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would the company have to experience to make the machine an acceptable investment if the minimum desired rate of return is 1 8 % ?
would the company have to experience to make the machine an acceptable investment if the minimum desired rate of return is
a $
b $
c $
d $
The payback period of an investment is useful in determining its:
a net present value.
b overall profitability.
c acceptability in terms of the length of time until the invested funds are free for use elsewhere.
Jacobs Co is considering buying several specialized tools at a cost of $ The new tools will save the company $ in manufacturing costs each year and are expected to last years. Assume salvage is $ and the tax rate is Jacobs Co uses MACRS Declining Balance method to compute depreciation for income tax purposes. The Declining Balance depreciation rates are: in year in year in year and in year Using a minimum desired aftertax rate of return of the net present value of the tool purchase would be: include the effects of taxes
a $
$
c$
d $
Extra Credit pt: Refer to # above. Assume salvage is $ and that Jacobs uses the straightline method to compute depreciation for tax purposes. For tax purposes, these tools will be depreciated over a year life under the assumption they were purchased midway through the first year and that residual value is $Hint: use depreciation rates of in year in year in year and in year Using a minimum desired aftertax rate of return of the net present value of the tool purchase would be: include the effects of taxes
a$
$
c$
d $
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