Which machine should united automation sell

Assignment Help Finance Basics
Reference no: EM13682282

As a result of improvements in engineering, United Automation is able to sell one of its two milling machines. Both machines perform the same function but differ in age. The newer machine could be sold today for $50,000. Its operating costs are $20,000 a year, but in 5 years the machine will require a $20,000 overhaul. Thereafter, operating costs will be $30,000 until the machine is sold in year 10 for $5,000.
The older machine could be sold today for $25,000. If it is kept, it will need an immediate $20,000 overhaul. Thereafter, operating costs will be $30,000 until the machine is sold in year 5 for $5,000.
Both machines are fully depreciated for tax purposes. The company pays tax at 35%. The cost of capital is 12%. Which machine should United Automation sell? Explain any assumptions underlying your answer.

Reference no: EM13682282

Questions Cloud

Explain what is the volume percentage of a solution : Explain what is the volume percentage of a solution prepared by disolving 17 g of NaOH in enough water to make a final volume of 120 ml. Explain how many ml of a 10% solution can be made from the solution in the first question
Why is inventory management primarily concerned with : Why is inventory management primarily concerned with
Explain the possible combinations of isotopes of hydrogen : Explain what are all the possible combinations of the isotopes of hydrogen and oxygen that can result in a water molecule. For example, one combination is 2H-2H-17O.
What is the npv of pigpen project : United Pigpen is considering a proposal to manufacture high-protein hog feed.
Which machine should united automation sell : Which machine should United Automation sell? Explain any assumptions underlying your answer.
State the same concentration how much grams of powder needed : An ice blue raspberry koolaid package is labeled to conation 6.2g of powered which will make 2 quarts of beverage to make 100ml of solution having the same concentration how much grams of powder needed
What is the present value of her lottery winnings : What is the present value of her lottery winnings?
Explain how many grams of selected compounds mix together : Which two of the subsequent compounds would you mix to make a buffer of pH 7.45: H3PO4 FM 98.00, NaH2PO4 (FM 119.98), Na2HPO4 (FM 141.96), and Na3PO4 (FM 163.94)? (b) If you required to prepare 1.00 L of buffer with a total phosphate concentration..
Use to forecast the exchange rate : Choose a country and discuss what technique you would use to forecast the exchange rate for that country's currency and U.S. dollar. Support your choice, including any factors especially relevant for that country which influenced your decision..

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the price of a 10-year zero coupon bond paying 1000

what is the price of a 10-year zero coupon bond paying 1000 at maturity if the ytm isa. 5b. 10c.

  Computing maximum one month loss of currency portfolio

Compute the maximum one month loss of currency portfolio? Use 97% confidence level and suppose monthly percentage change for each currency are normally distributed.

  Investors require a rate of return of 12 percent at what

investors require a rate of return of 12 percent. at what price will the stock sell if the next expected dividend d1 is

  Time value of money and interest rates

Company A purchases obsolete inventory and re-sells it on-line. Company A learns that Company B is selling some obsolete inventory for $100,000. Supposing interest rates remain at 10% over the upcoming two years, should Company B accept Company As o..

  What is the change in price the bond will experience in

a 5.50 percent coupon bond with 19 years left to maturity is priced to offer a 7.80 percent yield to maturity. you

  You have 26000 to invest in a stock portfolio your choices

you have 26000 to invest in a stock portfolio. your choices are stock x with an expected return of 15 percent and stock

  Your firmrsquos strategic plan calls for a net increase in

your firmrsquos strategic plan calls for a net increase in total assets of 100 million during the next five years which

  Amortization for bonds accounting and interest expense on

amortization for bonds accounting and interest expense on bonds calculations.on january 1 2002 leary corporation issued

  Calculating multiple cash flows for a year

Calculating multiple cash flows for a year and determine the amount of each of the annual annuity payment

  Compute the cost of retained earnings

Compute the cost of retained earnings (Ke). Using this formula: Ke(Cost of common equity in the form of retained earnings).

  Net present value (npv)

Elaborate on why the net present value (NPV) of a relatively long-term project is more sensitive to changes in the cost of capital than is the NPV of a short-term project. Provide two good examples of NPV that support your position.

  These items are taken from the financial statements of

these items are taken from the financial statements of victory co. at december 31 2012.buildings

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