answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
laila [671]
2 years ago
13

Simone Company is considering the purchase of a new machine costing $50,000. It is expected to save $9,000 cash per year for 10

years, has an estimated useful life of 10 years, and no salvage value. Management will not make any investment unless at least an 18% rate of return can be earned. Using the net present value method, determine if the proposal is acceptable. Assume all tax effects are included in these numbers.
Business
1 answer:
max2010maxim [7]2 years ago
4 0

Answer:

At the rate of return of 18%, the purchase of the new machine is not convenient.

Explanation:

Giving the following information:

Simone Company is considering the purchase of a new machine costing $50,000. It is expected to save $9,000 cash per year for 10 years, has an estimated useful life of 10 years, and no salvage value. Management will not make any investment unless at least an 18% rate of return can be earned.

We need to find the net present value using the following formula:

NPV= -Io + ∑[Cf/(1+i)^n]

Cf= cash flow

NPV= -50,000 + 9,000/1.18 + 9,000/1.18^2 + 9,000/1.18^3 + ... + 9,000/1.18^10

NPV= -9,553

At the rate of return of 18%, the purchase of the new machine is not convenient. It will produce a loss in value.

You might be interested in
What is the correct strategy that Alejandra must use to deliver a negative message?
Serga [27]

Answer:

Apologize and come up with a new plan. Of course, you need to apologize, if you don't then that becomes a problem. (especially if they are a Karen.) After apologizing start to explain what you are going to do about it. For Example  Refunds, Store Credit, Replacement, Etc. To start off. Then fix the problem. Also, tell them that you are going to do so and so to fix it. Like creating anew toy or whatnot.  Hope this helps!  

6 0
2 years ago
For june, gold corp. estimated sales revenue at $600,000. it pays sales commissions that are 4% of sales. the sales manager’s sa
hjlf
In July, Goldcorp had sales of $540,000. Of this, the 4% sales commission= $21,600, the shipping expenses was 1% at $5400, and the manager's monthly salary was $23,750, plus miscellaneous expenses was $15,000. So I would say that the budgeted expenses would be $21,600+$5400+$23750= $50,750, assuming that miscellaneous expenses were not budgeted. Total expenses would be $65,750 if the $15,000 was included. 
6 0
2 years ago
Cragmont has beginning equity of $277,000, net income of $63,000, withdrawals of $25,000 and no additional investments by owners
Andrew [12]
<span>The ending equity is $315,000 This is just a matter of adding income and subtracting withdraws. So let's do it. "Cragmont has beginning equity of $277,000," x = $277000 "net income of $63,000" x = $277000 + $63000 = $340000 "withdrawals of $25,000" x = $340000 - $25000 = $315000</span>
3 0
2 years ago
AutoPROS uses its website to target car parts stores and car owners and tell them of the benefits of using their long-lasting sp
Brrunno [24]

Auto pros is using the push and pull strategies.

<u>Explanation:</u>

A push strategy is to promote an item at a client, while a draw technique pulls a client towards an item. Push strategy is a speedy method to move a client from attention to buy, while pull methodology is tied in with making a continuous relationship with the brand.

The business terms push and pull started in coordination and production network the board, but at the same time are generally utilized in showcasing, and is likewise a term broadly utilized in the lodging conveyance business.

8 0
2 years ago
You made an investment of $12,000 into an account that paid you an annual interest rate of 3.5 percent for the first 5 years and
Whitepunk [10]

Answer:

interest rate r = 6.78 %

Explanation:

given data

investment = $12,000

interest rate = 3.5 percent = 0.035

time = 5 year

interest rate =  7.9 percent = 0.079

time = next 15 year

to find out

What was your annual rate of return over the entire 20 years

solution

we get here interest rate as

interest rate r = [(1+r)^{t1} * (1+r)^{t2}]^{\frac{1}{t1+t2}} - 1     ...................1

here t1 is time period for first 5 year and t2 is time i.e next 15 year and r1 and r2 is rate

now put here value we get

interest rate r = [(1+)^{t1} * (1+r)^{t2}]^{\frac{1}{t1+t2}} - 1

interest rate r = [(1+0.035)^{5} * (1+0.079)^{15}]^{\frac{1}{5+15}} - 1

interest rate r = 1.0678 - 1

interest rate r = 0.0678

interest rate r = 6.78 %

4 0
2 years ago
Other questions:
  • Say that equilibrium price remained constant and quantity rose. what would you say was the most likely cause?
    9·1 answer
  • Deydey620
    5·2 answers
  • An investigator conducting a study of a medical device under an ide is required to complete and sign
    8·1 answer
  • In april 2011, consolidated edison (ed) stock cost $50 per share and yielded 5% per year in dividends, while national grid (ngg)
    5·1 answer
  • Mother &amp; daughter jewelers breaches its lease with longview mall and vacates the premises six months before the end of the t
    7·1 answer
  • A country produces computers and rice. If resources are fully employed and there is technological progress only in the productio
    10·1 answer
  • Which of the following statements concerning the procurement process are TRUE?a. Vendor billing is one of the steps.b. Only one
    15·1 answer
  • Unter Components manufactures low-cost navigation systems for installation in ride-sharing cars. It sells these systems to vario
    7·1 answer
  • Porter Plumbing's stock had a required return of 11.75% last year, when the risk-free rate was 5.50% and the market risk premium
    12·1 answer
  • Suppose management estimated the market valuation of some obsolete inventory at $99,000; this inventory was recorded at $120,000
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!