How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Linda_us Your Own Question

Linda_us
Linda_us, Finance, Accounts & Homework Tutor
Category: Homework
Satisfied Customers: 7291
Experience:  Post Graduate Diploma in Management (MBA)
19873544
Type Your Homework Question Here...
Linda_us is online now
A new question is answered every 9 seconds

LINDA The Cornchopper Company is considering the purchase

This answer was rated:

LINDA

The Cornchopper Company is considering the purchase of a new harvester. The break-even purchase price is the price at which the project’s NPV is zero. Consider the following facts:



The new harvester is not expected to affect revenues, but pretax operating expenses will be reduced by $18,900 per year for 10 years.


The old harvester is now 5 years old, with 10 years of its scheduled life remaining. It was originally purchased for $48,450 and has been depreciated by the straight-line method.
• The old harvester can be sold for $17,100 today.


The new harvester will be depreciated by the straight-line method over its 10-year life.
• The corporate tax rate is 33 percent.
• The firm’s required rate of return is 10 percent.


The initial investment, the proceeds from selling the old harvester, and any resulting tax effects occur immediately.
• All other cash flows occur at year-end.
• The market value of each harvester at the end of its economic life is zero.

Required:

Determine the break-even purchase price in terms of present value of the harvester.

Break-even purchase price $ ______________
Hi JACUSTOMER

Thanks for requesting me. Whats your deadline for this question.

Regards

Linda
Customer: replied 6 years ago.
Tonight at midnight.
Customer: replied 6 years ago.
Oh, and its 7:50pm where I am right now.
Ok I will post answer in 1-2 hrs time. Do you any more questions to be done today.
Customer: replied 6 years ago.
No that's the last one. Thank you.
THIS ANSWER IS LOCKED!

You need to spend $3 to view this post. Add Funds to your account and buy credits.
Linda_us and other Homework Specialists are ready to help you

Related Homework Questions