Maurice Tutor

(5)

$15/per page/Negotiable

About Maurice Tutor

Levels Tought:
Elementary,Middle School,High School,College,University,PHD

Expertise:
Algebra,Applied Sciences See all
Algebra,Applied Sciences,Biology,Calculus,Chemistry,Economics,English,Essay writing,Geography,Geology,Health & Medical,Physics,Science Hide all
Teaching Since: May 2017
Last Sign in: 402 Weeks Ago, 5 Days Ago
Questions Answered: 66690
Tutorials Posted: 66688

Education

  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

Experience

  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 15 Aug 2017 My Price 11.00

Goltra Clinic

P12-3A Goltra Clinic is considering investing in new heart-monitoring equipment. It has two options: Option A would have an initial lower cost but would require a significant ex- penditure for rebuilding after 4 years. Option B would require no rebuilding expenditure, but its maintenance costs would be higher. Since the Option B machine is of initial higher quality, it is expected to have a salvage value at the end of its useful life. The following estimates were made of the cash flows. The company’s cost of capital is 8%.

 

 

Option A

 

Option B

Initial cost

$160,000

 

$227,000

Annual cash inflows

$70,000

 

$80,000

Annual cash outflows

$30,000

 

$26,000

Cost to rebuild (end of year 4)

$50,000

 

$0

Salvage value

$0

 

$8,000

Estimated useful life

7 years

 

7 years

Instructions

(a)  Compute the (1) net present value, (2) profitability index, and (3) internal rate of re- turn for each option. (Hint: To solve for internal rate of return, experiment with alter- native discount rates to arrive at a net present value of zero.)

(b)  Which option should be accepted?

Answers

Maurice Tutor
(5)
Status NEW Posted 15 Aug 2017 08:08 AM My Price 11.00

Hel-----------lo -----------Sir-----------/Ma-----------dam-----------Tha-----------nk -----------You----------- fo-----------r u-----------sin-----------g o-----------ur -----------web-----------sit-----------e a-----------nd -----------and----------- ac-----------qui-----------sit-----------ion----------- of----------- my----------- po-----------ste-----------d s-----------olu-----------tio-----------n.P-----------lea-----------se -----------pin-----------g m-----------e o-----------n c-----------hat----------- I -----------am -----------onl-----------ine----------- or----------- in-----------box----------- me----------- a -----------mes-----------sag-----------e I----------- wi-----------ll

Not Rated(0)