The Rosco company is trying to decide if they should purchase Machine Alpha. The purchase price of Machine Alpha is $345,700 and will require a working capital of $54,500.
Machine Alpha will require a major overhaul in year 3 and year 6 of $37,500.
The increase in revenue will be: Years 1, Year 2, and Year 3 will have an annual increase in revenue of $98,700 (the same amount for all three years).
Year 4 - $128,400, Year 5 - $135,300, Year 6 - $86,100, Year 7 - $72,300 and Year 8 - 64,900.
At the end of year 8, the company will sell the machine for $18,700.
Calculate the net present value of Machine Alpha using a 16% rate of return. Show your work and indicate if the Rosco Company should purchase Machine Alpha.
Round your net present value answer to the nearest whole dollar. Show Calculation for more understanding.
Answers
To calculate the net present value (NPV) of Machine Alpha, we need to calculate the present value of each cash flow and subtract the initial investment.
Given:
Purchase price: $345,700
Working capital: $54,500
Overhaul costs in year 3 and year 6: $37,500 each
Annual revenue increases in years 1, 2, and 3: $98,700 each
Revenue in years 4, 5, 6, 7, and 8: $128,400, $135,300, $86,100, $72,300, and $64,900, respectively
Sale value at the end of year 8: $18,700
Rate of return: 16%
Step 1: Calculate the present value (PV) of each cash flow.
To calculate the present value, we use the formula:
PV = CF / (1 + r)^n
where CF is the cash flow, r is the discount rate, and n is the number of periods.
Year 0:
Initial investment: -$345,700
Working capital: -$54,500
Year 3:
Overhaul cost: -$37,500
Revenue increase: $98,700
Year 6:
Overhaul cost: -$37,500
Revenue increase: $98,700
Year 8:
Revenue: $18,700
Years 1, 2, 4, 5, and 7 have no additional cash flows apart from the revenue increase.
Step 2: Calculate the NPV by summing the present values and subtracting the initial investment.
NPV = Sum of PV - Initial investment
Calculations:
PV (Year 0) = -$345,700 / (1 + 0.16)^0 = -$345,700
PV (Working capital) = -$54,500 / (1 + 0.16)^0 = -$54,500
PV (Year 3 overhaul cost) = -$37,500 / (1 + 0.16)^3 = -$25,395.97
PV (Year 3 revenue increase) = $98,700 / (1 + 0.16)^3 = $58,736.11
PV (Year 6 overhaul cost) = -$37,500 / (1 + 0.16)^6 = -$17,439.60
PV (Year 6 revenue increase) = $98,700 / (1 + 0.16)^6 = $40,936.34
PV (Year 8 revenue) = $18,700 / (1 + 0.16)^8 = $5,485.70
Sum of PV = -$345,700 + -$54,500 + -$25,395.97 + $58,736.11 + -$17,439.60 + $40,936.34 + $5,485.70 = -$327,876.32
NPV = -$327,876.32 - (-$345,700) = $17,823.68
Since the NPV is positive ($17,823.68), the net present value of Machine Alpha at a 16% rate of return is positive. Therefore, the Rosco Company should consider purchasing Machine Alpha as it is expected to generate a positive return on investment.
Please note that rounding the NPV to the nearest whole dollar may lead to a slight discrepancy in the final answer.
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Related Questions
The capital of the firm of Anu and Benu is Rs. 1,00,000 and the market rate of
interest is 15%. Annual salary to partners is Rs. 6,000 each. The profits for the
last 3 years were Rs. 30,000; Rs. 36,000 and Rs. 42,000. Goodwill is to be
valued at 2 years purchase of the last 3 years' average super profits. Calculate
the goodwill of the firm.
Answers
Answer:
capita cr salary dr goodwill dr because assets purchasesis dr
Which type of power steering system relies on inputs to sense the steering
effort?
A) HPAS
B) EPAS
C) Both A and B
D) Neither A nor B
Back
50 of 61
Next
Submit All
!!!
Answers
Answer:
Hi
Explanation:
C is the correct answer
In reviewing the security logs for a company's headquarters in New York City, which of these activities should not raise much of a security concern?
A recently hired data scientist in the Medical Analytics department has repeatedly attempted to access the corporate financial database
One evening an employee logs in from home and downloads all of the files associated with the new product he is working on
An employee has started logging in from home for an hour or so during the last 2 weeks of each quarter
Each night one headquarters employee logs into his account from an ISP in China
Answers
A recently hired data scientist in the Medical Analytics department has repeatedly attempted to access the corporate financial database activities should not raise much of a security concern. The answer is OPTION A
The three guiding principles of confidentiality, integrity, and availability make up the CIA Triad (CIA). These tenets collectively constitute the basis for information security policies. A program, organization, system, or enclave's cybersecurity is under the control of this role.
Information Systems Security Officer (ISSO) Cybersecurity Officer is another name for the person who fills this position. Inform your legal team as soon as you can about the breach and provide them with all relevant information so that your organization is prepared for any scenario.
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how to calculate cost of sales and gross profit
Answers
Tony’s Market used the perpetual method to record the following events involving a recent purchase of inventory: Received goods for $85000, terms 2/7, n/30. Returned $1200 of the shipment for credit. Paid $300 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company’s inventory
Answers
As a result of these events, the company's inventory will decrease by $85,000 - $1,200 = $83,800.
Let's break down the events to understand the impact on the inventory:
1. **Received goods for $85,000, terms 2/7, n/30:** This means that Tony's Market purchased inventory worth $85,000, and the terms offer a 2% discount if paid within 7 days. The initial inventory value increases by $85,000.
2. **Returned $1,200 of the shipment for credit:** Tony's Market returned $1,200 worth of inventory, which decreases the inventory value by $1,200.
3. **Paid $300 freight on the shipment:** The freight cost is not directly related to the inventory value. It is a separate expense and does not affect the inventory balance.
4. **Paid the invoice within the discount period:** Since Tony's Market paid the invoice within the discount period, they would deduct the 2% discount from the inventory cost. However, the discount amount is not mentioned in the given information.
Considering the given information, the net impact on the inventory is a decrease of $85,000 - $1,200 = $83,800.
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People are willing to pay a higher price if they believe that supplies are
A. fluctuating
B. endless
C. increasing
D. limited
Answers
Hope this helps! :)
Answer:
D.Limited
Explanation:
All of the following statements related to medical emergencies in oral healthcare settings are correct EXCEPT which one?
A. Diagnostic activities should be effective to establish a database that identifies those patients at-risk who may experience a medical emergency. B. Available data on the types and incidence of medical emergencies in oral healthcare indicate that the rate of medical emergencies per dentist per year is quite high. C. At a minimum, in the event of a life-threatening medical emergency, OHCP must feel comfortable to perform BLS techniques to stabilize the patient until EMS arrives. D. It must be emphatically stated that advanced life support (ALS) activities should not be attempted without sufficient training and maintenance of skills
Answers
All of the following claims about medical emergencies in settings for dental healthcare are true, but it must be emphasized that doing advanced life support (ALS) activities without the proper training and upkeep of skills is dangerous.
A medical emergency, sometimes known as a crisis involving "life or limb," is an acute injury or sickness that poses an immediate risk to a person's life or long-term health. Some of these crises, like cardiovascular (heart), pulmonary, and gastrointestinal crises, cannot be handled by the victim alone and may need aid from a skilled third party. Depending on the nature of the emergency and the effectiveness of any care provided, it may necessitate the engagement of many levels of care, from first responders to emergency medical technicians, paramedics, emergency physicians, and anesthesiologists.
All of the following claims about medical emergencies in settings for dental healthcare are true, but it must be emphasized that doing advanced life support (ALS) activities without the proper training and upkeep of skills is dangerous.
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Getting along with people, the ability to communicate with your peers, organizational skills, and being able to write well are all examples of _____. a. interests b. goals c. transferable skills d. tasks please select the best answer from the choices provided a b c d
Answers
(PLEASE HELP) Why might someone choose to own a business rather than simply working as an employee at one? Compare and contrast the advantages and disadvantages that come with owning a business and discuss. Explore why you personally would or would not like to own a business one day.
Answers
Answer: Being a business owner can be extremely rewarding. Having the ... More importantly, you have the freedom to make the decisions that are crucial to your own business success.
Explanation:
:)
Match each job situation to the type of test described. - ✓ Polygraph ✓ Personality - Physical exam ✓ Skills test ✓ Cognitive ability ✓ Physical skills test ✓ Drug test ✓ Genetic A. To get the drywalling job, you will have to hang, tape, and paste 10 sheets while doing a quality job, all in 3 hr. B. You need to take a test so that we can determine if you might get any known illnesses or diseases in the future. C. Part of the firefighter test is to carry this 50-pound dummy up this ladder in 2 min or less. D. As part of the selection process, you will have to answer questions while being monitored by this machine. E. You have to undergo an exam by our doctor to determine whether you can handle the job. F. You have to go in the bathroom now and put a sample of your urine in this cup so we can test it. G. Part of the selection process is to take our intelligence test. H.A paper-and-pencil test is administered so that we can determine whether you have the right characteristics to succeed on the job.
Answers
The job situation and types of test described: Job Situation Type of Test Described A. To get the drywalling job, you will have to hang, tape, and paste 10 sheets while doing a quality job, all in 3 hr. Physical skills test B. You need to take a test so that we can determine if you might get any known illnesses or diseases in the future.
Genetic C. Part of the firefighter test is to carry this 50-pound dummy up this ladder in 2 min or less. Physical skills test D. As part of the selection process, you will have to answer questions while being monitored by this machine. Polygraph E. You have to undergo an exam by our doctor to determine whether you can handle the job. Physical exam F. You have to go in the bathroom now and put a sample of your urine in this cup so we can test it. Drug test G. Part of the selection process is to take our intelligence test. Cognitive ability H. A paper-and-pencil test is administered so that we can determine whether you have the right characteristics to succeed on the job. Personality A polygraph test is a sort of lie detector test that is used to evaluate a person's truthfulness by monitoring their physiological responses to a series of questions. Personality: The personality test is a type of employment exam that assesses a candidate's personality characteristics, such as their emotions, behavior, and interpersonal skills. Physical exam: A physical examination is a medical exam conducted to determine if a candidate can carry out the requirements of a certain job. It tests a candidate's medical fitness to execute the job's duties. Skills test: A skills test is an assessment that tests a candidate's capacity to perform specific job duties. The skills test may be hands-on, where the candidate completes tasks that are comparable to those they will be required to do in the job.
Cognitive ability: A cognitive ability test is an assessment that measures a candidate's ability to comprehend, learn, and solve issues. The cognitive ability exam is typically used to test a candidate's potential for success in a specific job. Genetic: A genetic test is a type of medical test that detects genetic changes in an individual. Genetic tests can determine whether an individual has an inherited disorder and their potential risk of developing specific conditions in the future. Physical skills test: A physical skills test is a form of assessment that tests an individual's ability to perform physical tasks connected with their job. This test can evaluate an individual's strength, agility, coordination, and endurance. Drug test: A drug test is a form of pre-employment screening that detects the presence of drugs in a candidate's system. This test is frequently conducted to ensure that job applicants are drug-free. Personality: A personality test is a form of pre-employment assessment that evaluates a candidate's character and personal traits. Employers frequently utilize this test to determine whether a candidate has the appropriate personality characteristics for a specific job. A paper-and-pencil test is a type of assessment that evaluates a candidate's cognitive skills, including math, language, and comprehension. It is frequently used to test a candidate's potential for success in a specific job.
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Supplier bargaining power is weaker when O a few suppliers are regarded as the best and most reliable sources of a particular item. there are no good business reasons for buying firms to integrate backward and self- manufacture items they have been buying from suppliers. O industry members are major customers of their suppliers and/or when the item being supplied is a standard item or commodity. a few large suppliers are the primary sources of a particular item. o the cost of switching from one supplier to another is high.
Answers
The statement "Supplier bargaining power is weaker when a few suppliers are regarded as the best and most reliable sources of a particular item" is true.
What is it exactly?Supplier bargaining power is the ability of a supplier to affect the terms and conditions of supply in its favor.
When a few suppliers are regarded as the best and most reliable sources of a particular item, their bargaining power tends to weaken. This is due to the fact that they will be forced to compete with other suppliers to meet the demand for that item. In addition, their ability to dictate the terms and conditions of supply will also be limited.Other factors that can weaken supplier bargaining power include when the industry members are major customers of their suppliers and/or when the item being supplied is a standard item or commodity. This is because there will be many suppliers in the market who can supply the same item or commodity, and buyers can easily switch between them without incurring high switching costs. Conversely, supplier bargaining power tends to increase when a few large suppliers are the primary sources of a particular item, and the cost of switching from one supplier to another is high.In such cases, suppliers have a strong bargaining power, as buyers will be hesitant to switch suppliers due to the high switching costs involved.
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What is economic growth and it's best example?
Answers
Answer:
Economic growth is defined as an increase in a nation's production of goods and services. An example of economic growth is when a country increases the gross domestic product (GDP) per person. The growth of the economic output of a country. As a result of inward investment Eire enjoyed substantial economic growth.
Explanation:
Heres another example, "If the Central Bank cut interest rates, this would provide an incentive for firms to invest (borrowing would now be cheaper). This investment is a component of AD and AD will rise. With higher investment, more people will be employed, and there is a purchase of raw materials."
Hope this helps! <3
Can anyone help me?
Saving money allows u to set more aside in a(n) ____ fund
Emergency
Bond
Exchange
Answers
Answer:
Saving money allows you to set more aside in an Emergency fund.
What is a tariff?
A.
An import
B.
An export
C.
A tax placed on domestic trades
D.
A tax placed on imports or exports
Answers
hurry!! #6
In the record handling system, how is storage different from retention?
Storage involves the keeping of records for an indefinite period and developing policies for who can have access. Retention involves the filing, indexing, and locator systems.
Retention involves the facilities and procedures for keeping inactive records, electronic back-up systems, disaster plans, and security. Storage involves the policies for how long to keep records, which records to keep and which to destroy.
Retention involves the keeping of records for an indefinite period and developing policies for who can have access. Storage involves the filing, indexing, and locator systems.
Storage involves the facilities and procedures for keeping inactive records, electronic back-up systems, disaster plans, and security. Retention involves the policies for how long to keep records, which records to keep and which to destroy.
Answers
Answer:
Storage involves the facilities and procedures for keeping inactive records, electronic back-up systems, disaster plans, and security. Retention involves the policies for how long to keep records, which records to keep and which to destroy.
Explanation:
Discuss problems associated with trade deficit
Answers
Answer:
A trade deficit creates downward pressure on a country's currency under a floating exchange rate regime. With a cheaper domestic currency, imports become more expensive in the country with the trade deficit. Consumers react by reducing their consumption of imports and shifting toward domestically produced alternatives.
You are required to fire a worker for persistent absenteeism, but you know that her absence is because she is caring for her father who is in the advanced stage of Alzheimer’s disease. You feel that the organization is being inhumane in its attitude, but your boss remains insistent. What would you do and why addressing all points above?
Answers
Answer:
It is important that an organization provides work-life balance to its employees and help them in providing assistance for the personal issues that they face which also impact their productivity and work. This creates a relationship between the employee
Explanation:
Why doesn't the Lorax do anything to stop the Once-ler (hint: he's a symbol)? What does this tell us
about the future of business decisions?
Answers
Answer:
The Lorax is a symbol of environmental consciousness and his inaction in stopping the Once-ler represents the failure of society to prioritize the environment over economic growth. This tells us that if we do not take steps to balance economic growth and environmental sustainability, it could lead to long-term negative consequences for the environment and future business decisions.
Explanation:
The Lorax is a children's book by Dr. Seuss that explores the environmental impact of economic growth and consumerism. In the story, the Once-ler begins cutting down Truffula trees to make a product called Thneeds, despite the warnings of the Lorax, who speaks for the trees and the animals that depend on them.
The Lorax represents environmental consciousness and his inaction in stopping the Once-ler represents the failure of society to prioritize the environment over economic growth. The Once-ler's actions are driven by his desire for profit, and he continues to cut down trees despite the negative impact it has on the environment. The Lorax, as a symbol of environmental awareness, is unable to stop the Once-ler from destroying the ecosystem, which ultimately leads to the disappearance of the Truffula trees and the animals that depend on them.
This lack of balance between economic growth and environmental sustainability is a lesson that has implications for future business decisions. If businesses prioritize profit over environmental sustainability, it could lead to long-term negative consequences for the environment, which could ultimately harm the economic viability of those businesses. It is important for businesses to consider the environmental impact of their decisions and take steps to balance economic growth and sustainability for the long-term health of the environment and economy.
start a conversation with me and you get points plus brainliest
Answers
Answer:ok
Explanation:
Hi
Hi! So how long have you been using brainly?
While your hands are on home row, your left hand rests lightly on _____. z x c v j k l ; q w e r a s d f
Answers
it will rest lightly on the pinky finger on the right hand
Answer:
While your hands are on home row, your left hand rests lightly on A S D F AND The Space Bar
Explanation:
Please Mark as BRAINLIEST
is esports better than sports? Explain?
Answers
Answer:
Sports are better than esports
Explanation:
Sports are not only important for physical health but also for mental health.
Esports without a doubt
Courts will not take action against a television show that critiques newly-released books for infringement of copyright because _____.
Answers
the existence of multiple mounds in a distribution is sometimes a sign of which of the following? Two very different groups have been combined into a single collection
Answers
Variability is low when a distribution has a lot of diversity (many observations in a number of different categories). Variability is low when a distribution has limited diversity (many of the observations fall into the same group).
When a variable is categorical, it counts the number of times each of its values appears in a set of data. These counts are known as frequencies. A percentage or percent is obtained by dividing a count or frequency by the entire count and multiplying the result by 100. Variation measures describe the width of a distribution. They specify how widely distributed the values in a dataset are. They are also known as dispersion/spread measurements. In this post, we will look at four different types of variety.
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AWNSER THIS ASAP PLEASE
a commidity is something with cash value that can be bought ir sold
true
false
Answers
Answer:
true so yeah so that is the answer
Answer:
True
Explanation:
In simplest terms, it would mean a useful or valuable thing. And in specific terms, that value cam be bought or sold.
hey can u someone tell me about this app cause im new plzz
Answers
This app is brainly it can help you with school work homework or extra credit if you ask for help but you can also help other people with their work or questions.
You can mark people with a crown give them thanks by pressing the heart button and rate their answers.
define ecommerce in business with example
Answers
Answer:
See below
Explanation:
eCommerce refers to business transactions conducted via internment. eCommerce is the short form of electronic commerce. It is the selling and buying of products and services through the internet platform. eCommerce includes other commercial transactions conducted online such as online/internet banking, online money transfers, online auctions, ticketing, and payments.
An example of eCommerce is the online retail stores where shoppers pick and select merchandise on the retail store's website and pay online. The retail store then organizes for the items to be delivered to the customer's premises.
When participating in the
___________ ___________ ___________ students and FBLA Chapters
are able to compete with students and chapters ranked the best in the state in competitive events.
The election of State officers occurs at this event.
O National Leadership Conference
O Fall Leadership Conference
O State Leadership Conference
O Regional Leadership Conference
Answers
Answer:
At the National Leadership Conference
Explanation:
To move toward a personal vision, what smaller steps should you take?
A. Set smaller, more specific goals.
B. Participate in many internships.
C. Change your lifestyle.
D. Switch your personal vision frequently.
Answers
Answer:
D
Explanation:
how to plan for a turbulent environment surrounding the current pandemic
Answers
Explanation:
The long-running debate between the ‘rational design’ and ‘emergent process’ schools of strategy formation has involved caricatures of firms' strategic planning processes, but little empirical evidence of whether and how companies plan. Despite the presumption that environmental turbulence renders conventional strategic planning all but impossible, the evidence from the corporate sector suggests that reports of the demise of strategic planning are greatly exaggerated. The goal of this paper is to fill this empirical gap by describing the characteristics of the strategic planning systems of multinational, multibusiness companies faced with volatile, unpredictable business environments. In-depth case studies of the planning systems of eight of the world's largest oil companies identified fundamental changes in the nature and role of strategic planning since the end of the 1970s. The findings point to a possible reconciliation of ‘design’ and ‘process’ approaches to strategy formulation. The study pointed to a process of planned emergence in which strategic planning systems provided a mechanism for coordinating decentralized strategy formulation within a structure of demanding performance targets and clear corporate guidelines. The study shows that these planning systems fostered adaptation and responsiveness, but showed limited innovation and analytical sophistication
how did the plaintiff respond when he was uncomfortable with the defendant's actions before?
Answers
The plaintiff responded when he was uncomfortable with the defendant's actions before by showing his dissatisfaction through his physical gestures or signs.
He had disapproved the defendant's conduct and had expressed his disagreement towards the same.The plaintiff in the court would have testified against the defendant in an attempt to defend himself. When a party feels that their rights have been infringed, they have the option to file a lawsuit and defend their rights in court. However, the exact response of the plaintiff can only be determined by the context of the case and the details of the situation.As the question is unclear on which case or scenario it is asking for, so, the above context is given in the general sense, a 150-word answer that may help in better understanding the plaintiff's response when he was uncomfortable with the defendant's actions before.
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