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Project Description:

11. equipment replacement. atlas, inc. sells a million units per year of its product for $25. the company purchased an ncl machine 2 years ago for $6 million. the machine was expected to last 6 years and has annual fixed costs of $2 million (including depreciation) and total variable costs of $16 per unit. the current sales value of the old machine is $1 million.


a new ncl machine may be purchased at a cost of $4 million. the new machine is expected to last 4 years and have a zero salvage value, the new machine reduces the fixed operating costs to $1.2 million (including depreciation) and would result in a total unit variable cost of $14.00.

a. excluding taxes, should atlas purchase the new machine?







b. if taxes are considered with a 40% tax rate, should atlas purchase the new machine?








c. recompute (b) considering the present value of money with a required annual return on investment of 10% (pv of $1 per year for 4 years at 10%=$3.16987)?
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Project Stats:

Price Type: Fixed

Project Budget: $0 to $10
Expired
Total Proposals: 16
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Proposals

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    84 Jobs 35 Reviews
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  • 4.7
    71 Jobs 33 Reviews
    $25 in 1 Day
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    1991 Jobs 1016 Reviews
    $15 in 1 Day
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    86 Jobs 65 Reviews
    $30 in 1 Day
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    34 Jobs 21 Reviews
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    546 Jobs 386 Reviews
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    405 Jobs 247 Reviews
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    3 Jobs 2 Reviews
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