Kpeezy6052 Kpeezy6052

Today at 5:05 AM
Business

Answered

The management of Kunkel Company is considering the purchase of a $27,000 machine that would reduce operating costs by $7,000 per year. At the end of the machine�s five-year useful life, it will have zero scrap value. The company�s required rate of return is 12%.Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using table.Required:1. Determine the net present value of the investment in the machine. (Any cash outflows should be indicated by a minus sign. Use the appropriate table to determine the discount factor(s).)2. What is the difference between the total, undiscounted cash inflows and cash outflows over the entire life of the machine? (Any cash outflows should be indicated by a minus sign.)

Answer :

rafikiedu08 rafikiedu08

Today at 5:09 AM

The net present value of the investment in the machine is $1,767. $8,000 is the difference between the total, undiscounted cash inflows and cash outflows over the entire life of the machine.

Difference = Undiscounted cash inflows - Undiscounted cash outflows = $35,000 - $27000 = $8,000. The undiscounted cash outflow, or the machine's acquisition price, has been set at $27,000. By lowering the cash outflow, the difference between undiscounted cash inflows and cash outflows is estimated.

According to the information provided in the question, the machine would save running expenses by $7,000 a year; as a result, it creates an annual cash inflow. The cash flows for each period of the machine's life are multiplied by the value according to the specified discounting factor. The machine's net present value is ($1,767), which is a negative number. As a result, the machine investment plan shouldn't be approved.

To learn more about Investment visit: https://brainly.com/question/29663453

#SPJ4

Answer Link

Other Questions

To hoist himself into a tree, a 72.0-kg man ties one end of a nylon rope around his waist and throws the other end over a branch of the tree. He then pulls down

What was the political organization of most ancient Greek settlements? A. Greek settlements all fell under the control of the Greek High King. B. Greek settleme

A new restaurant with 138 seats is being planned. Studies show that 59% of the customers demand a smoke-free area. How many seats should be in the non-smokin

To test the resiliency of its bumper during low-speed collisions, a 3 690-kg automobile is driven into a brick wall. The car's bumper behaves like a spring with

psychologists study an individual's mental activities, examining the logical and illogical manner in which we create concepts, solve problems, and make decisio

In which year did Simon commission was started

एक पासे पर एक सम सँख्या आने की प्रायिकता हैः

A simile with 4 exampile .

35. By which of the following components water quality cannot be determinized? A) Temperature B) Acidity C) Dissolved oxygen D) Appearance

why is pluto now? please answer me

As Tom helped himself to a fourth beer, he announced to everyone at the barbecue that alcohol is healthy in moderation. How does the text define “moderation”?

Organized patterns of actions and thoughts, such as kicking a football or realizing that there are many different types of footballs, are defined by Piaget as:

Which of the following is an example of a social barrier to cultural diffusion? exposure to new cultures, traditions, and ideas an increase in global migration

In most states, when a bailor refuses to provide the agreed-on compensation to the bailee, the bailee may ultimately sell the property after proper notice and a

Today, when a customer orders merchandise from an online vendor, the vendor usually sends an immediate order confirmation message by e-mail. Usually within a da

An airplane climbs 100 feet during the first second after takeoff. In each succeeding second it climbs 100 feet more than it climbed during the previous second.

On March 1st, Nichols Corporation purchased 1,000 shares of previously issued common stock, paying $3 per share. On April 1st, Nichols sold 600 shares at $4 per

During the stage of a plant's life cycle where it is a haploid structure, the body of the plant is correctly referred to as a(n)

Given a triangle ABC at A = ( - 1, 3 ) B = ( 1, - 1 ) C = ( 2, 2 ) and if the triangle is rotated 90 ° clockwise about the point ( 4, 1 ), find the new location

A palindrome is a number that reads the same forward and backward. For example, 2442 and 111 are palindromes. If 5-digit palindromes are formed using one or mor