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AysviL [449]
2 years ago
5

A new packaging machine will cost $57,000. The existing machine can be sold for $5,000 now and the new machine for $7,500 after

its 10-year useful life. If the new machine reduces annual expenses by $5,000, what is the present worth at 25% of this investment?
Business
1 answer:
lesya [120]2 years ago
4 0

Answer:

Our answer is  $ 33,342

Explanation:

Initial investment = Cost of new machine - Salvage value of old machine = $ 57,000 - $ 5,000 = $ 52,000

Annual cost savings = $ 5,000

Present value of cash savings at a discount rate of 25% = Annuity x PVIFA 25%, 10 years + Salvage x PVIF 25%, 10th year= $ 5,000 x 3.5705 + $ 7,500 x 0.1074 = $ 17,852.5 + $ 805.5 = $ 18,658

Net present value = Present value of cash savings - Initial investment = $ 18,658 - $ 52,000 = $ ( 33,342 )

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________ are transacted between international businesses and their banks, between banks, and between governments when it is desi
Oliga [24]

Answer: Swaps

Explanation:

A foreign exchange swap is a written agreement between two parties with different currencies to exchange such currencies at a specific period of time. In a swap deal, one party to the agreement gives out currency to the other party while also collecting collecting currency from such party. The written agreement usually contains such details like the interest on the amount of exchange, as well as the loan value of one currency against the other.

5 0
2 years ago
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Select the situation that will occur when a shortage of bread exists, and consumers pressure producers to change their actions.
love history [14]
The answer is : Producers respond by supplying more bread

When shortage of breads increases, the demand of the product will jump through the roof, which will also increase its price

To gain the maximum profit, the producers will respond by supplying more bread until the shortage is eliminated
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3 years ago
Dragon Inc. a NJ based construction firm is evaluating whether to replace an aging machine with a new model. For the old machine
Vilka [71]

Answer:

It should replace the old machine. In the current accounting period.

Explanation:

We need to perform a relevant cost analysis:

Keep the machine:

F0 = $0

F1 = $1500 maintenance

F2 = $3,000 maintenance

F3 = $6,000 maintenance

F4 = $12,000 maintenance

F5 =$24,000 maintenance + 250 resale value

replace the machine:

F0 = -12,000 purchase + 4,000 sale of old machine = -800

F1 = $900 maintenance

F2 = $900 maintenance

F3 = $900 maintenance

F4 = $900 maintenance

F5 =$900 maintenance + 1,500 resale value

As revenues are the same for each machine, we ignore them. We will only focus on the cost each machine generate:

We solve for the present worth of each machine with a discount rate of 12%

\displaystyle PV_{old} = -\frac{1,500}{1.12} - \frac{3,000}{1.12^2} - \frac{6,000}{1.12^3} - \frac{12,000}{1.12^4} - \frac{23,750}{1.12^5}\\\\\displaystyle PV_{old} = -29,104.15

\displaystyle PV_{new} = -8,000 - \frac{900}{1.12} - \frac{900}{1.12^2} - \frac{900}{1.12^3} - \frac{900}{1.12^4} +  \frac{600}{1.12^5}\\\\\displaystyle PV_{new} = -10,393.16

As the present worth of the new machine is lower, the best decision for the company is to purchase the new machine and sale the old machine.

Delaying this will incur in higher maintenance cost (1,500 - 900)

and a lower recovery value (4,000 - 2,000)

As there is no cost saving for delaying the purchase, it should be made immediately.

8 0
3 years ago
In East Germany, back before the Berlin wall fell, there was one manufacturer of cars (VEB Sachsenring Automobilwerke Zwickau).
Anastasy [175]

Answer:

Command

Explanation:

Based on the information given the East Germans were living with COMMAND economy.

COMMAND ECONOMY occur in a situation where people are be authoritated, instructed or directed to do something without giving them the right to Decide and acquired what they want , desire or wish to have.

A country economy can be tend to be classified as a COMMAND ECONOMY when the government of such country are in total controlled of the economy of the country just as in the case of East Germany.

Therefore East Germans were living with what COMMAND economy.

5 0
3 years ago
Will the fact that the euro has become the standard currency in the EU help or hinder a new McDonald's franchise in Europe?
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