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VMariaS [17]
3 years ago
5

Our company is deciding whether to invest in a new machine. The new machine will increase cash flow by $324,000 per year. You be

lieve the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $1,740,000. The cost of the machine will decline by $110,000 per year until it reaches $1,190,000, where it will remain.
a. If your required return is 13 percent, calculate the NPV today?

b. If your required return is 13 percent, calculate the NPV if you wait to purchase the machine until the indicated year. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

NPV

Year 1 $

Year 2 $

Year 3 $

Year 4 $

Year 5 $

Year 6 $
Business
1 answer:
Elza [17]3 years ago
7 0

Answer:

Initial Investment= -1740000

Year 1 324,000/1.13= 286725

Year 2 324,000/1.13^2= 253740

Year 3 324,000/1.13^3= 224548

Year 4 324,000/1.13^4=198715

Year 5 324,000/1.13^5= 175854

Year 6 324,000/1.13^6= 155623

Year 7 324,000/1.13^7=137720

Year 8 324,000/1.13^8= 121876

Year 9 324,000/1.13^9=  107855

Year 10 (324,000+1,190,000)/1.13^10= 446007

=2,108,663-1,740,000= 368663

Explanation:

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An investor invests $4,000 to buy 200 shares of Sand Corporation, which has an expected return of 24%; $2,000 to buy 100 shares
Anni [7]

Answer:

Expected return = 28%

Explanation:

given data

invests $4,000

share = 200

return = 24%

and

invests = $2000

share = 100

return = 18%

and

invest = $4,000

share = 400

return = 28%

to find out

expected return on this portfolio

solution

we know total investment is

Total investment = 4000+2000+4000

Total investment = 10000

and

Wt. of Sand Corporation shares in the total portfolio= \frac{4000}{10000} =  0.4

Wt. of Water Corporation shares in the total portfolio=\frac{2000}{10000} =  0.2

Wt. of Beach Corporation shares in the total portfolio=\frac{4000}{10000} =  0.4

and

Expected return on the given portfolio is

Expected return = 0.4 × 24% + 0.4 × 18% + 0.4 × 28%

Expected return = 28%

5 0
3 years ago
If your company matches 75 cents on the dollar,and you contribute $200 a paycheck, how much will your employee match?
mihalych1998 [28]
I’m not sure but roughly 2.66. PLEASE don’t get mad if I’m wrong
4 0
2 years ago
Paris operates a talent agency as a sole proprietorship,and this year she incurred the following expenses in operating her talen
Juliette [100K]

Answer:

A) $450.

Explanation:

The computation of the total deductible amount of the expenses is as follows:

In the case of the deduction with respect to the meal cost and entertainment. Only the half of the expense would be deducted i.e. for the business meeting

As in the question the opera tickets is $900 so the half of $900 i.e. $450 would be allowed as a deduction

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6 0
2 years ago
All companies operate in a broad ______-environment that is made up of six components, including political factors and technolog
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4 0
1 year ago
Renue Spa had the following balances at December 31, Year 1: Cash of $15,000, Accounts Receivable of $61,000, Allowance for Doub
Phoenix [80]

Answer:

Explanation:

provision For Doubtfull Accounts Yr.3

Opening Bal.                                        =                         3,750

For the Year (215000*2%)                   =                          4300

Write-off                                                =                        -2100

Closing Balance (3750+4300-2100)  =                        5950

Account Recievable For Yr.3

Opening Bal.                                        =                         61000

Sales For the Year (215000*2%)         =                          215000

Provision For the Year                         =                        -4300

Cash Recived from Debtors                =                        218000

Closing Balance                                   =                        53700

Net Realizable Value of Recievables

Closing Debtors                                    =              53700  

Closing Provision                                  =              -5650

Net Realizable Value                             =             47750

C) Collectible Amount              

Provision For the Year                          =            4300

Previously writte of recoverred          =            -500

Total bad debts for the year                 =            3800    

5 0
3 years ago
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