Homework Help Forum: college/accouting

Posted by faye on Sunday, September 27, 2009 at 2:31pm.

A fast-food establishment is thinking of buying a new cooking grill and refrigeration unit. The costs of these new machines are $12,500 and $9,000, respectively. The installation costs of the new equipment will run about $800. It is estimated that 10% more customers can be served with the new equipment, which would mean an additional annual net cash flow of approximately $4,500. The salvage value of the old grill and refrigeration unit is estimated to be $1,000. The firm’s cost of capital is 12%. The equipment should last 10 years, at a minimum. Required: Using the net present value method, should the company purchase the new equipment? (Ignore income tax effects.)

• college/accouting - keisha, Thursday, October 22, 2009 at 7:59pm

  is four eigths greater than four tenths

  
  

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