excelo inc. just purchased a new machine for $85000. the machine will generate savings of $25000 per year for the next 5 years. each year the machine will run for 4000 hours. the salvage value at the end of 5 years will be $34000. assume an interest rate of 10% what is the capital recovery annual cost? what is the equivalent net savings per machine running hour for Excelo?
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- You are planning to invest in a machine for your manufacturing facility. The machine costs P55,400, and it has an expected useful life of 5 years. You estimate that the machine will generate an annual net cash flow (revenue minus expenses) of P21,000. The interest rate is 5% per year. 1. Disregarding the revenue, what is the future value of the machine cost? 2. What is the present value of the revenue in its 5 years of useful life? Is it worth the investment compared to the machine cost? 3. What is the future value of the revenue in its 5 years of useful life? is it worth the investment compared to the future value of the machine cost? 4. Suppose that at there is a maintenance expense of P3,000 at the first year, P3,500 at the second year, P4,000 at the third year, P4,500 at the fourth year, and P5,000 at the last year. What is the present value of the maintenance expense?Machine X will produce cost savings of $6,000 per year for four years; machine Y will produce cost savings of $4,000 per year for six years. If the interest rate is 10% compounded annually, what are the savings for both of these machines in terms of their present value in cost savings?It is estimated that a certain piece of equipment can save$19,000per year in labor and materials costs. The equipment has an expected life ofsixyears and no market value. If the company must earn a20%annual return on such investments, how much could be justified now for the purchase of this piece ofequipment?...Click the icon to view the interest and annuity table for discrete compounding when i=20% per year. The company can justify spending up to $ for this piece of equipment. (Round to the nearest cent.
- 3. Calculate the internal rate of return for a machine that costs $550,000 and provides annual revenue of $125,000 per year for 5 years. You can assume all revenue is received once a year at the end of the year. a. Compare the IRR to the interest rate on a loan to fund the machine cost at 5.3%. Based on this information should you take on a loan to purchase this machine. Justify your answer.You have purchased an equipment costing $20,000. The equipment will be used for two years, and at the end of two years, its salvage value is expected to be $10,000. The equipment will be used 6,000 hours during the first year and 8,000 hours during the second year. The expected annual net savings will be $30,000 during the first year and $40,000 during the second year. If your interest rate is 10%, what would be the equivalent net savings per machine-hour?Suppose you want to purchase equipment costing $500 and which will give you a cash flow of $35 every year. The equipment has a useful life of 7 years. Every year the equipment's price decreases by 34% and the discount rate is 4%. What is the NPV of the equipment if you purchase it now and when should you buy the equipment
- A piece of machinery is projected to provide an income of = 125, 000 - 5000dollars per year I (t) machine is expected to last 12 years. Determine the maximum price that can be paid for the machine when purchased new assuming you could receive 6% return on the money if you chose to invest the money instead of purchasing the equipment. with t in years. TheYou can make an investment that will immediately cost $52,000. If you make the investment, your after-tax operating profit will be $13,000 per year for five years. After the five years, the profit will be zero, and the scrap value also will be zero. You will finance the investment with internally generated funds and receive the profit at the end of each year. The net present value equation for this investment is: NPV=$| (Carefully enter your answer as an algebraic expression, using the proper notation in the proper format. Do not use the letter x to denote the multiplication sign.)A store plans on investing on a new grill oven that costsP100,000. It will generate revenues of P2,500 per dayand expenses of P800 per day. Suppose the store will beoperating 320 days in a year. Evaluate the acceptabilityof this investment if the grill oven will have a lifespan ofsix years and MARR is 10% per year. Use PW method.What is IRR?
- CAGELCO is considering the purchase of a new turbo generator set that will last 5 years with a cost of P 500, 000. Maintenancewill cost P 6,000 for the first year, decreasing by P 1, 000each year to P2,000 the 5thyear. If the interest rate is 8% per year, compounded annually, how much money should the company set aside for this machine? show your solutionIf you insulate your office for $19,000, you will save $1,900 a year in heating expenses. These savings will last forever. a. What is the NPV of the investment when the cost of capital is 5%? 10%? b. What is the IRR of the investment? c. What is the payback period on this investment?Smoot Automotive has implemented a new project that has an initial cost, and then generates inflows of P10,000 a year for the next seven (7) years. The project has a payback period of 4.0 years. 37. What is the project's internal rate of return (IRR)?