Answered Essay: Connor Company is considering purchasing new equipment for $114,000. The expected life of the equipment is 6 years w

Connor Company is considering purchasing new equipment for $114,000. The expected life of the equipment is 6 years with no residual value. The equipment is expected to generate revenues of $113,000 per year. Total expenses, including depreciation (calculated using the straight-line method), are expected to be $95,000 per year. Connor management has set a minimum acceptable rate of return of 15% a. Determine the equal annual net cash flows from operating the equipment. b. Calculate the net present value of the new equipment. Use the present value of an annuity of $1 table below. If required, round to the nearest dollar. Enter the cost of equipment with a minus sign. If the net present value is negative, enter the amount using a minus sign Present Value of an Annuity of $1 at Compound Interest 12% 0.893 1.833 1.736 1.690 1.626 1.528 2.402 3.465 3.170 3.0372.855 2.589 3.605 4.9174.355 4.1113.784 3.326 4.564 4.968 6.802 5.759 5.328 4.7724.031 5.650 Year 6% 10% 15% 20% 0.943 0.909 0.870 0.833 2.673 2.487 2.283 2.106 4.212 3.791 3.353 2.991 5.582 4.868 4.160 3.605 6.210 5.335 4.487 3.837 10 7.360 6.145 5.019 4.192 Annual net cash flow Present value of cash flows from equipment Less cost of equipment Net present value of equipment

Connor Company is considering purchasing new equipment for $114,000. The expected life of the equipment is 6 years with no residual value. The equipment is expected to generate revenues of $113,000 per year. Total expenses, including depreciation (calculated using the straight-line method), are expected to be $95,000 per year. Connor management has set a minimum acceptable rate of return of 15%. a. Determine the equal annual net cash flows from operating the equipment. $ b. Calculate the net present value of the new equipment. Use the present value of an annuity of $1 table below. If required, round to the nearest dollar. Enter the cost of equipment with a minus sign. If the net present value is negative, enter the amount using a minus sign. Annual net cash flow $ Present value of cash flows from equipment $ Less cost of equipment $ Net present value of equipment $

Expert Answer

 

Annual depreciation = 114000/6= 19000
a
Annual net cash flows = 113000-95000+19000= 37000
b
Annual net cash flow 37000
Present value of cash flows from equipment 140008
Less cost of equipment 114000
Net present value of euipment 26008
Buy Essay
Calculate your paper price
Pages (550 words)
Approximate price: -

Help Me Write My Essay - Reasons:

Best Online Essay Writing Service

We strive to give our customers the best online essay writing experience. We Make sure essays are submitted on time and all the instructions are followed.

Our Writers are Experienced and Professional

Our essay writing service is founded on professional writers who are on stand by to help you any time.

Free Revision Fo all Essays

Sometimes you may require our writers to add on a point to make your essay as customised as possible, we will give you unlimited times to do this. And we will do it for free.

Timely Essay(s)

We understand the frustrations that comes with late essays and our writers are extra careful to not violate this term. Our support team is always engauging our writers to help you have your essay ahead of time.

Customised Essays &100% Confidential

Our Online writing Service has zero torelance for plagiarised papers. We have plagiarism checking tool that generate plagiarism reports just to make sure you are satisfied.

24/7 Customer Support

Our agents are ready to help you around the clock. Please feel free to reach out and enquire about anything.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

HOW OUR ONLINE ESSAY WRITING SERVICE WORKS

Let us write that nagging essay.

STEP 1

Submit Your Essay/Homework Instructions

By clicking on the "PLACE ORDER" button, tell us your requires. Be precise for an accurate customised essay. You may also upload any reading materials where applicable.

STEP 2

Pick A & Writer

Our ordering form will provide you with a list of writers and their feedbacks. At step 2, its time select a writer. Our online agents are on stand by to help you just in case.

STEP 3

Editing (OUR PART)

At this stage, our editor will go through your essay and make sure your writer did meet all the instructions.

STEP 4

Receive your Paper

After Editing, your paper will be sent to you via email.

× How can I help you?