Do not
https:/ewconnect.mheducation.com/flow/connect.html Homework #04 Gi Saved 4 You are evaluating two different silicon wafer milling machines. The Techron | costs $297,000, has a 3-year life, and has pretax operating costs of $82,000 per year. The Techron II costs $515,000, has a 5-year life, and has pretax operating costs of $55,000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $59,000. If your tax rate is 23 percent and 10 your discount rate is 11 percent, compute the EAC for both machines. (A negative points answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Skipped Techron I eBook Techron II Print Which machine do you prefer? O Techron II O Techron I\\& https : / / newconnect . mheducation . com / flow / connect . html Homework # 04 { Saved Paul Restaurant is considering the purchase of a $10 . 800 souffle maker . The souffle* maker has an economic life of 8 years and will be fully depreciated by the straight - line method . The machine will produce 1 . 300 souffles per year , with each costing $2.50 to make and priced at $ 4 . 90 . The discount rate is 9 percent and the tax rate is 2 2 percent . 10 What is the NPV of the project ? ( Do not round intermediate calculations and round points your answer to 2 decimal places , e . g. . 32.16 . ) Skipped NPV @BOOK Print Should the company make the purchase ?" NO ` Yesnnect.html Homework #04 Saved 6 A firm is considering an investment in a new machine with a price of $16.5 million to replace its existing machine. The current machine has a book value of $6.2 million and a market value of $4.9 million. The new machine is expected to have a 4-year life, and the old machine has four years left in which it can be used. If the firm replaces the old machine with the new machine, it expects to save $6.7 million in operating costs each 10 year over the next four years. Both machines will have no salvage value in four years. If poin the firm purchases the new machine, it will also need an investment of $330,000 in net working capital. The required return on the investment is 12 percent and the tax rate is 23 percent. The company uses straight-line depreciation. eBook Print What is the NPV of the decision to purchase a new machine? (Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to 2 decimal places, e.g., 1,234,567.89.) What is the IRR of the decision to purchase a new machine? (Do not round intermediate 32.16.) calculations and enter your answer as a percent rounded to 2 decimal places, e.g., What is the NPV of the decision to purchase the old machine? (A negative amount should be indicated by a minus sign. Do not round intermediate calculations and 1,234,567.89.) enter your answer in dollars, not millions, rounded to 2 decimal places, e.g., What is the IRR of the decision to purchase the old machine? (A negative amount should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. ) New machine NPV New machine IRR % Old machine NPV Old Machine IRR %
