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 475 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?

Your skin wrinkles if you stay in the bathtub a long time because the outermost layer of skin (which consists of dead keratin) swells when it absorbs water. It is tightly attached to the skin below it, so it compensates for the increased area by wrinkling. This happens to the hands and feet because they have the thickest layer of dead keratin cells.

Did you know?

Vampire bats have a natural anticoagulant in their saliva that permits continuous bleeding after they painlessly open a wound with their incisors. This capillary blood does not cause any significant blood loss to their victims.

Did you know?

The ratio of hydrogen atoms to oxygen in water (H2O) is 2:1.

Did you know?

A serious new warning has been established for pregnant women against taking ACE inhibitors during pregnancy. In the study, the risk of major birth defects in children whose mothers took ACE inhibitors during the first trimester was nearly three times higher than in children whose mothers didn't take ACE inhibitors. Physicians can prescribe alternative medications for pregnant women who have symptoms of high blood pressure.

Did you know?

Once thought to have neurofibromatosis, Joseph Merrick (also known as "the elephant man") is now, in retrospect, thought by clinical experts to have had Proteus syndrome. This endocrine disease causes continued and abnormal growth of the bones, muscles, skin, and so on and can become completely debilitating with severe deformities occurring anywhere on the body.

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 ...
Written materials can be helpful for the older adult. Written materials can be helpful for the older adult.
Women who are 65 and older have a lower median income from all sources than men in the same age ... Women who are 65 and older have a lower median income from all sources than men in the same age ...
Replace the canister’s top (making sure it is tight) and connect its hose to the fuel rail ... Replace the canister’s top (making sure it is tight) and connect its hose to the fuel rail ...
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 ...
Two ways of treating blocked coronary arteries, the main cause of heart attacks in older adults. Two ways of treating blocked coronary arteries, the main cause of heart attacks in older adults.
Video: Summation - defined, spatial, temporal & AP generation or not

For a complete list of videos, visit our video library