The net present value of the project is ________. (See Table 11.5)
Table 11.5
Nuff Folding Box Company, Inc. is considering purchasing a new gluing machine. The gluing machine costs $50,000 and requires installation costs of $2,500. This outlay would be partially offset by the sale of an existing gluer. The existing gluer originally cost $10,000 and is four years old. It is being depreciated under MACRS using a five-year recovery schedule and can currently be sold for $15,000. The existing gluer has a remaining useful life of five years. If held until year 5, the existing machine's market value would be zero. Over its five-year life, the new machine should reduce operating costs (excluding depreciation) by $17,000 per year. Training costs of employees who will operate the new machine will be a one-time cost of $5,000 which should be included in the initial outlay. The new machine will be depreciated under MACRS using a five-year recovery period. The firm has a 12 percent cost of capital and a 40 percent tax on ordinary income and capital gains.
A) $3,815
B) $2,445
C) $5,614
D) $7,500
A) $3,815
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a. True b. False Indicate whether the statement is true or false
When applying the lower of cost or market method of inventory valuation, market is defined as the ________.
Fill in the blank(s) with the appropriate word(s).
Billboard advertisements often have to compete for a driver's attention with traffic, passengers, radio, or other billboards. Billboard advertising would be described as:
A. lacking any geographic selectivity B. the most flexible advertising medium C. having a high noise level D. having a low noise level E. being a great channel for informative ads
Which of the following is included in the title page of a report?
A. Detailed sampling map B. Date of the report submission C. Total estimated budget of the report D. Statistical calculations E. Questionnaire