Required information Pollution control equipment for a pulverized coal cyclone furnace is expected to cost $190,000 two years from now and another $120,000 3 years from now. If Monongahela Power wants to set aside enough money now to cover these costs, how much must be invested at an interest rate of 9% per year compounded weekly? NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part.
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- Gina Ripley, president of Dearing Company, is considering the purchase of a computer-aided manufacturing system. The annual net cash benefits and savings associated with the system are described as follows: The system will cost 9,000,000 and last 10 years. The companys cost of capital is 12 percent. Required: 1. Calculate the payback period for the system. Assume that the company has a policy of only accepting projects with a payback of five years or less. Would the system be acquired? 2. Calculate the NPV and IRR for the project. Should the system be purchasedeven if it does not meet the payback criterion? 3. The project manager reviewed the projected cash flows and pointed out that two items had been missed. First, the system would have a salvage value, net of any tax effects, of 1,000,000 at the end of 10 years. Second, the increased quality and delivery performance would allow the company to increase its market share by 20 percent. This would produce an additional annual net benefit of 300,000. Recalculate the payback period, NPV, and IRR given this new information. (For the IRR computation, initially ignore salvage value.) Does the decision change? Suppose that the salvage value is only half what is projected. Does this make a difference in the outcome? Does salvage value have any real bearing on the companys decision?Purchasing a new boiler machine will cost $90,000 and acquiring this machine can lessen the current electricity consumption by as much as twenty percent. The estimated annual maintenance cost for a new boiler machine is 5% of its price. Current annual electricity bill is $180,000. If there will be no salvage value at the end of 6 years and Company A sets MARR = 12% per year, would it be worthwhile to invest in this new machine? Use FW to evaluate this investment.New windows are expected to save $950 per year in energy costs over their 30-year life for Fab Fabricating. At an initial cost of $12,000 and zero salvage value. What is the internal rate of return? Note: If Fab's MARR is 8 percent. Does the IRR provide a good deal? (No response required just think about what this means)
- Give me right solution according to the question.... Help me urgenttttttttt Installing an automated production system costing $278,000 is initially expected to save Zia corporation $52,000 in expenses annually. If the system needs $5000 in operating and maintenance costs each year and has a salvage values of $25,000 at Year 10, what is the IRR of this system? If the company wants to earn at least 12% on all investments, should this system be purchased?the to be In 2 years, XYZ is considering buying a new, high efficiency interception system. The new system would be purchased today for $46,500.00. It would be depreciated straight-line to $0 over 2 years. system would be sold for an after-tax cash flow of $14,700.00. Without the system, costs are expected to be $100,000.00 in 1 year and $100,000.00 in 2 years. With the system, $79,700.00 in 1 year and $67,000.00 in 2 years. If the tax rate is 48.30% and the cost of capital is 8.30%, what is the net present value of the new interception system project? costs are expected O $13344.34 (plus or minus $50) O $14279.01 (plus or minus $50) O $10213.60 (plus or minus $50) O $11718.49 (plus or minus $50) None of the above is within $50 of the correct answerThe plant manager of Jurassic Industries is considering the purchase of new automated assembly equipment. The new equipment will cost $120,000. The manager believes that the new investment will result in direct labor savings of $24,000 per year for 10 years. a. What is the payback period on this project?fill in the blank 1 years b. What is the net present value, assuming a 12% rate of return? Use the table provided below. If required, enter a negative net present value using a minus sign. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Net present value: $fill in the blank 2
- The expenses included in the fabrication of a wind turbine for a planned Wind Farm is $73,000 annually. A wise Electrical Engineer developed an alternative that by spending $16,000 now to modify the rotor blades and adjust the gear box, the yearly cost will decrease to $58,000 next year and $52,000 at the end of year 2 until 5. If the interest rate is 10% per year, what is the present worth of the cost savings because of the modification and adjustment?You are considering a CNC machine. This machine will have an estimated service life of 10 years with a salvage value of 10% of the investment cost. Its expected savings from annual operating and maintenance costs are estimated to be $60,000. To expect a 15% rate of return on investment, what would be the maximum amount that you are willing to pay for the machine? (your answer must be rounded off to the nearest dollars, i.e., no decimal places) Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.See picture for clearer image of question The ABC company is considering purchasing a machine that costs $280,000 and expected to yield $200,000 per year before taxes. The company has to borrow $80,000 which have to be repaid in two years at i=10%. The cost of operating and maintaining the machine is $40,000 per year. The machine will be needed for two years and can be sold at the end of the second year for $120,000. For depreciation purposes the straight-line depreciation method with no half-year convention applies. Find the missing values in the following tables in order to determine if this was a good investment at MARR of 14%. The company’s income tax is 40%. Your decision should be based on the PW criterion. INCOME STATEMENT End of Year: 0 1 2 Revenue: 200,000 200,000 Expenses Operating Costs:…
- A new electronic process monitor costs $990,000. This cost could be depreciated at 30 percent per year (Class 10). The monitor would actually be worthless in five years. The new monitor would save $460,000 per year before taxes and operating costs. If we require a 15 percent return, what is the NPV of the purchase? Assume a tax rate of 40 percent. (Do not round intermediate calculations. Round the final answer to 2 decimal places.) NPVThe management of Penfold Corporation is considering the purchase of a machine that would cost $310,000, would last for 6 years, and would have no salvage value. The machine would reduce labor and other costs by $60,000 per year. The company requires a minimum pretax return of 12% on all investment projects. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the proposed project is closest to (Ignore income taxes.): (Round your intermediate calculations and final answer to the nearest whole dollar amount.)Consider a project with a 3-year life and no salvage value. The initial cost to set up the project is $100,000. This amount is to be linearly depreciated to zero over the life of the project. The price per unit is $90, variable costs are $72 per unit and fixed costs are $10,000 per year. The project has a required return of 12%. Ignore taxes. 1. How many units must be sold for the project to achieve accounting break-even? 2. How many units must be sold for the project to achieve cash break-even? 3. How many units must be sold for the project to achieve financial break-even? 4. What is the degree of operating leverage at the financial break-even?