Question: A machine that costs $250,000 will save a net cash of 45,000 per year. The machine has a useful life of 10 years, after which

A machine that costs $250,000 will save a net cash of 45,000 per year. The machine has a useful life of 10 years, after which it will have a market value of 50,000. The company's MARR is 5% per year. Calculate the external rate of return in case of purchasing this machine and decide whether it is economical to buy this machine

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

Use inventory models to address Lou Carlson's questions. Support your recommendations with cost justification. A.D. Small, Inc., provides management consulting services from its offices located in...

Q:

Krauth Company purchased a machine for $162,600. The machine has a life of twelve years with no salvage value. It is expected that the machine will generate annual net cash inflows of $30,000 per...

Q:

Krauth Company purchased a machine for $119,000. The machine has a life of seven years with no salvage value. It is expected that the machine will generate annual net cash inflows of $28,000 per year...

Q:

Krauth Company purchased a machine for $117,000. The machine has a life of seven years with no salvage value. It is expected that the machine will generate annual net cash inflows of $26,000 per year...

Q:

Krauth Company purchased a machine for $162,600. The machine has a life of twelve years with no salvage value. It is expected that the machine will generate annual net cash inflows of $30,000 per...

Q:

Krauth Company purchased a machine for $117,000. The machine has a life of seven years with no salvage value. It is expected that the machine will generate annual net cash inflows of $26,000 per year...

Q:

Krauth Company purchased a machine for $162,600. The machine has a life of twelve years with no salvage value. It is expected that the machine will generate annual net cash inflows of $30,000 per...

Q:

Flak Company purchased a machine and assigned it a life of nine years with no salvage value. The machine is expected to generate net cash inflows of $ 2 2 , 0 0 0 per year over its useful life. Flak...

Q:

Please answer 32 multiple answers from the question paper expect 32, 33, 35, 36, 37, 38, 39, 40 from managerial accounting Nmn : ACC202 - Management Accounting: FINAL EXAM - 'mnprvllmmive Multi Ie...

Q:

Please answer 32 multiple answers from the question paper expect 32, 33, 35, 36, 37, 38, 39, 40 from managerial accounting Nmn : ACC202 - Management Accounting: FINAL EXAM - 'mnprvllmmive Multi Ie...

Q:

QUESTION 1 Cash outlays for capital assets include all the following EXCEPT: The original purchase price The annual operating costs The salvage value All of the above 1 points QUESTION 2 Which of the...

Q:

Determine the payback period for an embedded computer that has an initial value of $1,200,000, annual O&M costs of $15,000, and estimated revenue of $100,000 per year.With a 10% salvage of the...

Q:

4. People who have swallowed poisons such as mercury salts, copper salts, or lead salts are given egg white or milk. Why? 5. The treatment described in (4) above is followed by an emetic. Why?

Q:

Empowering in the model of servant leadership is allowing followiers the freedom to be independent, make decisions on their own, and be self - sufficient. True Folse

Q:

Does the wording of a question influence a person's response? To investigate, a student asked 50 customers at a sporting goods store if Barry Bonds should be elected to the Baseball Hall of Fame....

Q:

3. Collaboratively plan mini lessons in PLCs based on grade level curriculum.

Q:

2. Develop a rubric/look fors to monitor mini lesson implementation and provide feedback.

Q:

4. Implementing professional development that serves as the engine for the school improvement plan.