FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A company is considering buy a piece of equipment for $250,000. If purchased, the equipment will increase revenue by $57,845 each year for six years.

image text in transcribed

A company is considering buy a piece of equipment for $250,000. If purchased, the equipment will increase revenue by $57,845 each year for six years. The company's cost of capital is 11%. Ignore depreciation and taxes. a. What is the Net Present Value of the equipment? b. Should the company buy the equipment? 6 periods PV of $1 FV of $1 PV annuity FV annuity 11% 0.53464 1.870414.23054 7.91286

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing A Practical Approach

Auditing A Practical Approach

Authors: Robyn Moroney, Fiona Campbell, Jane Hamilton, Valerie Warren

3rd Canadian edition

1-119-40285-5, 111940276X, 978-1119566007

More Books

Students also viewed these Accounting questions

Question

★★★★★
A student compared organic food prices at Target and Whole Foods. The same items were priced at each store. The first three items are shown in Figure A. Choose the correct output (B or C) for the...

Answered: 1 week ago

Question

★★★★★
consider the use of electronically obtained qualitative data;

Answered: 1 week ago

Question

★★★★★
How is the accuracy of an estimator measured?

Answered: 1 week ago

Question

★★★★★
Rhodes parked his car in the self-service park-and-lock lot of Pioneer Parking Lot, Inc. The ticket that he received fromthe ticketmeter stated the following: NOTICE. THIS CONTRACT LIMITS OUR...

Answered: 1 week ago

Question

★★★★★
2 3 . _ _ _ _ _ _ _ _ _ _ is not used as a material of construction in thermocouples. Alumel Rhodium Constantan Duralumin

Answered: 1 week ago

Question

★★★★★
The 9 companies are drawn from the following 9 different industries: Liquor producer and distributor Discount airline Commercial bank (items fitted into the same categories as the non-financial...

Answered: 1 week ago

Question

★★★★★
Mini-Case B: (4.5 marks) Anthony was supposed to graduate from C in April 2020 but realized he was missing a course to graduate. He took FINA 200 in the summer and started a full-time job on...

Answered: 1 week ago

Question

★★★★★
1. Calculate the mean, standard deviation, and n for the data given. 2. An experiment was run by the Soho County School District that suggested having a routine sleep schedule improved average grades...

Answered: 1 week ago

Question

★★★★★
Disrupt yourself by Eric Ries Nine Ways Leaders Should React To Unexpected Negative Feedback DR. ROBERT PEARL AND THE PERMANENTE MEDICAL GROUP OF NORTHERN CALIFORNIA: A LESSON IN STRATEGIC LEADERSHIP...

Answered: 1 week ago

Question

★★★★★
The trial balance for Skylar plc as at 31 October 20X7 is shown below. '000 '000 Share capital 15,000 Trade payables 3,348 Trade receivables 10,254 Accruals at 31 October 20X7 387 5% bank loan...

Answered: 1 week ago

Question

★★★★★
Exercise 10-6 Various liabilities LO2 Designer Architects had the following additional information at its November 30, 2020 year-endi a. The Unearned Revenue account showed a balance of $74,000,...

Answered: 1 week ago

Question

★★★★★
The following statements were printed in journal articles in the field of psychology. Explain to a person who is unfamiliar with the concept of confidence intervals what each statement means. "The...

Answered: 1 week ago

Question

★★★★★
4.24 Your school Ping-Pong team is not performing very well this season. After some rough calculations, you found out that your teams probability of winning a game is about 0.45. A fellow team member...

Answered: 1 week ago

Question

★★★★★
4.25 A professor teaches a large class and has scheduled an examination for 7:00 p.m. in a different classroom. She estimates the probabilities in the table for the number of students who will call...

Answered: 1 week ago

Question

★★★★★
4.23 A student needs to know details of a class assignment that is due the next day and decides to call fellow class members for this information. She believes that for any particular call, the...

Answered: 1 week ago

Previous Question Next Question