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S_A_V [24]
3 years ago
8

Precision Dyes is analyzing two machines to determine which one it should purchase. The company requires a rate of return of 15

percent and uses straight-line depreciation to a zero book value over the life of its equipment. Ignore bonus depreciation. Machine A has a cost of $462,000, annual aftertax cash outflows of $46,200, and a four-year life. Machine B costs $898,000, has annual aftertax cash outflows of $16,500, and has a seven-year life. Whichever machine is purchased will be replaced at the end of its useful life. Which machine should the company purchase and how much less is that machine's EAC as compared to the other machine's? B; $23,156.82 A; $17,404.04 A; $24,321.02 B; $17,521.94 B; $16,791.08
Business
1 answer:
Sonja [21]3 years ago
3 0

Answer:

$24,321.02

Explanation:

For computing the EAC first we have to determine the net present value for both machines which are shown below:            

For Machine A

Net present value = Annual cash outflows × PVIFA factor for 15% at four years - initial cost

= -$46,200 × 2.8550 - $462,000

= -$131,901 - $462,000

= -$593,901

Now the EAC is

= -$593,901 ÷ 2.8550

= -$208,021.37

For Machine B

Net present value = Annual cash outflows × PVIFA factor for 15% at seven years - initial cost

= -$16,500 × 4.1604  - $898,000

= -$68,646.60 - $898,000

= -$966,646.60

Now the EAC is

= $966,646.60 ÷ 4.1604

= -$232,344.63

The different amount in EAC is

= $24,323.26

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One reason there is a need for integrated marketing communications is that consumers​ don't distinguish between content sources the way marketers do.

Explanation:

Integrated messaging in marketing is a simple concept. This guarantees the diligent relation of all forms of communication and communications. Integrated marketing communications, or IMC, as we will term it, at its fundamental level, involves combining all promotional instruments in a harmonious fashion.

For example, an IMC is used to convey campaign messages through various channels. This increases the efficiency of activities used to turn foreigners into prospects and customers.

6 0
3 years ago
Eric is an inventory manager at a garment manufacturing firm. How should he plan the ordering of inventory? A. He should order l
fiasKO [112]

Answer:

B

Explanation:

i just took the test and got it correct

3 0
2 years ago
Sarah can study 20 pages per night. each page has three homework problems. if she studies for 3 nights how many homework problem
ss7ja [257]
20 pages in one night times 3 nights = 60. 60 pages times 3 problems per page is 180 problems.

20*3=60
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7 0
3 years ago
For a levered firm, flotation costs should
KengaRu [80]

Answer:

The answer is option B. For a levered firm, flotation costs should <u>be spread over the life of a project, thereby reducing the cash flows for each year of the project.</u>

Explanation:

When a company’s securities are listed on a public exchange, there is a general saying that securities are floated on the exchange. That is how the name flotation costs came about.

Flotation is actually the costs  incurred by a company in issuing its securities to public.  it is also called issuance costs.

Examples of Flotation costs include charges paid to the investment bankers, lawyers, accountants, registration fees of the securities regulator and the exchange on which the issue is to be listed.

Flotation cost would vary based on several factors, such as company’s size, issue size, issue type (debt vs equity),

In summary, Flotation costs are the cost a company incurs to issue new stock making new equity cost more than existing ones.

Business analysts argue that flotation costs are a one-time expense that should be adjusted out of future cash flows in order to not overstate the cost of capital forever.

It is based on this premise that i chose option B, which states that flotation costs be spread over the life of a project thereby reducing the cash flows for each year of the project at levered firms.

5 0
2 years ago
For each of the following items, calculate the cash sources or cash uses that should be recognized on the statement of cash flow
Serhud [2]

Answer:

$784,700

Explanation:

Data provided

Revenue from sales = $762,000

Decrease in accounts receivables = $22,700

The computation of cash received from customers is shown below:-

Cash receipts from customers = Revenue from sales + Decrease in accounts receivables

= $762,000 + $22,700

= $784,700

Therefore for computing the cash received from customers we simply applied the above formula.

5 0
3 years ago
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