Calculate the maximum price of machine, Financial Management

Assignment Help:

Silvana Zhang of Sajjad Jafri & Geopeng Li Limited is considering purchasing a new widget making machine. She would like to know the maximum price she should pay for the new machine.

1. The new machine will replace the existing machine, which has a current market value of $1,000,000.

2. New machine will reduce before tax operating cost by $300,000 per year for 15 years.

3. The old machine is expected to last for another 10 years and will have a salvage value of $100,000 at the end of 10 years.

4. The new machine is expected to last for 15 years and will have a salvage value of $200,000.

CCA rate is 20%, tax rate is 30%, and the required rate of return is 15%

 

 


Related Discussions:- Calculate the maximum price of machine

What are the techniques of financial management, What are the techniques of...

What are the techniques of financial management There are two widely-discussed techniques: (i) Profit maximisation approach and (ii) Wealth maximisation approach.

What is a hedge fund, Q.What is a Hedge Fund? A Hedge Fund is a fund es...

Q.What is a Hedge Fund? A Hedge Fund is a fund established by one or else several partners with net worth of at least $1 million (although this maybe falling). It uses long as

American stock exchange - amex, It is the third-largest stock exchange by t...

It is the third-largest stock exchange by trading size in the United States. In 2008 it was get hold by the NYSE Euronext and turn into the NYSE Amex Equities in 2009. The AMEX is

Monetary approach to the Exchange Rate, a The Monetary Approach to the ER. ...

a The Monetary Approach to the ER. All else equal, an increase in the interest rate in Canada is associated, in the long run, with higher prices in Canada and an appreciated exchan

Help with 4 questions, I need assistance with 4 questions. How do I know s...

I need assistance with 4 questions. How do I know someone can help me and have some idea of what it would cost before submitting the information? Also, how fast is the turnaround

Business have a positive accounting profit, Can a business have a positive ...

Can a business have a positive accounting profit and a negative economic profit? Please explain.

Example of securitization, The process of securitization can best be ...

The process of securitization can best be understood by taking the following example. Assume that there exists an NBFC which has hire purchase as its major busine

Management accounting, Management Accounting: Management accounting on ...

Management Accounting: Management accounting on the other hand tends to focus internally. Reports generated through management accounting processes will be used by the organisa

Financial management, Financial Management: Financial management is, in...

Financial Management: Financial management is, in its most basic interpretation, the management of costs against revenue. Other management initiatives, such as marketing, are d

Evaluate earnings per share, This question tested earnings per share and P/...

This question tested earnings per share and P/E ratio. The widely held of the marks were for calculations and a key test was the distinction between what transactions affect basic

Write Your Message!

Captcha
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