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andreyandreev [35.5K]
3 years ago
15

The replacement of a planning machine is being considered by the Reardorn Furniture Company.​ (There is an indefinite future nee

d for this type of​ machine.) The best challenger will cost ​$30 comma 000 for installation and will have an estimated economic life of 13 years and a ​$1 comma 500 MV at that time. It is estimated that annual expenses will average ​$13 comma 000 per year. The defender has a present BV of ​$6 comma 500 and a present MV of ​$5000. Data for the defender for the next three years are given below. Using a​ before-tax interest rate of 18​% per​ year, make a comparison to determine whether it is economical to make the replacement now.
Business
1 answer:
Yuliya22 [10]3 years ago
3 0

Answer:

We have the comparison below

Explanation:

                                                     1          2           3

Expenses for the year 20000    27000      34000

PVIF at 12%                      0.89286   0.79719      0.71178

PV of expenses                 17857    21524       24201

Cumulative PV of expenses 17857 39381 63582

EOY MV                                        -1000 -1750 -2500

PV of MV                                 -893 -1395 -1779

Total PW (4000+ PV of expenses - PV of MV) 22750   44776    69361

P/A                                            0.89286 1.69005 2.40183

EUAC                                     25480 26494 28879

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Murljashka [212]

Answer:

16.96%

Explanation:

In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

= 5.8% + 1.8 × (12% - 5.8%)

= 5.8% + 1.8 × 6.2%

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= 16.96%

The (Market rate of return - Risk-free rate of return)  is also called market risk premium

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2 years ago
ABC, Incorporated desires to have the most qualified people in every position throughout its organization. This is an example of
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Answer:

The correct answer is letter "A": Developing human capital.

Explanation:

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4 0
3 years ago
A firm plans to begin production of a new small appliance. The manager must decide whether to purchase the motors for the applia
blondinia [14]

Answer:

If the firm is going to need less than 50,000 motors, they should purchase them from the outside vendor.

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Dummitt, Inc. anticipates sales of 70,000 units, 68,000 units, and 71,000 units in July, August, and September, respectively. Co
siniylev [52]

Answer:

the number of units produced in August is 68,900 units

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The computation of the number of units produced in August is presented below:

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Hence, the number of units produced in August is 68,900 units

The same format should be used  

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