1. CBC is interested in 2 machines. Machine A costs $120,000, lasts 5 years, and has maintenance costs of 37,000 annually for 5 years. A has an equivalent annual cost (EAC) of 70,289. Machine B costs $110,000, lasts 10 years and has maintenance costs of $25,000 annually for 10 years. The cost of capital is 12%. Find the equivalent annual cost for machine B. Which machine should be chosen?2.Dale Inc. has sales of $993,489; operating expenses of $677,630; and depreciation expense of $20,000. The tax rate is 30%. What is the operating cash flow? Round your answer to the nearest dollar.3.You analyze a project and find that the net income of the project is $177,450 per year for the next 5 years. The investment of $1,000,000 will be fully depreciated to a zero book value on a straight-line basis over 5 years. The cost of capital is 12%. Find the profitability index (PI). Do you accept the project? Why or why not?A.0.640; Yes, PI < 1B.1.361; Yes, PI > 1C.0.640; No, PI < 1D.1.361; No, PI >
1. CBC is interested in 2 machines. Machine A costs $120,000, lasts 5 years, and has maintenance costs of 37,000 annually for 5 years. A has an equivalent annual cost (EAC) of 70,289. Machine B costs $110,000, lasts 10 years and has maintenance costs of $25,000 annually for 10 years. The cost of capital is 12%. Find the equivalent annual cost for machine B. Which machine should be chosen?2.Dale Inc. has sales of $993,489; operating expenses of $677,630; and depreciation expense of $20,000. The tax rate is 30%. What is the operating cash flow? Round your answer to the nearest dollar.3.You analyze a project and find that the net income of the project is $177,450 per year for the next 5 years. The investment of $1,000,000 will be fully depreciated to a zero book value on a straight-line basis over 5 years. The cost of capital is 12%. Find the profitability index (PI). Do you accept the project? Why or why not?A.0.640; Yes, PI < 1B.1.361; Yes, PI > 1C.0.640; No, PI < 1D.1.361; No, PI >
1. CBC is interested in 2 machines. Machine A costs $120,000, lasts 5 years, and has maintenance costs of 37,000 annually for 5 years. A has an equivalent annual cost (EAC) of 70,289. Machine B costs $110,000, lasts 10 years and has maintenance costs of $25,000 annually for 10 years. The cost of capital is 12%. Find the equivalent annual cost for machine B. Which machine should be chosen?2.Dale Inc. has sales of $993,489; operating expenses of $677,630; and depreciation expense of $20,000. The tax rate is 30%. What is the operating cash flow? Round your answer to the nearest dollar.3.You analyze a project and find that the net income of the project is $177,450 per year for the next 5 years. The investment of $1,000,000 will be fully depreciated to a zero book value on a straight-line basis over 5 years. The cost of capital is 12%. Find the profitability index (PI). Do you accept the project? Why or why not?A.0.640; Yes, PI < 1B.1.361; Yes, PI > 1C.0.640; No, PI < 1D.1.361; No, PI >
1. CBC is interested in 2 machines. Machine A costs $120,000, lasts 5 years, and has maintenance costs of 37,000 annually for 5 years. A has an equivalent annual cost (EAC) of 70,289. Machine B costs $110,000, lasts 10 years and has maintenance costs of $25,000 annually for 10 years. The cost of capital is 12%. Find the equivalent annual cost for machine B. Which machine should be chosen?2.Dale Inc. has sales of $993,489; operating expenses of $677,630; and depreciation expense of $20,000. The tax rate is 30%. What is the operating cash flow? Round your answer to the nearest dollar.3.You analyze a project and find that the net income of the project is $177,450 per year for the next 5 years. The investment of $1,000,000 will be fully depreciated to a zero book value on a straight-line basis over 5 years. The cost of capital is 12%. Find the profitability index (PI). Do you accept the project? Why or why not?A.0.640; Yes, PI < 1B.1.361; Yes, PI > 1C.0.640; No, PI < 1D.1.361; No, PI >
