This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Premium Pie Company needs to purchase a new baking oven to replace an older oven that requires too ... (Read 453 times)

mp14

  • Hero Member
  • *****
  • Posts: 534
on: May 1, 2019
Premium Pie Company needs to purchase a new baking oven to replace an older oven that requires too much energy to run. The industrial size oven will cost $1,200,000. The oven will be depreciated on a straight-line basis over its six-year useful life. The old oven cost the company $800,000 just four years ago. The old oven is being depreciated on a straight-line basis over its expected ten-year useful life. (That is, the old oven is expected to last six more years if it is not replaced now.) Due to changes in fuel costs, the old oven may only be sold today for $100,000. The new oven will allow the company to expand, increasing sales by $300,000 per year. Expenses will also decrease by $50,000 per year due to the more energy efficient design of the new oven. Premium Pie Company is in the 40% marginal tax bracket and has a required rate of return of 10%.
a.Calculate the net present value and internal rate of return of replacing the existing machine
b.Explain the impact on NPV of the following:
i.Required rate of return increases
ii.Operating costs of new machine are increased
iii.Existing machine sold for less
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
Buy Test-Bank


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by mp14 on May 1, 2019

diesoon

  • Sr. Member
  • ****
  • Posts: 353
Reply #1 on: May 1, 2019
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
Answer Preview
Only 58% of students answer this correctly


mp14

  • Hero Member
  • *****
  • Posts: 534
Reply #2 on: May 1, 2019
TY


diesoon

  • Sr. Member
  • ****
  • Posts: 353
Reply #3 on: May 1, 2019
You're welcome


« previous next »
 

Did you know?

In inpatient settings, adverse drug events account for an estimated one in three of all hospital adverse events. They affect approximately 2 million hospital stays every year, and prolong hospital stays by between one and five days.

Did you know?

Vaccines cause herd immunity. If the majority of people in a community have been vaccinated against a disease, an unvaccinated person is less likely to get the disease since others are less likely to become sick from it and spread the disease.

Did you know?

The Centers for Disease Control and Prevention has released reports detailing the deaths of infants (younger than 1 year of age) who died after being given cold and cough medications. This underscores the importance of educating parents that children younger than 2 years of age should never be given over-the-counter cold and cough medications without consulting their physicians.

Did you know?

Amphetamine poisoning can cause intravascular coagulation, circulatory collapse, rhabdomyolysis, ischemic colitis, acute psychosis, hyperthermia, respiratory distress syndrome, and pericarditis.

Did you know?

In 1835 it was discovered that a disease of silkworms known as muscardine could be transferred from one silkworm to another, and was caused by a fungus.

The vast majority of older adults live in their own homes, even when they need special equipment or ... The vast majority of older adults live in their own homes, even when they need special equipment or ...
Children’s interactions with older siblings may help promote an understanding of other people’s ... Children’s interactions with older siblings may help promote an understanding of other people’s ...
National Institute on Aging Web site is designed to be easy to use by older adults. It utilizes ... National Institute on Aging Web site is designed to be easy to use by older adults. It utilizes ...
Nursing Responsibilities Related to Adverse Drug Reactions and Drug Interactions in Older Adults Nursing Responsibilities Related to Adverse Drug Reactions and Drug Interactions in Older Adults
A replaceable PROM used in an older General Motors computer. Notice that the sealed access panel ... A replaceable PROM used in an older General Motors computer. Notice that the sealed access panel ...
A company purchased 26 desks for $240 each and 18 chairs for $59 each. Compute the total ... A company purchased 26 desks for $240 each and 18 chairs for $59 each. Compute the total ...
Video: How eudicots (true dicots) differ from monocots Animation

For a complete list of videos, visit our video library