Feed the Hungry Foundation

question 110

Essay

Feed the Hungry Foundation
Feed the Hungry Foundation is a non-profit organization that has a cost of capital of 10 percent.The foundation is considering the replacement of a piece of equipment.The old machine has a book value of $3,000 and a remaining estimated life of 5 years with no salvage value at that time.The salvage value of the old machine is currently $1,500.The new equipment will cost $10,000.It has an estimated life of 5 years with no salvage value then.Annual cash operating costs are $4,000 for the old machine and $2,000 for the new machine.
Refer to Feed the Hungry Foundation.What is the present value of salvage value of the old machine if it is replaced now?

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Definitions:

Adaptation-Level

A theory suggesting that people adapt to new stimuli, and their judgments of stimuli are influenced by past experiences.

External Locus

A psychological concept where an individual believes that control over their life events and outcomes comes from external forces or influences.

Blood Pressure

The force exerted by circulating blood on the walls of the body's arteries, essential for transporting blood throughout the body.

Stress Hormone

Biochemical substances, such as cortisol, released into the body in response to stress, affecting physiological and psychological functions.