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The NPV (rent the machine) is __ ( round to the nearest dollar) The NPV (purchase the current machine) is __ ( round to the
The NPV (rent the machine) is __ ( round to the nearest dollar)
Big Rock Brewery Currently rents a bottling machine for $54,000 per year, including all maintenance expenses. The company is considering purchasing a machine Instead and is companing two alternate options: option is to purchase the machine is currently renting for $160,000, which will require $23,000 per year in ongoing maintenance expenses, or option, which is to purchase a now more advanced machine for $265.000, which was require $15,000 per year in ongoing maintenance expenses and will lower bottling costs by $12.000 per year. Also $37,000 will be spent upfront in training the new operators of the machine. Suppose the appropriate discount fate is 7% per year and the machine is purchased today. Maintenance and botting couts are paid at the end of each year, as is the rental of the machine Assume niso that the machines are subject to a OCA rate of 40% and there will be a negligible salvage value in 10 years time the end of each machine's life) The marginal corporate tax rates 30% Should Big Rock Brewery continue to rent purchase its current machine, or purchase the advanced machine to make this decision calculate the NPV of the FCF asociated with each storative. (Note: the NPV will be negative, and represents the PV of the cost of the machine in each one The NPV treat the machines (Round to the nearest color) Big Rock Brewery Currently rents a bottling machine for $54,000 per year, including all maintenance expenses. The company is considering purchasing a machine Instead and is companing two alternate options: option is to purchase the machine is currently renting for $160,000, which will require $23,000 per year in ongoing maintenance expenses, or option, which is to purchase a now more advanced machine for $265.000, which was require $15,000 per year in ongoing maintenance expenses and will lower bottling costs by $12.000 per year. Also $37,000 will be spent upfront in training the new operators of the machine. Suppose the appropriate discount fate is 7% per year and the machine is purchased today. Maintenance and botting couts are paid at the end of each year, as is the rental of the machine Assume niso that the machines are subject to a OCA rate of 40% and there will be a negligible salvage value in 10 years time the end of each machine's life) The marginal corporate tax rates 30% Should Big Rock Brewery continue to rent purchase its current machine, or purchase the advanced machine to make this decision calculate the NPV of the FCF asociated with each storative. (Note: the NPV will be negative, and represents the PV of the cost of the machine in each one The NPV treat the machines (Round to the nearest color) The NPV (purchase the current machine) is __ ( round to the nearest dollar)
The NPV (purchase the advanced machine) is __ ( round to the nearest dollar)
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