Which photocopy machine should the firm buy

Assignment Help Finance Basics

Reference no: EM131477066

Question: A company is considering whether to buy a regular or color photocopier for the office. The cost of the regular machine is $10,000, its life span is 5 years and the company has to pay another $1,500 annually in maintenance costs. The color photocopier's price is $30,000, its life span is also 5 years and the annual maintenance costs are $4,500. The color photocopier is expected to increase the revenue of the office by $8,500 annually. Assume that the company is profitable and pays 40% corporate tax, the relevant interest rate is 11%. Which photocopy machine should the firm buy?

Reference no: EM131477066

Questions Cloud

Who has the stronger arguments in tropical timber dispute : Who has the stronger arguments in the tropical timber dispute? What are the business implications of each of this dispute?

What is the npv of replacing the old machine : The "Car Clean" company operates a car wash business. The company bought a machine 2 years ago at the price of $60,000. The life span of the machine is 6 years.

Discuss the effectiveness and the limitations : Discuss the effectiveness and the limitations. Describe how the emotion, thought, and behavior components of the models interrelate and influence one another.

Normally distributed random variable with mean : X is a normally distributed random variable with mean 10 and variance 24.

Which photocopy machine should the firm buy : A company is considering whether to buy a regular or color photocopier for the office. The cost of the regular machine is $10,000, its life span is 5 years.

What is the minimum number of cans for sell annually : The Coka company is a soft drink company. Until today the company bought empty cans from an outside supplier that charges Coka $0.20 per can.

Plot a graph showing the profitability of investment : The ZZZ Company is considering investing in a new machine for one of its factories. The company has two alternatives to choose from.

Describe the algorithms you used to solve the problem : Describe the algorithms you used to solve the problem. Include (and justify) any simplifying approximations or assumptions you made in solving the problem.

Confidence interval for the population mean : Construct a 90% confidence interval for the population mean for the time needed for children to learn basics of foreign language.

User Account

All Pages