Question: A special machine can save $11,200 per year in cash operating expenses for the next 10 years. The cost is $44,000. No salvage value is

A special machine can save $11,200 per year in cash operating expenses for the next 10 years. The cost is $44,000. No salvage value is expected. Assume the tax rate averages 2/7 of taxable income, straight-line depreciation is used, and the cost of capital = 10% . The CFAT is (round to the nearest dollar):

$11,200

$8,480

$9,258

$6,800

21. Refer to the preceding question. The internal rate of return, using linear interpolation and rounding to two decimal places, is:

25.45%

12.34%

21.04%

14.14%

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 Accounting Questions!

Question. Phlebas the Phoenician is a sailor and a merchant. He is about to embark on a potentially lucrative trading voyage, but is concerned that his boat might be raided by pirates (he understands...

Please help answering this ! thank you. 7. The cost of equipment is $168,000; the useful life is 6 years. Salvage value is zero and the cost of ca 10% and the tax rate = 30%. The present value of the...

PLEASE ANSWER WHATEVER IS POSSIBLE ! thank you a. $45.976 b. $153.252 $50,400 it. $36,840 8. Refer to the preceding question, It would be reasonable to expect that the present value of the tas...

Acteating 3Prof. Stevess Supplemental Prebioms Capital Budgeting Decleians () V Given: Cort of equipment -S41,000 Useful ife6 years Salvage vale 0 Cost of eapital- 10 Bequired Compare the dellar...

1. An investment will generate annual CFAT (cash flows after taxes) of $630,000. It would cost $1,680,000 to acquire and should last five years with no salvage value expected. The payback period for...

e. $50,400 d. $36,840 a $45,976 b. $153,252 8. Refer to the preceding question. It would be reasonable to expect that the present value of the tax savings resulting from the use of the straight-line...

need help asap ! 7. The cost of equipment is $168,000; the useful life is 6 years. Salvage value is zero and the cost of ca 10% and the tax rate = 30%. The present value of the tax savings resulting...

5. The reason depreciation must be considered in a NPV analysis is: a. Depreciation is a cash flow item c. Depreciation should not be considered b. Depreciation has no tax effects d. Depreciation can...

A special machine can save $11,200 per year in cash operating expenses for the next 10 years. The cost is $44,000. No salvage value is expected. Assume the tax rate averages 2/7 of taxable income,...

A special machine can save $22,400 per year in cash operating expenses for the next 10 years. The cost is $88,000. No salvage value is expected. Assume the tax rate averages 2/7 of taxable income,...

We mentioned iterative lengthening search, an iterative analog of uniform cost search. The idea is in use increasing limits on path cost. If a node is generated whose path cost exceeds the current...

What role does C3b play in opsonization and complement system activation?

Doing an audit is part of good q , controlling. planning organizing leading

From the state diagram below, given the input sequence 1001100 starting at So what output sequence did the finite state machine generate? 1.0 Start 0,0 0.0 11 O 1000101 O 0111011 O 0101101 O 0110111

The mean per capita income is 24,863 dollars per annum with a standard deviation of 743 dollars per annum. What is the probability that the sample mean would differ from the true mean by more than 88...

An individual investor is evaluating the profitability of an anticipated land investment that has an asking price of $2,000 per acre and a current net cash flow of $120 per acre. The investor will...

Your firm is currently evaluating the purchase of a new machine called a Haley Special. The Special will replace your existing machine, which has 3 years left of its 6-year useful life. The existing...

1.Imperial Food's checkbook balance on December 31, Year 1 was $122,400. In addition, Imperial held the following items in its safe on December 31: (1) A check for $600 from Brewster, Inc., received...

2. Give an example where information that is emotionally interesting, specific and close in time and space, can be used to capture someones interest.

7. How can an interpreter influence the utterer (sender)?

9. Find a news article in a daily newspaper written by a journalist. How is this news article related to: (a) The writers expertise? (b) The context? (c) The personal characteristics of the writer?...