Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

no excel show calculations 4. (20 points Many Chemicals Unlimited purchases a computer-controlled filter for $100,000. Half of the purchase price is borrowed from a

image text in transcribed

no excel show calculations

4. (20 points Many Chemicals Unlimited purchases a computer-controlled filter for $100,000. Half of the purchase price is borrowed from a bank at 15% compounded annually, and the rest will be financed with company's own money (still need to be included in the cash flow). The loan is to be paid back with 5 equal principal payments plus interest over a 5-year period. The filter is expected to last 10 years, at which time it will have a salvage value of $10,000. Over the 10-year period operating and maintenance costs are anticipated to equal $20,000 year; however, by making the investment, annual fines of $50,000 for pollution will be avoided. The firm expects to earn 12% on its investments. Determine each of the following measures of investment worth and state whether or not the filter purchase was economically sound a) Present worth b) Annual worth c Future worth d) Internal rate of return e External rate of return

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

Step: 3

blur-text-image

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

Profit First For Dentists Proven Cash Flow Strategies For Financial Freedom

Authors: Barbara Stackhouse, Drew Hinrichs, Mike Michalowicz

1st Edition

1735907804, 978-1735907802

More Books

Students also viewed these Accounting questions

Question

x-3+1, x23 Let f(x) = -*+3, * Answered: 1 week ago

Answered: 1 week ago

Question

3. List ways to manage relationship dynamics

Answered: 1 week ago