User Account

All Pages

What is the net present value of both machines

Assignment Help Financial Accounting
Reference no: EM132972509

Jim D'Addario of the well-known guitar and bass string factory, D'Addario Strings in Long Island, NY, is considering two new designs for more efficient and higher quality machines. (The company has won many manufacturing and product patents in the field.)

  • Assume machine A costs $750,000 to make and is expected to return the following net earnings over five years, after which time it is retired: $10 million, $9 million, $8 million, $7 million, and $6 million, respectively.
  • Assume machine B costs $850,000 to make and is expected to return the following net earnings over five years, after which time it is also retired: $10.1 million, $9.1 million, $8.1 million, $7.1 million, and $6.1 million, respectively.

Problem 1: All other things being equal, what is the net present value of both machines, and which design should Jim go with if he is using a discount rate of 7%?

Reference no: EM132972509

Questions Cloud

Important role in a moral system : Analyze whether emotions or feelings play an important role in a moral system. How do they relate to morality?
Identify the legal and ethical compliance requirements : As the facility manager of a residential disability care centre, you are responsible for developing, reviewing and distributing policies and procedures relating
What is the npv of the company for music studio : What is the NPV of the company, considering a discount rate of 10%? A music studio predicts its future yearly net income (loss) to be.
Environmental impact of construction projects : Analyse the main forms of civil engineering contracts and procedures and apply them to a given task - Critically assess the environmental impact of construction
What is the net present value of both machines : Jim D'Addario of the well-known guitar and bass string factory, D'Addario String. which design should Jim go with if he is using a discount rate of 7%?
Explain the concept of foreign policy : In a brief introduction: Explain the concept of "Foreign Policy" in North America from past to current.
Research the governing bodies that oversee event planning : Research the governing bodies that oversee your Event Planning Project. In your initial post provide one example of a governing body
Explain three common buying errors : Please explain three common buying errors retailers may make in merchandise management, and provide clear supporting examples.
What will be the difference in EPS and total earnings : Management is considering $392,500 of debt at a coupon of 4.75%. What will be the difference in EPS and total earnings

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd