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Over [174]
3 years ago
11

(Ignore income taxes in this problem.) Clairmont Corporation is considering the purchase of a machine that would cost $150,000 a

nd would last for 5 years. At the end of 5 years, the machine would have a salvage value of $18,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $37,000. The company requires a minimum pretax return of 12% on all investment projects.
The present value of the annual cost savings of $37,000 is closest to:________.
a) $133,385
b) $235,070
c) $185,000
d) $20,979
Business
1 answer:
djverab [1.8K]3 years ago
4 0

Answer:

a) $133,385 

Explanation:

Present value is the sum of discounted cash flows.

Present value can be calculated using a financial calculator:

Present value each year from year 1 to 5 = $37,000

I = 12%

NPV = $133,385 

To find the NPV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

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Ireland Corporation obtained a $40,000 note receivable from a customer on June 30, 2011. The note, along with interest at 6%, is
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Answer:

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Explanation:

The maturity value of the note receivable on June 30, 2012

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Amount of deduction  

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Finally, the Cash received by Ireland will be

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= $42,400 - $ 3,180

= $39,220

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Travis, a licensed salesperson, was awarded a judgment of $10,000, but the broker won't pay. for what amount may travis apply to
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Although Martin is not in top management, he is charismatic and well liked by others in his organization. Other employees often
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Answer:

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