Question 7A factory is considering partially automating one of its production processes, details can be found in thesummary table below (all dollars are constant and have the value of today):Description/DataS 1,500,0006 yearsS 500,000ItemInvestmentProject lifeSalvage valueCCA rateAnnual savings30%S 1,000,000$ 200,000 per yearS 125,000 per yearS 75,000 per yearLabourAnnual expensesMaterialOverheadMarginal tax rateReal interest rate40%16%AJ Ignoring for now any effect of inflation, what's the after-tax NPW ?B] If the general inflation rate during the next 6 year is expected be 4% annually, sales and operatingcosts are to be increased accordingly. What would be the NPW due to inflation?C] How did the NPW change? Why?

Question 7 A factory is considering partially automating one of its production processes, details can be found in the summary table below (all dollars are constant and have the value of today): Description/Data S1,500,000 6 years S 500,000 30% S 1,000,000 Labour Material Overhead Item Investment Project life Salvage value CCA rate Annual savings $ 200,000 per year S 125,000 per year S 75,000 per year Annual expenses Marginal tax rate Real interest rate 40% 16% A] Ignoring for now any effect of inflation, what's the after-tax NPW ? B] If the general inflation rate during the next 6 year is expected be 4% annually, sales and operating costs are to be increased accordingly. What would be the NPW due to inflation? CJ How did the NPW change? Why?

Question 7 A factory is considering partially automating one of its production processes, details can be found in the summary table below (all dollars are constant and have the value of today): Description/Data S1,500,000 6 years S 500,000 30% S 1,000,000 Labour Material Overhead Item Investment Project life Salvage value CCA rate Annual savings $ 200,000 per year S 125,000 per year S 75,000 per year Annual expenses Marginal tax rate Real interest rate 40% 16% A] Ignoring for now any effect of inflation, what's the after-tax NPW ? B] If the general inflation rate during the next 6 year is expected be 4% annually, sales and operating costs are to be increased accordingly. What would be the NPW due to inflation? CJ How did the NPW change? Why?

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: The Basic Tools Of Finance

Section: Chapter Questions

Problem 3CQQ

See similar textbooks

Similar questions

How much money would have to be placed in a sinking fund each year toreplace machine B at the end of 25 years if the fund yields 10% annualcompound interest and if the first cost of the machine is assumed toincrease at a 6% annual compound rate? (Assume the salvage value doesnot change.) Group of answer choices A. $3,600 B. $4,110 C. $2,400 D. $7,000
Answer both part 1 &2 i will rate PART A: Ahmed make an annual contribution of $3,000 to his savings account at the end ofeach month for 10 months. If the account earns 7% interest monthly, how much can be atthe end?PART B:Ahmed buy a gold for $2000 and sell it for $2500. it takes 7 years, what would bethe compound annual rate of return on your investment?
SHOW COMPLETE DETAILS AND SOLUTION . 4. A new civil engineer employee start a savings plan in which he saves P 10,000 eachyear for 15 years. He makes her first payment at age 22 and after paying for 15 yearsshe leaves the accumulated sum in the savings plan until she reach age 65. If thesavings plan pays 10% per year, how much will be in the savings account when sheage 65?5. Mr. Jo needs P 4,000,000 immediately to pay for a new home. Having insufficientfund for this, he borrows P 2,000,000 from an insurance company and repay the loanevery six months for 15 years, the first payment being at the end of 8 years from now.If the insurance company charged him 8% compounded semiannually, how much isthe amount of each payment?
4:09 470 3 of 3 Assignment 2-2022.pdf 420 ct the cash flow diagram for A mechanical device will cost $20,000 when purchased. Maintenance will cost $1000 per year. The device will generate revenues of $5000 per year for 5 years. The salvage value is $7000. 8. Each year Exxon-Mobil expends large amounts of funds for mechanical safety features throughout its worldwide operations. Carla Ramos, a lead engineer for Mexico and Central American operations, plans expenditures of $1 million now and each of the 2 next 4 years just for the improvement of field-based pressure- release valves. Construct the cash flow diagram and find the equivalent value of these expenditures at the end of year 4, using a cost of capital estimate for safety-related funds of 12% per year. 9. An electrical engineer wants to deposit an amount P now such that she can withdraw an equal annual amount of A1 $2000 per year for the first 5 years, starting 1 year after the deposit, and a different annual withdrawal of A2 =…
A man, pondering of retirement, determined that 300,000/year will be sufficientfor him to live without the need to work. Upon his retirement, howmuchmusthe invest in a bank that offers 5% interest rate to receive the amount everyyearcontinuously?
can you help me with this qustion Gina deposits her inheritance into an account earning interest of 4% compounded annually. She will notwithdraw the money until the balance has doubled. How long will Gina have to leave the money in theaccount
14 Calculate the term of each annuity: Future Value Present Value Size of Payment a. $0 $8,500 $675 b. $23,500 $0 $491.25 c. $0 $962 $100 d. $85,000 $0 $2,500 Interest Rate 10.75% 8.25% 10.00% 13.00% Payment and Conversion Period 3 months 1 month 1 week 6 months Term (N) ? ? ? ?
8. A: cost $10,000 today and pays back $ 11,500 two years from now B: cost $8,000 today and pays back $ 4,500 each year for two years from now If interest rate 5% is used, which alternative is better? B with present worth $ 367 B with present worth $431 A with present worth $431 A with presentworn S 307
229 I invest $10,000 in an ассоста years. The interest is 5% annually. How money will I have in the end ? much
can you help me with this qustion An account was opened with $1,000 three years ago. Today, the account balance is $1,150.30. If theaccount earns simple interest, how long will it take until the account has earned a total of $501 ininterest?
Property taxes in a particular district are 2% of thepurchase price of a home every year. If you just purchased a $150,000 home, what is the present value ofall the future property tax payments? Assume that thehouse remains worth $150,000 forever, property taxrates never change, and a 4% interest rate is used fordiscounting
Question 9 Copy of What is the present worth of a $1.000 armuity over a 15 year period, f the interest rate is 10 Oa PW-$2.000 OL PW S4.000 PW 57.606 Od PW- $1703