Westaus Instant Scaffolding Desires to Buy a New Crane and Accessories

question 24

Essay

Westaus Instant Scaffolding desires to buy a new crane and accessories to help install and remove scaffoldings at building sites.The machine sells for $150 000 and requires working capital of $20 000.Its estimated useful life is six years and it will have a salvage value of $35 120.Recovery of working capital will be $20 000 at the end of its useful life.Annual cash savings from the purchase of the machine will be $40 000.
Required:
a.Calculate the net present value at a 14% required rate of return.
b.Calculate the internal rate of return.
c.Determine the discounted payback period of the investment.
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Definitions:

Single-subject Design

A research design that focuses on the responses of a single participant to document the effectiveness of an intervention.

Case Study

A non-experimental investigative method resulting in a description of the past and current functioning of a single individual, generally the result of information gathered through intense interactions over long periods. Variables such as family history, education, employment history, medical history, social relationships, and the patient’s level of psychological adjustment are described. The goal is a description of an individual’s current problem, and its relation to his or her past. A case study seeks to provide a theory concerning the etiology of a patient’s problem or psychological makeup, and/or a course of treatment and outcome. The oldest approach to the study of abnormal behaviour.

Experimentally Accepted

Validated or confirmed through designed and controlled experiments.

Statistically Significant

A mathematical indication that a result is not likely to have occurred by chance alone, according to a predefined threshold of probability (the p-value).