Business, 21.06.2020 01:57 katherinevandehei

A new engineer is proposing that the old machine be replaced with a new one that costs $165,000. This new machine will last 5 years with 10% salvage. This new machine will require only one operator, and will operate on a productive basis 384 minutes per day. This new machine will operate faster, with a production rate of .3200 minutes per part. Maintenance costs for this machine are expected to be 0 the first year, $8,000 the second, and increase by 7% each year thereafter. Overhead rates, inflation rates, and tax rates are the same as in part one. Depreciation will be 7 year MACRS. Up to 25% of the money for this new machine could be borrowed. Management wants to know what the maximum interest rate on borrowed money that would make it worthwhile to borrow, and what is the best repayment plan. Management also wants to know if the maximum interest rate is a function of the repayment plan. Use IRR techniques to determine under what conditions this machine should be purchased

Answers: 3

Show answers

Other questions on the subject: Business

Business, 22.06.2019 00:40, tenleywood

The silverside company is considering investing in two alternative projects: project 1 project 2 investment $500,000 $240,000 useful life (years) 8 7 estimated annual net cash inflows for useful life $120,000 $40,000 residual value $32,000 $10,000 depreciation method straightminusline straightminusline required rate of return 11% 8% what is the accounting rate of return for project 2? (round any intermediary calculations to the nearest dollar, and round your final answer to the nearest hundredth of a percent, x. xx%.)

Answers: 3

continue

Business, 22.06.2019 06:30, henriquetucker

Double corporation acquired all of the common stock of simple company for

Answers: 2

continue

Business, 22.06.2019 22:30, dontcareanyonemo

Schuepfer inc. bases its selling and administrative expense budget on budgeted unit sales. the sales budget shows 1,800 units are planned to be sold in march. the variable selling and administrative expense is $4.30 per unit. the budgeted fixed selling and administrative expense is $35,620 per month, which includes depreciation of $2,700 per month. the remainder of the fixed selling and administrative expense represents current cash flows. the cash disbursements for selling and administrative expenses on the march selling and administrative expense budget should be:

Answers: 1

continue

Business, 23.06.2019 01:00, ashley232323

Need with an adjusting journal entrycmc records depreciation and amortization expense annually. they do not use an accumulated amortization account. (i. e. amortization expense is recorded with a debit to amort. exp and a credit to the patent.) annual depreciation rates are 7% for buildings/equipment/furniture, no salvage. (round to the nearest whole dollar.) annual amortization rates are 10% of original cost, straight-line method, no salvage. cmc owns two patents: patent #fj101 and patent #cq510. patent #cq510 was acquired on october 1, 2016. patent #fj101 was acquired on april 1, 2018 for $119,000. the last time depreciation & amortization were recorded was december 31, 2017.before adjustment: land: 348791equpment and furniture: 332989building: 876418patents 217000

Answers: 3

continue

You know the right answer?

A new engineer is proposing that the old machine be replaced with a new one that costs $165,000. Thi...