Cheyenne Company is considering the purchase of a machine with an estimated useful life of 5 years with the following data: Initial cost $220000 One-time training cost 31200 Annual maintenance costs 22000 Annual cost savings 110000 Salvage value 28600 The cash payback period is 2.79 years. 2.50 years. 2.85 years. 2.33 years.
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Cheyenne Company is considering the purchase of a machine with an estimated useful life of 5 years with the following data: Initial cost $220000 One-time training cost 31200 Annual maintenance costs 22000 Annual cost savings 110000 Salvage value 28600
The cash payback period is 2.79 years. 2.50 years. 2.85 years. 2.33 years.
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- The table given below lists the relevant cost items for a specific system purchase. The operating expenses for the new system are $10,000 per year, and the useful life of the system is expected to be five years. The salvage value for depreciation purposes is equal to 25% of the hardware cost. Cost Item Cost Hardware $160,000 Training $15,000 Installation $15,000 a) What is the Book Value (BV) of the device at the end of year three if the Straight Line (SL) depreciation method is used? b) Suppose that after depreciating the device for two years with the SL method, the firm decides to switch to the double declining balance depreciation method for the remainder of the device's life (the remaining three years). What is the device's BV at the end of four years?Pina Colada Company is considering the purchase of a machine and has compiled the following data: Initial cost One-time training cost Annual maintenance costs Annual cost savings Salvage value The cash payback period is 2.52 years. 2.50 years. O 2.28 years. O2.84 years. $180000 24800 18000 90000 23400pharoah company is considering the purchase of a machine with an estimated useful life of 5 years with the following data: initial cost 100000 one time training cost 8800 annual maintenace cost 10000 annual cost savings 50000 salvage value 13000 the cash payback period is?
- Wildhorse Manufacturing purchases equipment with an expected life of 10 years for $49500. The equipment has an estimated salvage value of $2000. Wildhorse expects the new equipment to generate annual cost savings of $8000. What is the payback period of the equipment? O 5.94 years O 6.19 years O 6.44 years O 10.00 yearsThe initial investment cost of machine A is $ 9,000 and the useful life of the machine is 6 years and annually.operating costs are $ 5,000. The initial investment cost of machine B is 16.000 $ and 9 yearsAt the end of its useful life, the machine can be sold for $ 4,000. Operation of machine BSince their cost is $ 4,000 per year, the alternative lifetimes of the machines areBased on an analysis time as much as a solid (EKOK), two machines according to the present value analysis.compare. Interest rate 10% per year (Answer: MSD (A) = 57,954 $; MSD (B) = 53,175 $)A new robot has a first cost of $380,000, and an annual operating cost of $88,000 in years 1 and 2, increasing by $10000 per year thereafter. The salvage value of the system is $25,000 regardless of when the system is retired within its maximum useful life of 5 years. Using a MARR of 14% per year, determine the ESL and the respective AW value of the system ESL: a) 1 year b) 4 years c) 5 years d) 3 years AW value of system: a) $204,860 b) $336,284 c) $97,953 d) $496,200
- Consider the following operating and maintenance costs of a new machine whose first cost is $ 86,000 with a useful life of 6 years and its salvage value is $ 14,000 whatever its age is. The interest rate is 6%, compounded annually. Find its economic life. Year 1 2 3 4 5 6 O&M Costs, $ 5,000 7,000 9,000 11,000 13,000 15,000A company is considering two methods for obtaining a certain part on annual basis. Method A will involve purchasing a machine for $60K with a life of 5 years, a $3K salvage value and a fixed annual operating cost of $10K. Additionally, each part produced by the method will cost $10. Method B will involve purchasing the part from a subcontractor for $27 per part. At an interest rate of 10% per year, What is the number of parts (in x thousands) per year required for the two methods to break even ? A. 1480 B.1490 C. 1500 which is it and whyDunder Mifflin Paper Company is considering the following two alternatives. The cost information for the two proposals for replacing an equipment are provided are in table below. Machine A Machine B Initial cost $120,000 $96,000 $20,000 for the first 10 years $12,000 per year for 20 Benefits/year and $9,000 for the next 10 years. years Life 20 years for both Salvage value $40,000 $20,000 interest 8% per year for both The NPW of machine A is Choose the closest answer.
- Russell Industries is considering replacing a fully depreciated machine that has a remaining useful life of 10 years with a newer, more sophisticated machine. The new machine will cost $194,000 and will require $29,400 in installation costs. It will be depreciated under MACRS using a 5-year recovery period Percentage by recovery year* Recovery year 3 years 5 years 7 years 10 years 1 33% 20% 14% 10% 2 45% 32% 25% 18% 3 15% 19% 18% 14% 4 7% 12% 12% 12% 5 12% 9% 9% 6 5% 9% 8% 7 9% 7% 8 4% 6% 9 6% 10 6% 11 4% Totals 100% 100% 100% 100% A $30,000 increase in net working capital will be required to support the new machine. The firm's managers plan to evaluate the potential replacement over a…A computer with a life of 13 years has the following cost and interest rate. What is the EUAC of the computer? initial cost $5500 salvage value annual maintenance $3100 years 1-8 years 9-13 interest rate $275 $425 6% Correct Answer: $780 Your Answer: n/a1. A machine is purchased for $50,000. Its annual maintenance costs are $1000. Every 4 years the machine requires a complete overhaul at a cost of $4,000. The machine has a lifespan of 20 years with a salvage value at that time of $10,000. a) Create a cash flow diagram for the machine lifespan costs. b) What additional information might be useful in determining if the should purchase this machine? c) Of the factors you have identified as important (part (b)) what are the most critical (top two perhaps) that should be further investigated/resolved? company