Question: You are considering purchasing a CNC machine which costs $130,000. This machine will have an estimated service life of 11 years with a net after-tax


You are considering purchasing a CNC machine which costs $130,000. This machine will have an estimated service life of 11 years with a net after-tax salvage value of $13,000. Its annual after-tax operating and maintenance costs are estimated to be $58,000. To expect an 20% rate of return on investment, what would be the required minimum annual after-tax revenues? Click the icon to view the interest factors for discrete compounding when /= 20% per year. The required minimum annual after-tax revenues would be $ thousand. (Round to one decimal place.) 7: More Info Single Payment Equal Payment Series Compound Present Compound Sinking Present Capital Amount Worth Amount Fun Worth Recovery Factor Factor Factor Factor Factor Factor (F/P, i, N) (P/F, i, NJ F/A, i, N) (A/F, i, N) (P/A, i, N) (A/P, i, N) 1.2000 0.8333 1.0000 1.0000 0.8333 1.2000 1.4400 0.6944 2.2000 0.4545 1.5278 0.8545 1.7280 0.5787 8.6400 0.2747 2. 106 0.4747 2.0736 0.4823 5.3680 0. 1863 2.588 0.3863 2.4883 0.4019 -4416 0.1344 2.9906 0.3344 2.9860 0.3349 0. 1007 3.3255 0.3007 3.5832 0.2791 12.9159 0.077 .6046 0.2774 4.2998 0.2326 3.4901 0.0606 .8372 0.2606 5.1598 .1938 20.7989 0.0481 4.0310 0.2481 6.1917 0.1615 25.9587 0.0385 1. 192 0.2385 7.4301 0.1346 32.1504 0.0311 4.3271 0.2311 8.916 .1122 39.580 0.0253 4.4392 0.225 10.6993 0.0935 48.4966 0.020 4.5327 0.2206 2.8392 0.0779 59.1959 0.0160 .610 0.2169 15.4070 D.0649 72.0351 0.0139 4.6755 0.2139 10. Consider two investments A and B with the sequences of cash flows given in the table below. Click the icon to view the cash flows for the projects. (a) Compute the IRR for each investment The rate of return for Project A is 9%. (Round to one decimal place.) The rate of return for Project B is 9%. (Round to one decimal place.) (b) At MARR = 179%, determine the acceptability of each project. Would you accept Project A? Choose the correct answer below. O Yes O No Would you accept Project B? Choose the correct answer below. O No Yes (c) If A and B are mutually exclusive projects, which project would you select based on the rate of return on incremental investment at MARR = 17%? The rate of return on the incremental investment is 36. (Round to one decimal place. Which project would you select based on the rate of return on incremental investment at MARR = 17%? Choose the correct answer below. O Project A Project B 3: More Info Net Cash Flow Project A Project B - $105,000 - $85,000 35,000 25,000 WN- 35,000 25,000 130,000 140,000
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