Answered step by step
Verified Expert Solution
Question
1 Approved Answer
just need the answers please Crane Inc. manufactures snowsuits. Crane is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing
just need the answers please
Crane Inc. manufactures snowsuits. Crane is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased 5 years ago at a price of $1.8 million; six months ago, Crane spent $55,000 to keep it operational. The existing sewing machine can be sold today for $240,450. The new sewing machine would require a one-time, $85,000 training cost. Operating costs would decrease by the following amounts for years 1 to 7: Year 1 $390.900 2 399,800 3 410,100 4 425,400 5 434,000 6 434,900 7 436,400 The new sewing machine would be depreciated according to the declining balance method at a rate of 20%. The salvage value is expected to be $379,100. This new equipment would require maintenance costs of $94.000 at the end of the fifth year. The cost of capital is 9% Click here to view the factor table. Use the net present value method to determine the following: (If net present value is negative then enter with negative sign preceding the number e.g. -45 or parentheses 6.8.(45). Round present value answer to decimal places, es. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Calculate the net present value Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started