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Diano4ka-milaya [45]
2 years ago
12

GMC purchased a $180,000 milling machine, which will be used for 5 years. The machine is expected to save the company $30,000 du

ring the first year of operation. Then, the annual savings is expected to DECREASE by 3% per year over the previous year due to additional cost of maintenance. The machine is to be operated 5,000 hours per year (on average) and the machine is expected to have NO salvage value at the end of the 5-year project. Interest is 15% compounded annually. Determine the present worth, PW (15%), of all the savings in this problem. (Round your answer to the nearest dollar. Do not enter the $ symbol or use commas.)
Business
1 answer:
aliina [53]2 years ago
3 0

Answer:

Explanation:

\left[\begin{array}{ccc}Year&Cashflow&Present Value\\0&-180,000&-180,000\\1&30,000&26,086.9565\\2&29,100&22,003.7807\\3&28,227&18559.7107\\4&27,380.19&15,654.7125\\5&26,558.7843&13,204.4097\\Net&Value&-84,490.4299\\\end{array}\right]

The first step will be calculate the alue of eachcash saving

mulitply by (1- 0.03) which is the rate at which the flow decrease.

Then we calculate the present value of each cashflow

\frac{Principal}{(1 + rate)^{time} } = PV

<u />

<u>For example year 4:</u>

\frac{27,380.19}{(1 + 0.15)^{4} } = 15,654.7125

Then we add all the cash saving and compare with the machien cost to calcuale the net present value of the machine

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calculate the unadjusted rate of return for an investment that has a net cost of $430,000 and should provide an average after-ta
Elden [556K]

9%, as the unadjusted rate of return is equal to the average yearly net income growth rate divided by the initial investment's net cost.

<h3>Calculation:</h3>

$40,090 divided by $430,00 is.093 * 100, or 9%.

<h3>If the needed rate of return is 6%, what is the present value of a cash inflow of $2,000 five years from now? Examine later?</h3>

$2600 will be given to the recipient after five years.

<h3>If the internal rate of return is 5% and the desired rate of return is 6%, should management accept the investment opportunity?</h3>

No, as the internal rate of return on the investment is lower than the intended rate of return.

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3 0
1 year ago
You are analyzing an office building to determine if it make sense to build it. the building and site improvements cost $145 and
Sophie [7]

Answer:

market net operating profit per square foot = $8.80

Explanation:

total investment = $145 per square foot

the investor requires a 6% rate of return = $145 x 6% = $8.70 per square foot

total revenue per square foot =                                                      $11

proportional market vacancy and credit loss = $11 x 5% =        ($0.55)

<u>other expenses = $11 x 15% =                                                       ($1.65)  </u>

market net operating profit per square foot =                             $8.80

The project should be carried out since the net operating profit is larger than the investor's required rate of return.

7 0
3 years ago
Which of the following are true if you pay only the minimum amount each month towards your credit card bill?a. You will be charg
BigorU [14]

Answer:

The correct answer is A and C as both are true statement.

Explanation:

Credit Card is a facility which is offered by banks to borrow money and it could be used by the borrower for buying expensive goods and the services up front. It has a time period, in which the borrower need to make payment for the amount used by the borrower along with the interest charged.

So, if the borrower paid the minimum amount towards the credit card, then the borrower is still in debt until clears or paid the whole amount and also will be charged the interest against the remaining balance or amount.

4 0
3 years ago
XYZ DebenturesIssue Date: 8-1-XXPayment Dates: J 1 &amp; J 1Maturity Date: 7-1-XXSome years after issuance, a customer buys 10 d
SashulF [63]

Answer:

B. 105 days of accrued interest

Explanation:

The purchase on Thursday, October 12th will settle on Monday, October 16th - 2 business days after trade date.  

Accrued interest on corporate bonds is based on a 30days per month/360 day year.

And interest starts accruing from the day of the last interest payment, up to, but not including, settlement.

See below for day calculation

July   30 days

August  30 days

September 30 days

October  15 days (up to but excluding settlement)

Total  105 days

4 0
3 years ago
Which of the following organizations emerged from the Bretton Woods agreement of 1944, where a group of international leaders de
Fofino [41]

Answer:

International Monetary Fund, IMF and the World Bank

Explanation:

The Bretton Woods Agreement was negotiated in July, 1944 which established a new global monetary system. It made US dollar the global currency and replaced gold standard.

This agreement created The World Bank and International Monetary Fund (IMF) which would monitor the new monetary system.

The Bretton Wood system was dissolved in 1970's but IMF and The World Bank still exist and are strong pillars of global monetary system.

8 0
3 years ago
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