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pls work in excel FIN 4333 Chapter 6B Homework 1. Consider a factory that produces writing pens. The factory has an old piece of equipment,
pls work in excel
FIN 4333 Chapter 6B Homework 1. Consider a factory that produces writing pens. The factory has an old piece of equipment, and the factory owner is considering replacing the old equipment with a new machine. The owner has gathered the following information: Cost to purchase the machine is $150,000.00 Variable cost savings per produced pen: $0.06 Fixed cost per year $30,000.00 Life span: 10 years Number of pens expected to sell per year 500,000 The factory sells each writing pen for $0.20 The company's discount rate is 12% and their corporate tax rate is 25%. The purchase of the machine occurs at year 0 and subsequent cash flows occur from years 1 through 10. Assume 5-year MACRS depreciation. Assume no investment in net working capital. There is no salvage value. Should the owner purchase this new machine? Additionally, construct a two-way data table to show how the decision variable (i.e., the variable used to assess whether to purchase the machine or not) changes for different pen cost savings per unit and different discount rates. FIN 4333 Chapter 6B Homework 1. Consider a factory that produces writing pens. The factory has an old piece of equipment, and the factory owner is considering replacing the old equipment with a new machine. The owner has gathered the following information: Cost to purchase the machine is $150,000.00 Variable cost savings per produced pen: $0.06 Fixed cost per year $30,000.00 Life span: 10 years Number of pens expected to sell per year 500,000 The factory sells each writing pen for $0.20 The company's discount rate is 12% and their corporate tax rate is 25%. The purchase of the machine occurs at year 0 and subsequent cash flows occur from years 1 through 10. Assume 5-year MACRS depreciation. Assume no investment in net working capital. There is no salvage value. Should the owner purchase this new machine? Additionally, construct a two-way data table to show how the decision variable (i.e., the variable used to assess whether to purchase the machine or not) changes for different pen cost savings per unit and different discount rates Step by Step Solution
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