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need help with this and must put it in excel and show formulas please Intro The Weather Company manufactures and sells 100,000 umbrellas per year
need help with this and must put it in excel and show formulas please
Intro The Weather Company manufactures and sells 100,000 umbrellas per year at an average price of $20. It currently uses a machine that makes each umbrella at a variabe cost of $10. The machine has a book value of $100,000 and has 5 years left in its economic and accounting life. Its annual depreciation is $20,000. It could be sold now for $80,000, but won't have any value in 5 years. The company could replace the old machine with a new machine that costs $800,000. The new machine produces the same number of umbrellas at a variable cost of $9, has a life span of 5 years and is to be depreciated on a straight-line basis to a salvage value of $80,000. Since the machine can make higher-quality umbrellas, the average sale price would increase to $22 The project's discount rate is 9% and the company's marginal tax rate is 21% Attempt 130 for 10 pts. Part 1 What is the annual cash flow in years 1 to 5 with the new machine? 0+ decimals Submit Attempt 1/30 for 10 pts. Part 2 What is the cash flow from salvage value from selling the old machine now? 0+ decimals Submit Part 3 Attempt 1/30 for 10 pts. What is the NPV of selling the old machine and buying the new machine (ignore the old machine otherwise, i.e., don't calculate incremental cash flows)? 0+ decimals Submit Part 4 Attempt 1/30 for 10 pts. What is the NPV of replacing the machine instead of keeping the old one? 0+ decimals SubmitStep by Step Solution
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