\\& 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 ` YesBulov Bulov X a Amaz X bulove x Bulov -> C https:/ewconnect.mheducation.com/flow/connect.html Homework #04 Gi Saved 8 The technique for calculating a bid price can be extended to many other types of problems. Answer the following questions using the same technique as setting a bid price; that is, set the project NPV to zero and solve for the variable in question. Guthrie Enterprises needs someone to supply it with 155,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you've decided to 10 bid on the contract. It will cost $1,950,000 to install the equipment necessary to start points production; you'll depreciate this cost straight-line to zero over the project's life. You estimate that in five years this equipment can be salvaged for $165,000. Your fixed Skipped production costs will be $280,000 per year, and your variable production costs should be $10.90 per carton. You also need an initial investment in net working capital of $145,000. The tax rate is 25 percent and you require a return of 14 percent on your eBook investment. Assume that the price per carton is $17.50. Print a. Calculate the project NPV. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the minimum number of cartons per year that can be supplied and still break even? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c. What is the highest fixed costs that could be incurred and still break even? (Do not 32.16.) round intermediate calculations and round your answer to 2 decimal places, e.g., NPV Quantity of cartons Fixed costshttps:/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
