You Are Given the Following Present Value Factors at 8

question 54

Essay

You are given the following present value factors at 8 percent,the Tehachapi Glass Company's minimum desired rate of return:

The Tehachapi Glass Company is considering the replacement of a piece of equipment.The old machine has a carrying value of $800 and a remaining estimated life of five years,with no residual value at that time.Present residual value is $200.The new equipment will cost $1,200,including transportation and installation.It has an estimated life of five years,with no residual value then.Annual cash operating costs are $405 for the old machine and $165 for the new machine.Round answers to two decimal places.
a.Compute the present value of the operating cash outflows for the old machine.
b.Compute the present value of the operating cash outflows for the new machine.
c.Compute the present value of the cash operating savings if the new machine is purchased.
d.What is the net present value of the replacement alternative?

Grasp the reasons behind the United States' entry into World War I.

Learn about the major effects of WWI on domestic and international politics.

Recognize the impact of World War I on American society, including shifts in labor, migration, and the role of women.

Comprehend President Wilson's foreign policy and ideological beliefs, such as Wilsonianism.

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Definitions:

Variable Cost

Expenses that vary directly with the level of production or sales volume, such as raw materials and labor.

Transfer Price

The price at which goods and services are traded between departments or subsidiaries within the same organization.

Variable Cost

Costs that vary directly with the level of production or sales volume, such as materials and labor, in contrast to fixed costs which remain constant regardless of production level.

Transfer Price

The price charged for goods or services transferred between departments or subsidiaries within the same company.