignment Help Finance Basics
Reference no: EM132798408

Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball for $140,000 and sell its old low-pressure glueball, which is fully depreciated, for $24,000. The new equipment has a 10-year useful life and will save $32,000 a year in expenses. The opportunity cost of capital is 8%, and the firm's tax rate is 21%. What is the equivalent annual saving from the purchase if Gluon can depreciate 100% of the investment immediately. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Reference no: EM132798408

Questions Cloud

What is forecast for inventory : A company has a forecast of $730,000 of Cost of Goods Sold for the year. It has a goal of getting its Days of Inventory down to 20 days of Inventory
Describe the five social norms of hacker subculture : Describe the five social norms of hacker subculture and provide an example of each. Search Internet news sources and find a recent article on hacking.
Total risk of an investment portfolio : Explain how adding more securities to an investment portfolio could potentially decrease the total risk of an investment portfolio
Discuss the purpose of the fourth amendment : Research a court case that involves the Fourth Amendment and the police authority to perform searches. Provide an overview of the case, discuss the purpose of.
What is the equivalent annual saving from the purchase : Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball for $140,000 and sell its old low-pressure glueball
Why responsibilities of a prosecutor are essential : Choose and discuss two special responsibilities of a prosecutor. Why do you think the responsibilities of a prosecutor are essential within the legal profession
ENG 115 English Composition Assignment : ENG 115 English Composition Assignment Help and Solution - Strayer University, USA - Homework Help - Write a supporting paragraph for each of the thesis points
Calculate and interpret the profit variance : Consider the following 2015 data for Newark General Hospital (in millions of dollars): Static Budget Flexible Budget Actual Results
Calculate the cost of equity by two separate methods : Calculate the cost of equity by two separate methods, first using the CAPM, and secondly using the dividend growth model.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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