1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
8090 [49]
3 years ago
5

Lamping, Inc., is considering the purchase of a machine that would cost $520,000 and would last for 7 years, at the end of which

, the machine would have a salvage value of $52,000. The machine would reduce labor and other costs by $112,000 per year. Additional working capital of $6,000 would be needed immediately, all of which would be recovered at the end of 7 years. The company requires a minimum pretax return of 14% on all investment projects. (Ignore income taxes).
Required:
Determine the net present value of the project.
Business
1 answer:
balu736 [363]3 years ago
3 0

Answer:

Lamping, Inc.

The net present value of the project is:

= ($22,544)

Explanation:

a) Data and Calculations:

Cost of machine = $520,000

Useful life of machine = 7 years

Salvage value = $52,000

Cost savings = $112,000 per year

Initial working capital $6,000

Recovered working capital = $6,000

Minimum required pretax return = 14%

PV of initial costs = $526,000 ($520,000 + $6,000)

PV of costing savings (annuity) = $480,256 ($112,000 * 4.288)

PV of salvage and recovered working capital = $23,200 ($58,000 * 0.400)

Total savings/benefits = $503,456 ($480,256 + $23,200)

NPV = ($22,544)

You might be interested in
When a third party knows that an agent is acting on behalf of a principal, but does not know the identity of the principal, the
Amanda [17]
Partially disclosed or unidentified
5 0
3 years ago
A good cover letter should only address your ability to perform __________ skills that the employer is seeking.
aalyn [17]

Answer: b. three or four

Explanation:

Cover letters are meant to introduce the applicant for the role in a manner that would inspire the recruiter to want to take their applicant further in the recruitment process.

As such, the applicant should include some selling points to encourage this. One of said selling points is the possession of the skills that the role in question requires. A good number to possess/include in the letter is three to four of said skills because anything less might be too little and anything more might inspire distrust.

7 0
3 years ago
How much does it cost to convert a shed into a house?
Firdavs [7]
It take a lot because a house is bigger the a shed
7 0
3 years ago
Definition: created in 1935 under the new deal, it aimed to stimulate the economy during the great depression and preserve the s
FinnZ [79.3K]
WPA is the answer to the question

3 0
3 years ago
A. Is a detailed statement of receipts and expenditures for a period of time in the future
Orlov [11]

Answer

A detailed statement of receipts and expenditure for a period of time in the future is called a Budget

Explanation

An estimate of revenue and expenses over a particular future period of time is referred as the budget. A budget can be made for a family, for an individual or a business entity. In companies, budget is utilized as an internal tool of management.


3 0
3 years ago
Other questions:
  • On November 19, Nicholson Company receives a $24,600, 60-day, 10% note from a customer as payment on account. What adjusting ent
    6·1 answer
  • When people with lower incomes pay lower taxes, this represents the role of government called _____. supervisory body source of
    8·1 answer
  • Woody Corporation acquired 70% of Buzz Company’s voting common stock on January 1, 20X3, for $158,900. Buzz reported common stoc
    7·1 answer
  • A firm with an A rating plans to issue one million units of a 10 year-4% bond with face value $100. After the financial crisis t
    10·1 answer
  • A social sciences researcher wants to know about the amount of money that couples without children spend on leisure travel. Her
    12·1 answer
  • Which market structure has a single company or seller in a market with many barriers to entry
    7·1 answer
  • A written customer complaint is received by mail about an error made by the firm that the firm resolves to the customer's satisf
    15·1 answer
  • Question 10 of 15 A tax-sheltered annuity is a special tax-favored retirement plan available to ACertain age groups only. BCerta
    12·1 answer
  • Cecilia has studied economics and knows about the value and investment potential of diamonds. the price of diamonds has recently
    14·3 answers
  • Many older companies have changed from a defined-benefit plan to a(n) ________, which is a retirement plan where workers are cre
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!