Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The management of Peni'old Corporation is considering the purchase ofa machine that would cost $350,000. would last for 5 years. and would have no salvage
The management of Peni'old Corporation is considering the purchase ofa machine that would cost $350,000. would last for 5 years. and would have no salvage value. The machine would reduce labor and other costs by $82,000 per year. The company requires a minimum pretax return of12% on all investment projects. Click here to View Exhibit iZB-i and Exhibit 123-2, to determine the appropriate discount factor(s) using the tables provided. The net present value ofthe proposed project is closest to (Ignore income taxes): (Round your intermediate calculations and final answer to the nearest whole dollar amount.) Multiple Choice 0 354.390) $34,390) 0 O $(65,730| O $(43,oso) Crowl Corporation is investigating automating a process by purchasing a machine for $794700 that would have a 9 year useful life and no salvage value By automating the process. the company would save $131500 per year in cash operating costs. The new machine would replace some old equipment that would be sold for scrap now, yielding $21,300' The annual depreciation on the new machine would be $88,300. The simple rate of return on the investment is closest to (Ignore income taxes): Multiple Choice 0 11.13% 'l6 73% 5.13% O O 584% O Joanette, Incorporated. is considering the purchase ofa machine that would cost $620,000 and would last for 10 years. at the end of which. the machine would have a salvage value of $62,000. The machine would reduce labor and other costs by $122000 per year. Additional working capital of $8,000 would be needed immediately, all ofwhich would be recovered at the end of10 years. The company requires a minimum pretax return oi16% on all investment projects. (Ignore income taxes.) Click hereto View Exhibit 123-1 and Exhibit 123-2, to determine the appropriate discount factor(s) usmg the tables provided. Required: Determine the net present value of the project. {Negative amount should be indicated by a minus sign. Round your intermediate calculations and final answer to the nearest whole dollar amount.) :I The management olexon Corporation is investigating purchasing equipment that would cost $526,000 and have a 7 year life with no salvage value. The equipment would allow an expansion of capacity that would increase sales revenues by $368,000 per year and cash operating expenses by $213,000 per year. (Ignore income taxes.) Required: Determine the simple rate of return on the investment. (Round your answer to 1 decimal place.) _:|E
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