Marc Corporation Wants to Purchase a New Machine for $400,000

question 108

Essay

Marc Corporation wants to purchase a new machine for $400,000. Management predicts that the machine can produce sales of $275,000 each year for next 5 years. Expenses are expected to include direct materials, direct labor, and factory overhead (excluding depreciation) totaling $80,000 per year. The company uses MACRS (modified accelerated cost recovery system) for depreciation. The machine is considered 3-year property and is not expected to have any significant residual at the end of its useful life. Marc's income tax rate, t, is 40%. Management estimates that the weighted-average cost of capital (WACC) is 10%. A partial MACRS depreciation table is reproduced below. $$\begin{array} { | l | l | l | } \hline \text { Year } & \text { 3-year property } & \text { 5-year property } \\\hline 1 & 33.33 & 20.00 \\\hline 2 & 44.45 & 32.00 \\\hline 3 & 14.81 & 19.20 \\\hline 4 & 7.41 & 11.52 \\\hline 5 & & 11.52 \\\hline 6 & & 5.76 \\\hline\end{array}$$ Required:
1. What is the estimated net present value (NPV) of the investment (rounded to the nearest whole dollar)? (Note: PV $1 factors for 10% are as follows: year 1 = 0.909; year 2 = 0.826; year 3 = 0.751; year 4 = 0.683; year 5 = 0.621; the PV annuity factor for 10%, 5 years = 3.791.) Assume that all estimated cash flows occur at year-end.
2. What is the present value payback period (rounded to two decimal places)?

Explain the significance of water and other compounds in toxicology, recognizing the potential of water as a toxin under extreme conditions.

Understand the concept and calculation of lethal dosage (LD50) for toxins and its significance in toxicology.

Recognize the types of poisons, including teratogens, and their effects on living organisms.

Understand how catalysts affect equilibrium reactions and the speed at which equilibrium is achieved.

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Definitions:

Lowell Mill

Factories in the 19th-century United States, located in Lowell, Massachusetts, known for employing young women, known as "Lowell Mill Girls," under strict conditions to produce textile products.

Moral Wrong

An action or behavior that is considered unethical or immoral based on societal norms or personal ethics.

Economic Revolution

A radical change in economic practices, policies, and systems, often resulting in significant shifts in wealth and power structures.