Business, 05.03.2021 01:40 gsls6165

One year ago, Baffle Bag and Box Company (BB&B) purchased a new folder for $11,000. The company now finds a new box folder is available that may offer significant advantages. The new machine can be purchased for $15,000, has an economic life of 10 years, and has no salvage value. It is expected that the new machine will produce a gross margin of $4,000 per year, so that, using straight-line depreciation, the annual taxable income will be $2,500. The current machine is expected to produce a gross margin of $2,000 per year, and, assuming a total economic life of 11 years and straight line depreciation, a profit before taxes of $1,000. The current market value of the old machine is $5,000. BB&B’s tax rate is 45%, and its cost of capital after tax is 10 percent. Ignore possible capital gain taxes and assuming zero salvage values at the end of the machines’ economic lives, should BB&B replace its year-old box folder?

Answers: 1

Show answers

Other questions on the subject: Business

Business, 22.06.2019 01:00, biggs113056

Awidower devised his fee simple interest in his residence as follows: “to my daughter for life, then to my oldest grandchild who survives her.” at the time of the widower’s death, he was survived by his only two children, a son and a daughter, and by one grandchild, his daughter’s son. a short time later, the daughter together with her son entered into a contract to sell the residence in fee simple to a buyer. the applicable jurisdiction continues to follow the common law rule against perpetuities, but has abrogated the rule in shelley’s case. at the closing, the buyer refused to purchase the residence. can the sellers compel the buyer to do so?

Answers: 2

continue

Business, 22.06.2019 02:20, lovehelping1564

Neon light company of kansas city ships lamps and lighting appliances throughout the country. ms. neon has determined that through the establishment of local collection centers around the country, she can speed up the collection of payments by one and one-half days. furthermore, the cash management department of her bank has indicated to her that she can defer her payments on her accounts by one-half day without affecting suppliers. the bank has a remote disbursement center in florida. a. if neon light company has $2.90 million per day in collections and $1.18 million per day in disbursements, how many dollars will the cash management system free up?

Answers: 2

continue

Business, 22.06.2019 03:30, clevelandjaniya1

Sarah salesrep is brand new to her job selling "lifetime" printers that never need replacement ink cartridges. the problem is that these printers cost ten times more than a regular printer, so it is difficult to get prospective buyers to understand the cost savings of buying it. to break through the barrier and begin making sales, sarah should use a analysis that highlights her printer's lower cost.

Answers: 3

continue

Business, 22.06.2019 04:30, lizdeleon248

Jennifer purchased a house in a brand new development in the outskirts of town. when her house was built, the nearest fire department was nearly 20 miles away. as her neighborhood developed, the density of the community called for a new fire department 1.5 miles away. what effect will the new fire station have on her homeowners insurance premium? a. a new fire department will be more demanding on local taxes. her annual premium will go up. b. the location of a fire department has no bearing on the value of her house. her annual premium will stay the same. c. the new fire department will reduce the risk of financial loss in her home. her annual premium should decrease. d. with a fire department so close (less than 5 miles), financial risk on jennifer’s home practically disappears. she will not need to pay insurance anymore.

Answers: 1

continue

You know the right answer?

One year ago, Baffle Bag and Box Company (BB&B) purchased a new folder for $11,000. The company...