Caliber Lawnmowers is considering the purchase of a new machine costing $ 818 comma 000. The...
Caliber Lawnmowers is considering the purchase of a new machine costing $ 818 comma 000. The company's management is estimating that the new machine will generate additional cash flows of $ 192 comma 000 a year for ten years and have a residual value of $ 56 comma 000 at the end of ten years. What is the machine's payback period? (Round your answer to two decimal places.) . 3.33 years B. 6.60 years C. 4.26 years D. 4.87 years
Homework Answers
| Year | Cash flows | Cumulative Cash flows |
| 0 | (818000) | (818000) |
| 1 | 192000 | (626000) |
| 2 | 192000 | (434000) |
| 3 | 192000 | (242000) |
| 4 | 192000 | (50000) |
| 5 | 192000 | 142000 |
| 6 | 192000 | 334000 |
| 7 | 192000 | 526000 |
| 8 | 192000 | 718,000 |
| 9 | 192000 | 910,000 |
| 10 | (192000+56000)=$248,000 | 1,158,000 |
Payback period=Last period with a negative cumulative cash flow+(Absolute value of cumulative cash flows at that period/Cash flow after that period).
=4+(50,000/192000)
=4.26 years(Approx).
Add Answer to:
Caliber Lawnmowers is considering the purchase of a new machine
costing $ 818 comma 000. The...
Evergreen Lawnmowers is considering the purchase of a new machine costing $806,000. The company's management is...
Evergreen Lawnmowers is considering the purchase of a new machine costing $806,000. The company's management is estimating that the new machine will generate additional cash inflows of $188,000 a year for ten years and have a residual value of $70,000 at the end of ten years. What is the machine's payback period? (Round your answer to two decimal places.) О А. 4.29 years В. 7.24 years С. 3.33 years D. 3.84 years
One year ago, your company purchased a machine used in manufacturing for $ 95 comma 000....
One year ago, your company purchased a machine used in manufacturing for $ 95 comma 000. You have learned that a new machine is available that offers many advantages; you can purchase it for $ 160 comma 000 today. It will be depreciated on a straight-line basis over ten years, after which it has no salvage value. You expect that the new machine will contribute EBITDA (earnings before interest, taxes, depreciation, and amortization) of $ 40 comma 000 per year...
One year ago, your company purchased a machine used in manufacturing for $ 95 comma 000....
One year ago, your company purchased a machine used in manufacturing for $ 95 comma 000. You have learned that a new machine is available that offers many advantages; you can purchase it for $ 160 comma 000 today. It will be depreciated on a straight-line basis over ten years, after which it has no salvage value. You expect that the new machine will contribute EBITDA (earnings before interest, taxes, depreciation, and amortization) of $ 35 comma 000 per year...
One year ago, your company purchased a machine used in manufacturing for $ 105 comma 000....
One year ago, your company purchased a machine used in manufacturing for $ 105 comma 000. You have learned that a new machine is available that offers many advantages; you can purchase it for $ 160 comma 000 today. It will be depreciated on a straight-line basis over ten years, after which it has no salvage value. You expect that the new machine will contribute EBITDA (earnings before interest, taxes, depreciation, and amortization) of $ 60 comma 000 per year...
The management of Wyoming Corporation is considering thepurchase of a new machine costing $375,000. The...
The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability in this situation:YearIncome fromOperationsNet Cash Flow1$18,750$93,750218,75093,750318,75093,750418,75093,750518,75093,750The cash payback period for this investment is:A) 4 yearsB) 5 yearsC) 3 yearsD) 20 years2.The management of Wyoming Corporation is...
6. The Tool Box needs to purchase a new machine costing $1.46 million. Management is estimating...
6. The Tool Box needs to purchase a new machine costing $1.46 million. Management is estimating the machine will generate cash inflows of $223,000 the first year and $600,000 for the following three years. If management requires a minimum 12 percent rate of return, should the firm purchase this particular machine? Why or why not?
One year ago, your company purchased a machine used in manufacturing for $ 105 comma 000$105,000....
One year ago, your company purchased a machine used in manufacturing for $ 105 comma 000$105,000. You have learned that a new machine is available that offers many advantages; you can purchase it for $ 160 comma 000$160,000 today. It will be depreciated on a straight-line basis over ten years, after which it has no salvage value. You expect that the new machine will contribute EBITDA (earnings before interest, taxes, depreciation, and amortization) of $ 35 comma 000$35,000 per year...
First Choice Carpets is considering purchasing new weaving equipment costing $730,000. The company's management has estimated...
First Choice Carpets is considering purchasing new weaving equipment costing $730,000. The company's management has estimated that the equipment will generate cash inflows as follows: Year 1 $204,000 2 204,000 3 266,000 4 266,000 5 150,000 Considering the residual value is zero, calculate the payback period. (Round your answer to two decimal places.) A. 4.61 years B. 3.42 years C. 3.70 years D. 3.21 years
A company is considering the purchase of a new machine for $128,000. Management predicts that...
A company is considering the purchase of a new machine for $128,000. Management predicts that the machine can produce sales of $32,000 each year for the next 8 years.Expenses are expected to include direct materials, direct labor, and factory overhead totaling $7,500 per year plus depreciation of $10,800 per year. The company's taxrate is 38%. What is the payback period for the new machine?-5.22 years.-6.63 years.-9.34 years.-15.06 years.-4.00 years.
First Choice Carpets is considering purchasing new weaving equipment costing $722,000. The company's management has estimated...
First Choice Carpets is considering purchasing new weaving equipment costing $722,000. The company's management has estimated that the equipment will generate cash inflows as follows: Year 1 $218,000 218,000 268,000 268,000 170,000 Considering the residual value is zero, calculate the payback period. (Round your answer to two decimal places) A. 3 69 years B. 3.77 years O c. 4 46 years O D. 3.07 years Click to select your answer
Evergreen Lawnmowers is considering the purchase of a new machine costing $806,000. The company's management is estimating that the new machine will generate additional cash inflows of $188,000 a year for ten years and have a residual value of $70,000 at the end of ten years. What is the machine's payback period? (Round your answer to two decimal places.) О А. 4.29 years В. 7.24 years С. 3.33 years D. 3.84 years
6. The Tool Box needs to purchase a new machine costing $1.46 million. Management is estimating the machine will generate cash inflows of $223,000 the first year and $600,000 for the following three years. If management requires a minimum 12 percent rate of return, should the firm purchase this particular machine? Why or why not?
First Choice Carpets is considering purchasing new weaving equipment costing $722,000. The company's management has estimated that the equipment will generate cash inflows as follows: Year 1 $218,000 218,000 268,000 268,000 170,000 Considering the residual value is zero, calculate the payback period. (Round your answer to two decimal places) A. 3 69 years B. 3.77 years O c. 4 46 years O D. 3.07 years Click to select your answer
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago