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 424 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?

Though Candida and Aspergillus species are the most common fungal pathogens causing invasive fungal disease in the immunocompromised, infections due to previously uncommon hyaline and dematiaceous filamentous fungi are occurring more often today. Rare fungal infections, once accurately diagnosed, may require surgical debridement, immunotherapy, and newer antifungals used singly or in combination with older antifungals, on a case-by-case basis.

Did you know?

IgA antibodies protect body surfaces exposed to outside foreign substances. IgG antibodies are found in all body fluids. IgM antibodies are the first type of antibody made in response to an infection. IgE antibody levels are often high in people with allergies. IgD antibodies are found in tissues lining the abdomen and chest.

Did you know?

All adverse reactions are commonly charted in red ink in the patient's record and usually are noted on the front of the chart. Failure to follow correct documentation procedures may result in malpractice lawsuits.

Did you know?

Only 12 hours after an egg cell is fertilized by a sperm cell, the egg cell starts to divide. As it continues to divide, it moves along the fallopian tube toward the uterus at about 1 inch per day.

Did you know?

The term pharmacology is derived from the Greek words pharmakon("claim, medicine, poison, or remedy") and logos ("study").

In older adults, higher education is related to higher levels of ego development. In older adults, higher education is related to higher levels of ego development.
Older adulthood can be a time of independence and exploration as responsibilities diminish and the ... Older adulthood can be a time of independence and exploration as responsibilities diminish and the ...
"No Oven Needed" Energy Bars Try this recipe as an inexpensive alternative to commercial ... "No Oven Needed" Energy Bars Try this recipe as an inexpensive alternative to commercial ...
Establishing rapport with his older adult Establishing rapport with his older adult
An analytical procedure requires a solution of chloride ions. How many grams of MgCl2 must be ... An analytical procedure requires a solution of chloride ions. How many grams of MgCl2 must be ...
Jia's Fashions recently paid a $2 annual dividend. The company is projecting that its ... Jia's Fashions recently paid a $2 annual dividend. The company is projecting that its ...
Video: What are the Parts of a Plant Cell?

For a complete list of videos, visit our video library