Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please draw flow cash The company plans to buy one new machine, where it will take on a 20% loan and 80% of common shares.

please draw flow cash
image text in transcribed
The company plans to buy one new machine, where it will take on a 20% loan and 80% of common shares. The company receives dividends at an interest rate of 3% per annum. The company borrows from 2 banks equally, the first bank has an interest rate of 12% per year compounded every quarter. Bank 2 has a 4% interest rate per quarter compounded every month. Machine 1 Machine 2 Machine Price ($) 150,000 250,000 Revenue (Per year) 50,000 in the first year, 100,000 in the first two year, add 80,000 in the following year 20,000 per year in the following year 45,000 85,000 Operating expenses Salvage Value 35,000 70,000 Service life 4 6 Which machine would you buy if the MARR was equal to the mean of your investment in weight (MARR = WAC)

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

Will You Be My Internal Audit Manager

Authors: Benito Gross

1st Edition

B09774C8CK, 979-8521636563

More Books

Students also viewed these Accounting questions

Question

Differentiate between an IPO and an LBO.

Answered: 1 week ago

Question

8. Explain the contact hypothesis.

Answered: 1 week ago

Question

2. Define the grand narrative.

Answered: 1 week ago