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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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Vanessa bought a house for $268,500. She has a 30 year mortgage with a fixed rate of 6.25%. Vanessaâs monthly payments are $1,59
Musya8 [376]

Answer:

Ans. A) $9,314.45

Explanation:

Hi, first we have to bring to present value the monthly payments to be made for 30 years (360 months). In order for this to be useful, we have to convert this annua compounded monthly rate (6.25%) to an effective rate, that is 6.25% / 12 = 0.5208%. Now, when we find this present value, we are going to substract it from the price of the house and that is the value of the down payment. But let´s just go ahead and do it together.

We have to use this formula to bring to present value the $1,595.85 monthly payments, for 30 years (360 months) at a rate of 6.25% (0.5208% monthly).

PresentValue=\frac{A((1+r)^{n}-1) }{r(1+r)^{n} }

It should look like this

PresentValue=\frac{1,595.85((1+ 0.005208 )^{360}-1) }{0.005208(1+0.005208)^{360} }

Present Value=259,185.55

Now, let´s go ahead and find the down payment.

DownPayment=Price-PresentValue

DownPayment=268,500-259,185.55= 9,314.45

So, the answer is a). $9,314.45

Best of luck.

5 0
3 years ago
This a type of unemployment that always exists and are relatively stable over time, including seasonal, structural, and friction
Darya [45]

<u>Answer: </u>Natural unemployment

<u>Explanation:</u>

Natural unemployment always exists even in a healthy economy this is because the people keep changing their jobs and they even leave the current job in search of the new ones. Natural unemployment also includes other types of unemployment such as seasonal, structural and frictional unemployment types.

Also some people might possess skills that are not necessary in the labor market. The natural unemployment is still in the economy even when there is technological advancement, industry expansion. New labor forces enter into market every year and people search jobs for better opportunities.

6 0
3 years ago
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For an airline, which of the following would not be an operational budget? A cash receipts budget of flying consumers. A budget
katrin [286]

Answer:

A cash receipts budget of flying consumers.

Explanation:

Operational budget is defines as all the profits and expenses a business realises as a result of planning it's operations.

Usually an operational budget is set before activities begin, and is a target to be achieved.

For an airline cash receipts of flying customers is not a revenue realised as a result of planning operations, so this is the correct answer.

However a fuel budget, material budget for parts, and labour budget for flight crew are operational budgets.

4 0
3 years ago
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After six months with the company, betty's performance was evaluated by a graphic rating form. the ratings for each statement we
erik [133]
The correct answer that would best complete the given statement above would be option 1. objective. Based on the given situation above about how Betty's performance was evaluated, Betty experienced an objective appraisal method. It is objective since it is based on graphic rating forms. Hope this answer helps.
6 0
3 years ago
A bond with 15 detachable warrants has just been offered for sale at $1,000.00 . The bond matures in 25 years and pays a semi-an
ad-work [718]

Answer:

$15.64

Explanation:

first we must determine the market value of the bond without the warrants:

PV of face value = $1,000 / (1 + 3.5%)⁵⁰ = $179.05

PV of coupon payments = $25 x 23.45562 (PV annuity factor, 3.5%, 50 periods) = $586.39

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the market value of the 15 warrants = $1,000 - $765.44 = $234.56

market value per warrant = $234.56 / 15 = $15.64

6 0
3 years ago
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