A distillation column can be purchased and installed for P 2,000,000. It will incur P35,000 in...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A distillation column can be purchased and installed for P 2,000,000. It will incur P35,000 in operations and maintenance expenses and yet can start generating revenues of P125,000 each month as soon as it is installed. The distillation column could be sold at the end of its useful life of 4 years at an estimated price of P150,000. The cost of capital is 15% per annum. The reinvestment rate is 12 %. Before we could evaluate using PW, AW, FW, we need to derive have the effective interest rate per month. What is this effective monthly interest rate? (in interest % with 4 decimals, ex. 0.012575162 is 1.2575.) Do not put the symbol "%" in the answer box. A distillation column can be purchased and installed for P 2,000,000. It will incur P35,000 in operations and maintenance expenses and yet can start generating revenues of P125,000 each month as soon as it is installed. The distillation column could be sold at the end of its useful life of 4 years at an estimated price of P150,000. The cost of capital is 15% per annum. The reinvestment rate is 12 %. Before we could evaluate using PW, AW, FW, we need to derive have the effective interest rate per month. What is this effective monthly interest rate? (in interest % with 4 decimals, ex. 0.012575162 is 1.2575.) Do not put the symbol "%" in the answer box.
Expert Answer:
Related Book For
Cornerstones of Cost Management
ISBN: 978-1305970663
4th edition
Authors: Don R. Hansen, Maryanne M. Mowen
Posted Date:
Students also viewed these general management questions
-
An injection molding machine can be purchased and installed for $90,000. It is in the seven-year GDS property class and is expected to be kept in service for eight years. It is believed that $10,000...
-
What effective interest rate per annum corresponds to a nominal rate of 12% compounded monthly?
-
An interest rate is quoted as 5% per annum with semiannual compounding. What is the equivalent rate with? (a) Annual compounding, (b) Monthly compounding, (c) Continuous compounding.
-
Depreciation policy is an important decision made by a company's Finance Director. A company has purchased some equipment for 85,000, with an estimated scrap value of 9,000 at the end of its useful...
-
Explain Kants use of the first form of the categorical imperative to argue that it is wrong to make a false promise. (Make sure that you do not appeal to the bad consequences as the basis of judging...
-
In a certain subcritical measurement, the detector counts observed between two successive reactivity insertion stages were \(3450 \mathrm{cps}\) and \(4675 \mathrm{cps}\). Find the level of...
-
Consider the following cash flow profile and assume MARR is 10 percent/year. a. What does Descartes' rule of signs tell us about the IRR(s) of this project? b. What does Norstrom's criterion tell us...
-
Bruno Company accumulates the following data concerning a mixed cost, using miles as the activity level. Compute the variable- and fixed-cost elements using the high-lowmethod. Miles Driven 8,000...
-
3) (5 marks) Given f(x) = -5x+1 and g(x) = 4x - 3, a. Write an equation for (f + g)(x) b. Determine (f+g)(6) c. Determine (fg)(x) d. Determine (f-g)(x) e. Determine the domain of (fg)(x) 1-x 4) Given...
-
The members of the Vistas Club are planning a month long hiking and camping trip through the Blue Ridge Mountains, from north Georgia to Virginia. There are a number of trails through the mountains...
-
1. An optical lever is a convenient device to magnify a small displacement, making possible an accurate measurement of the displacement. The plate P carries a mirror. The mirror mount has two points...
-
An internal auditor who uses the CIA designation after it has expired most likely is engaging in an act discreditable under which principle of The IIA's Code of Ethics?
-
Write the equation that results in the desired translation. The square root function, shifted 2 units downward. y = (Type an expression using x as the variable.) www
-
Compute the return on investment (ROI) for an investment that generated a profit of $50,000 with an initial investment of $200,000. Calculate the working capital for a company with current assets of...
-
Sophie works at a doll factory. Every day, she works 10 hours and produces 305 |dolls. Material for one doll cost $3.50 and overheads for her workstation (power, equipment, other resources) total $20...
-
Determine the average axial tensile stress in the bar. P = 160 kips Bar diameter = 2.25in
-
The following are three short-run average total cost schedules for the only three possible plant sizes, 1, 2, and 3. Find the long-run average cost schedule and show the result in the second table....
-
Perform the indicated operations. In designing a cam for a fire engine pump, the expression is used. Simplify this expression. (3) (3 4 32
-
Refer to Exercise 12.14. Suppose that for 20x2, Sanford, Inc., has chosen suppliers that provide higher-quality parts and redesigned its plant layout to reduce material movement. Additionally,...
-
Please answer each of the following: Required: 1. Go to http://www.goldratt.com, and locate the list of cases detailing successful use of the theory of constraints. Pick three cases, and summarize...
-
What are transferred-in costs?
-
Describe a commercial banks assets and liabilities.
-
Financial intermediaries can manage the problems of adverse selection and moral hazard. a. They can reduce adverse selection by collecting information on borrowers and screening them to check their...
-
Define bank capital and key measures of bank profits and returns.
Study smarter with the SolutionInn App