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
Radda [10]
3 years ago
7

Galvanized Products is considering purchasing a new computer system for their enterprise data management system. The vendor has

quoted a purchase price of $130,000. Galvanized Products is planning to borrow 1/4th of the purchase price from a bank at 12.00 % compounded annually. The loan is to be repaid using equal annual payments over a 3-year period. The computer system is expected to last 5 years and has a salvage value of $5,200 at that time. Over the 5-year period, Galvanized Products expects to pay a technician $20,000 per year to maintain the system but will save $51,000 per year through increased efficiencies. Galvanized Products uses a MARR of 20.00 %/year to evaluate investments.
What is the present worth of this investment?
Business
1 answer:
alekssr [168]3 years ago
3 0

Answer:

The present worth of this investment = -$31,204.78

Explanation:

Note: See the attached excel file for the calculation of the present worth of this investment (in bold red color).

In the attached excel file, the following are used:

Loan from bank = Purchase price * (1 / 4) = $130,000 * (1 / 4) = $32,500

Initial cost = Purchase price - Loan from bank = $130,000 - $32,500 = $97,500

The annual required equal loan payments is calculated using the formula for calculating loan amortization as follows:

P = (A * (r * (1 + r)^n)) / (((1 + r)^n) - 1) .................................... (1)

Where,

P = Annual required equal loan payment = ?

A = Loan amount from bank = $32,500

r = interest rate = 12%, or 0.12

n = number of payment years = 3

Substituting all the figures into equation (1), we have:

P = Annual required equal loan payment = ($32,500 * (0.12 * (1 + 0.12)^3)) / (((1 + 0.12)^3) - 1) = $13,531.34

From the attached excl file, the present worth of this investment is equal to -$31,204.78

Download xlsx
You might be interested in
A union election was held by the NLRB at Jaxon Industries, and 130 workers cast votes in the election. How many votes in favor o
zimovet [89]

Answer:

66

Explanation:

When union workers vote to elect their representatives, the representative must be elected by a simple majority of the votes. A simple majority means 50% plus 1. In this case 50% of 130 votes = 65 votes plus 1 = 66 votes.

Exclusive representation is a legal status that allows the elected representative the legal right to represent the union workers in different situations, e.g. collective bargaining

7 0
3 years ago
Trade industry short note​
Pie

Answer:

Trade is a basic economic concept involving the buying and selling of goods and services, with compensation paid by a buyer to a seller, or the exchange of goods or services between parties.

6 0
3 years ago
Last year, Hampton Corporation had sales of $1,855,000. The firm's costs of goods sold amounted to 70% of sales. Hampton also pa
jeka57 [31]

Answer:

Tax Liability = $74,550

Explanation:

Particular                                   Amount

Sales                                             $1,855,000

Less: COGS(70% of sales)           <u>$1,298,500</u>

Gross Profit                                   $556,500

Less: Operating expenses           <u>$225,000</u>

Operating profit                            $331,500

Add: Taxable dividend income    $40,000

Add: Capital gain                           $10,000

Less: Interest Expenses                <u>$26,500</u>

Net Taxable Income                      $355,000

Tax rate = $355,000 * 21%  

Tax Liability = $74,550

Note: 21% is the Tax rate approved by the Tax cuts and Job Acts of 2017.

3 0
3 years ago
Prior to setting pricing options for its products to maximize profit, a company must: a. determine whether it should use horizon
Free_Kalibri [48]

Answer: b. select appropriate corporate-level strategies

Explanation:

Prior to setting pricing options for its products to maximize profit, a company must select appropriate corporate-level strategies.

This is necessary in order to ensure that the strategies aligns with what the organization is willing to do in order to achieve its profit maximization goal.

7 0
3 years ago
Which of the following is far more effective, has greater longevity, and has a far wider audience than advertising?
Alecsey [184]

The answer is publicity. Hope I helped!

4 0
3 years ago
Read 2 more answers
Other questions:
  • Geneva, a team manager at Mobile Solutions, needs to inform her subordinates that there will be a round of layoffs at the end of
    7·1 answer
  • Gates entered into a contract with Mennonite Deaconess Home &amp; Hospital for the installation of a new, "one-ply roofing syste
    5·1 answer
  • A firm's ___________ consist of expenditures that must be made before production starts that typically, over the short run, ____
    12·1 answer
  • When a person gains a benefit from a previously unauthorized act of an agent and does not deny the authority to act after learni
    13·1 answer
  • T. Bina and M. Valley are partners with equal capital balances of $50,000 each. They agree to let R. Smith invest $20,000 in the
    15·1 answer
  • In order to formulate strategies that align with the mission some of the activities the organization will need to perform are
    12·1 answer
  • On July 1, of the current year, Robert forms the Yew Corporation. In exchange for 100 percent of the corporation's stock, Robert
    10·1 answer
  • Is stinky caught in 4k hot?
    10·2 answers
  • At Sheridan Electronics, it costs $30 per unit ($16 variable and $14 fixed) to make an MP3 player that normally sells for $49. A
    8·1 answer
  • jingle company signs a 6-month, $20,000 note. stated interest rate is 8% payable at the maturity date. interest incurred on the
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!