Company X is purchasing a new machine for $949000. The annual expenses, in today's dollars, is estimated to be 92400. Assume that the inflation rate is 0.08 and the company X' real MARR is 0.11 per year. The depreciation for this type of machine is best represented using the declining-balance method where R= 0.29. The project is estimated to last for 9 years. a) What is the BV at year 7? b) What is the PW of these expenses? e) What is the actual value of MARR? Knowing that the project will last for 9 years, what minimum Uniform Annual Revenue, in actual dollars, would this machine need to generate to benefit?

Company X is purchasing a new machine for $949000. The annual expenses, in today's dollars, is estimated to be 92400. Assume that the inflation rate is 0.08 and the company X' real MARR is 0.11 per year. The depreciation for this type of machine is best represented using the declining-balance method where R= 0.29. The project is estimated to last for 9 years. a) What is the BV at year 7? b) What is the PW of these expenses? e) What is the actual value of MARR? Knowing that the project will last for 9 years, what minimum Uniform Annual Revenue, in actual dollars, would this machine need to generate to benefit?

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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