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
Akimi4 [234]
2 years ago
10

Bruno's is analyzing two machines to determine which one it should purchase. The company requires a rate of return of 14.6 perce

nt and uses straight-line depreciation to a zero book value over a machine's life. Ignore bonus depreciation and taxes. Machine A has a cost of $318,000, annual operating costs of $8,700, and a life of 3 years. Machine B costs $247,000, has annual operating costs of $9,300, and a life of 2 years. Whichever machine is purchased will be replaced at the end of its useful life. Which machine should Bruno's purchase and why
Business
1 answer:
Dimas [21]2 years ago
5 0

Answer:

Machine A; because it will save the company about $13,406 a year

Explanation:

The computation is shown below:

Equate Annual Cost = PV of Cash Outflow ÷  PVAF (r%, n)

For Machine A:

Year            CF          PVF  at 14.6%           Disc CF

0            $3,18,000.00    1.0000                 $3,18,000.00

1              $ 8,700.00   0.8726                 $7,591.62

2             $8,700.00   0.7614               $6,624.45

3 $      8,700.00           0.6644 $      5,780.50

PV of Cash Outflow                               $3,37,996.58

PVAF(14.6%,3)                                          2.2985

PV of Cash Outflow                            $1,47,053.69

For Machine B:

Year             CF                PVF at 14.6%                  Disc CF

0              $2,47,000.00       1.0000                    $2,47,000.00

1                $9,300.00       0.8726                        $8,115.18

2               $9,300.00       0.7614                        $7,081.31

PV of Cash Outflow                                          $2,62,196.49

PVAF(14.6%,2)              1.6340

PV of Cash Outflow     $1,60,459.86

So the machine cost would be purchased as it lower the cost by $13,406.17

You might be interested in
Suppose that the United States currently imports 1.0 million pairs of shoes from China at $20 each. With a 50 percent tariff, th
hichkok12 [17]

Answer:

Trade situation is a win-win game for US consumers as well as US producers and for all the whole world.

Since China is producing cheaper shoes which means US consumers will be gain from Chinese import at a reduced cost and that will result in higher consumer surplus. But because of the tariff, US consumers are at a disadvantage. Due to free trade agreement between US and Mexico, Chinese producers lost as their is tariff in their product which make it to be uncompetitive.

Explanation:

Looking at the difference between importation cost from both Mexico and China,

I.e Consumer Price of Mexican shoes - Consumer Price of Chinese Shoes = $30 - $25 = $5

Which means US consumers are paying $5 extra for Mexican import than Chinese import without tariff

For Chinese product

With the tariff, US consumers were paying ( 1 million * $10 ) = $10 million

Net consumer surplus is -$10 million USD.

For Mexican product

1.2 million * $5 = $6 million

Net Gain

$10 million - $6 million = $4 million.

The Net losses for US Sellers is $6 million

US government is losing all its tariff because of the free trade agreement resulting from Mexican import

1 million * $10 = 10 million

Trade situation is a win-win game for US consumers as well as US producers and for all the whole world.

Since China is producing cheaper shoes which means US consumers will be gain from Chinese import at a reduced cost and that will result in higher consumer surplus. But because of the tariff, US consumers are at a disadvantage. Due to free trade agreement between US and Mexico, Chinese producers lost as their is tariff in their product which make it to be uncompetitive.

6 0
2 years ago
n R&D lab will receive $250,000 when a proposed contract is signed, a $200,000 progress payment at the end of Year 1, and $4
AfilCa [17]

Answer:

$726,370.51

Explanation:

The present value of the contract is the sum of the discounted cash flows.

Present value can be calculated using a financial calculator:

Cash flow in year 0 = $250,000 

Cash flow in year 1 = $200,000 

Cash flow in year 2 = $400,000 

Discount rate = 15%

Present value = $726,370.51

I hope my answer helps you

8 0
3 years ago
What is Pyramid scheme​
Karo-lina-s [1.5K]

Answer:

A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products. As recruiting multiplies, recruiting becomes quickly impossible, and most members are unable to profit; as such, pyramid schemes are unsustainable and often illegal.

Explanation:

4 0
2 years ago
An example of an early economic public policy was:
garri49 [273]
Public<span> works projects of the Great Depression.</span>
5 0
3 years ago
Outsourcing to provide extra workers during periods of peak workloads can be much more economical than trying to fill entire pro
Grace [21]

Answer:

B

Explanation:

6 0
2 years ago
Other questions:
  • Jessica does not believe that the methods and processes for determining salary increases in her company are fair. As per this ex
    13·1 answer
  • Notes or accounts receivables that result from sales transactions are often called A. non-trade receivables.B. trade receivables
    8·1 answer
  • Fayez performs professional services similar to those of a management accountant, while working for the city of portland. fayez
    11·1 answer
  • Driving at slower speeds than traffic flow _____________ .
    6·1 answer
  • The primary objectives of control over inventory are
    7·1 answer
  • A coal mine cost $ 1 comma 001 comma 000and is estimated to hold 57 comma 000tons of coal. There is no residual value. During th
    5·1 answer
  • An investor deposits $2,000 per year (beginning today) for 10 years in a 4% interest bearing account. The last cash flow is rece
    6·1 answer
  • The Chinese political environment is very:
    12·1 answer
  • Fair Oaks Farms’ manure management, specifically the use of cow manure to power their facilities and fuel their milk tankers, is
    15·1 answer
  • INTERVIEW a business owner on the crisis experienced in the workplace attach an interview schedule as part of your oral presenta
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!