Solution-Which machine if any should the company select at

Which machine if any should the company select at a marr

Reference no: EM13882051

Only one of four different machines can be purchased for Glass Act Products. An engineer performed the following analysis to select the best machine, all of which have a 10-year life. Which machine, if any, should the company select at a MARR of 22% per year?

	1	2	3	4
Initial cost, $	-44,000	-60,000	-72,000	-98,000
Annual cost, $ per year	-70,000	-64,000	-61,000	-58,000
Annual savings,	+80,000	+80,000	+80,000	+82,000
$ per year
Overall ROR, %	18.6	23.4	23.1	20.8
Machines compared	2 to 1	3 to 2	4 to 3
Incremental	-16,000	-12,000	-26,000
investment, $
Incremental cash fl ow,	+6,000	+3,000	+5,000
$ per year
ROR on increment, %	35.7	21.4	14.1

Reference no: EM13882051

Questions Cloud

Liquid mixture of ethyl alcohol : A beaker filled with an equimolar liquid mixture of ethyl alcohol and ethyl acetate evaporates at O°C into still air at 101 kPa (1 atm) total pressure. Assuming Raoult's law applies, what will be the composition of the liquid remaining when half t..

Annual dividend-what is the capital gains yield : The Toy Chest pays an annual dividend of $4.80 per share and sells for $93.20 a share based on a market rate of return of 15 percent. What is the capital gains yield?

Compute the company''s return on investment : Compute the company's return on investment

They feel the business will be worthless : Marko, Inc. is considering the purchase of ABC Co. Marko believes that ABC Co. can generate cash flows of $6,000, $11,000, and $17,200 over the next three years, respectively. After that time, they feel the business will be worthless. Marko has deter..

Which machine if any should the company select at a marr : An engineer performed the following analysis to select the best machine, all of which have a 10-year life. Which machine, if any, should the company select at a MARR of 22% per year?

Calculate the sustainable growth rate of the company : Johnson Products earned $3.10 per share last year and it paid out $.75 dividend. The company’s ROE is 16%. a) Calculate the dividend payout ratio; b) Calculate the sustainable growth rate of the company.

Particular type of bacteria grows : A particular type of bacteria grows at a rate of 17% per day. If my hyena got infected with 700 bacterium when his leg was cut by barbed wire, how many bacterium will be present in 3 days when I finally decide I need to take the hyena to the veterina..

With the stock market return as the discount rate : Last year Star Inc paid a dividend of $1.50 on its common stock last year. You expect the dividend will increase at 15% each year over the next three years; but after that, a normal growth rate of 5% is expected for the foreseeable future. The stoc..

Whats the sustainable growth rate : Abbott Lab made $2.80 net income per share last year and paid out $1.30 in dividend. The company had a book value (or equity) per share of $20. The market has a risk free rate of 3.1% and market return 11.1%. Abbott has a historical beta of .90. Wh..

User Account

All Pages

Which machine if any should the company select at a marr

Reference no: EM13882051

Reference no: EM13882051

Questions Cloud

Reviews

Write a Review

Finance Basics Questions & Answers

How much should be accumulated by the beginning

What is the afn for the coming year

The company believes that its north american business is

Focus your energy on comparing the attributes of the two

Assuming that sales are the only source of cash inflows and

Decision making across the organization

Discussion-course reflection

Computation of lease option vs. buy option using time value

Calculate the present value of the depreciation tax shield

What is innovative products company economic value added

At what price is the maintenance margin first violated

Example for the global financial environment

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT