What is the value to purchases the machine

Assignment Help Corporate Finance

Reference no: EM132208197

Questions -

Q1) Your Company is deciding whether to invest in a new machine. The new machine will increase cash flow by $331734 per year. You believe the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $1,760,000. The cost of the machine will decline by $110,000 per year until it reaches $1,320,000, where it will remain. The required return is 15%. What is the NPV if the company purchases the machine today?

Q2) Your Company is deciding whether to invest in a new machine. The new machine will increase cash flow by $328366 per year. You believe the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $1,760,000. The cost of the machine will decline by $110,000 per year until it reaches $1,320,000, where it will remain. The required return is 14%. What is the NPV if the company decides to wait 2 years to purchases the machine.

Q3) Your Company is deciding whether to invest in a new machine. The new machine will increase cash flow by $327006 per year. You believe the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $1,760,000. The cost of the machine will decline by $110,000 per year until it reaches $1,320,000, where it will remain. The required return is 17%. What is the value of the option to wait 2 years to purchases the machine.

Reference no: EM132208197

Questions Cloud

How sales forecast impacts all other forecasts for the firm : Analyze how this sales forecast impacts all other forecasts for the firm, such as materials, labor, overhead, cash receipts, and disbursements.

Post a brief description of the vulnerable population : Select a code of ethics that might be applicable to the Elderly Population, and identify specific guidelines that might guide your work with this population.

How the problem is affecting the organization : Conduct internal and external research to determine previously attempted solutions and potential solutions that could be implemented to solve identified problem

Discuss the business goals and constraints : Discuss some of the key considerations in designing a network design strategy. What approaches have worked for you in your present role or would you propose.

What is the value to purchases the machine : Your Company is deciding whether to invest in a new machine. The required return is 17%. What is value of the option to wait 2 years to purchases the machine

How action research can influence educational change : discuss your takeaways from this course. What new learning transpired for you in this course? What will you carry with you to your current or future classroom?

Describe how technical goals can be coupled : Describe how technical goals can be coupled with information assurance and security considerations in a network design project.

An overview of procedural safeguards and parental rights : A visual to help families understand the explanation of RTI, MTSS, and the special education identification process.

How similar approaches may be used in community projects : From the first e-Activity, examine the grid computing concept and discuss ways it can be used to solve complex scientific problems.

User Account

All Pages