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diamong [38]
2 years ago
12

Omaha Plating Corporation is considering purchasing a machine for $1,500,000. The machine is expected to generate a constant aft

er-tax income of $100,000 per year for 15 years. The firm will use straight-line (SL) depreciation for the new machine over 10 years with no residual value. What is the payback period for the new machine?
Business
1 answer:
RoseWind [281]2 years ago
5 0

Answer:

The payback period for the new machine is 6 years.

Explanation:

depreciation = $1,500,000/10

                     = $150,000

payback period = ($100,000 + $150,000)/$1,500,000

                           = 6 years

Therefore, The payback period for the new machine is 6 years.

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A 2-year bond with par value $1,000 making annual coupon payments of $106 is priced at $1,000. a. What is the yield to maturity
shutvik [7]

Answer:

Explanation:

Face value = 1000

market price = 1000

annual yield = 106

yield to maturity = (106/1000) x 100

= 10.6 % .

8 0
3 years ago
The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to the treasurer, Monty Goldstein, "This is a
Alik [6]

Answer:

IRR = 13.05%

Explanation:

using an excel spreadsheet, the cash flows are:

year 0 = -$3,200,000

year 1 = $425,000

year 2 = $425,000 x 1.08 = $459,000

year 3 = $459,000  x 1.08 = $495,720

year 4 = $535,378

year 5 = $578,208

year 6 = $624,464

year 7 = $674,422

year 8 = $728,375

year 9 = $786,645

year 10 = $849,577

year 11 = ($849,577  x 1.08) - $480,000 = $917,543 - $480,000 = $437,543  

IRR = 13.05%

The internal rate of return (IRR) is the discount rate at which a project's NPV (net present value) would equal $0.

6 0
3 years ago
A firm has the following accounts and financial data for 2007:
Oksi-84 [34.3K]

Answer:

The correct answer is $302.40.

Explanation:

According to the scenario, the computation can be done as:

To calculate firms' earning first we less cost of goods and total operating expenses from sales revenue:

= $3,060 - $1,800 - 600

= $660

Now we deduct the interest expense, then

= $660 - $126

= $534

Now we deduct tax rate, then

= $534 × $213.60    ( $534× 40%)

= $320.40

Now we finally deduct the dividends to get the firm's earning to common shareholder's, then

= $320.40 - 18

= $302.40

Hence, the firm's earning to common shareholder's is $302.40.

5 0
3 years ago
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3 years ago
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