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Lapatulllka [165]
2 years ago
7

He Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $830,000,

and it would cost another $23,500 to install it. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $467,000. The MACRS rates for the first three years are 0.3333, 0.4445, and 0.1481. The machine would require an increase in net working capital (inventory) of $18,000. The sprayer would not change revenues, but it is expected to save the firm $360,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 25%. (Ignore the half-year convention for the straight-line method.) Cash outflows, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest dollar.
What is the Year-0 net cash flow?

$

What are the net operating cash flows in Years 1, 2, and 3?

Year 1: $
Year 2: $
Year 3: $
What is the additional Year-3 cash flow (i.e, the after-tax salvage and the return of working capital)?

$

If the project's cost of capital is 14%, what is the NPV of the project?

$

Should the machine be purchased?


-Select-
Business
1 answer:
omeli [17]2 years ago
3 0
Blank blank blank to the power of two
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Fuhremann Co. is a full-service manufacturer of surveillance equipment. Customers can purchase any combination of equipment, ins
Eddi Din [679]

Answer:

Equipment transaction price is $72,000

Installation transaction price $5,600

Training transaction price is $2,400

Explanation:

The transaction price of $80,000 should be allocated to the equipment,installation and training based on the individual stand-alone prices of each as calculated below:

Transaction price of an item=transaction price*item stand-alone price/total of stand-alone prices

transaction price is $80,000

total stand-alone prices=$90,000+$7000+$3000

                                      =$100,000

Equipment transaction price=$80,000*$90,000/$100,000

                                               =$72,000

Installation transaction price=$80,000*$7000/$100.000

                                               =$5,600

Training transaction price=$80,000*$3000/$100,000

                                          =$2,400

8 0
3 years ago
Which of the following statements is correct about planning a successful conversion to Lean/Just-in-time operations. Multiple ch
Dvinal [7]

Answer:

Management and employees must be convinced of benefit and receive training prior to conversion to avoid obstacles.

Explanation:

A lean business is a business concept used by organizations to eliminate waste and maximize value for growth and development. The lean business concept include the following;

I. A total quality management (TQM): it is a management framework that is focused on achieving long-term success through the satisfaction of your customers by the efforts of all the member of staff in an organization.

II. A continuous improvement (CI): it is a management technique that is focused on improving manufacturing processes, products and services through the elimination of redundancy and time-wasting activities in an organization.

III. Just-in-time (JIT): it is a management framework that is focused on cutting manufacturing costs and increase efficiency between suppliers and consumers through the use of a proper inventory system.

Additionally, lean production is a manufacturing methodology that is focused on integrating activities that are designed to provide massive quantity with high quality production using minimal resources, raw materials, finished products and work-in-process features.

This ultimately implies that, lean production is basically a supply management process aimed at elimination of waste as much as possible and it requires a mutual agreement between the management and employees, as well as proper training of the employees (workers) before implementing the conversion.

Hence, the statement which is correct about planning a successful conversion to Lean/Just-in-time operations is that both management and employees must be convinced of benefit and receive training prior to conversion to avoid obstacles.

6 0
3 years ago
As a financial analyst, you are tasked with evaluating a capital-budgeting project. You were instructed to use the IRR method, a
Vilka [71]

Answer: 9.25%

Explanation:

The Capital Asset Pricing Model (CAPM) can be used to find the expected return of a project which is another term for the hurdle rate. This can then be used in the IRR method.

Formula is;

Hurdle Rate = Risk free rate + Beta( Market rate of return - risk free rate)

Hurdle Rate = 4% + 0.75( 11% - 4%)

Hurdle Rate = 4% + 5.25%

Hurdle Rate = 9.25%

7 0
3 years ago
Making a profit by lending money is ____________.
Rzqust [24]
The right answer for the question that is being asked and shown above is that: "d. manufacturing." Making a profit by lending money is <span>d. manufacturing 
</span>
The right answer for the question that is being asked and shown above is that: "a. individual" In a market economy, land, labor, as well as capital, are controlled by the <span>a. individual</span>
5 0
3 years ago
What is the value of $1000 investment that loses 5% each year for eight years
nadya68 [22]

Answer:

$663.420

Explanation:

The value for the investment is the future of $1000, earning a compound interest of -5% for eight years.

The formula for compound interest is as below.

FV = PV × (1+r)^n

Fv = $1000 x ( 1 + (-5/100)^8

Fv= $1000 x (1 +(-0.05)^8

FV= $1000 x (0.95)^8

Fv=$1000x 0.6634204

Fv=$663.420

The value will be $663.42

8 0
3 years ago
Read 2 more answers
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