Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem: Acme Corporation is considering buying personal computers. It can either buy from Apple/IBM. The Apple computer costs 1,200 dollar and is expected to last for 5 years. Computer yearly maintenance costs are $200, paid at year's end. The machines are expected to have no salvage value. The IBM computer costs 1,800 dollar and is expected to last 6 years and has yearly maintenance costs of $250. It is expected to have a salvage value of 300 dollar. The firm estimates its workload is such that it should either buy 400 Apple computers or 300 IBM computers. There is expected to be no technological progress. Acme uses straight line depreciation method. Both maintenance costs and depreciation are tax deductible. Its tax rate is 40 percent. Its discount rate for this type of investment is 8 percent. Should the firm buy its computers from Apple or IBM? describe your answer.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M918615

Have any Question? 


Related Questions in Basic Finance

Which of the following statements about the linear

Which of the following statements about the linear regression of the return of a portfolio over the return of its benchmark presented below are correct? Portfolio Parameter Value Beta 1.25 Alpha 0.26 Coefficient of deter ...

The cost of equity for rj corporation is 84 percent and the

The cost of equity for RJ corporation is 8.4 percent and the debt equity ratio is .6. The expected return on the market is 10.4 percent and the risk-free rate 3.8 percent. using the common assumption for the debt beta, w ...

An important source of temporary cash is trade credit which

An important source of temporary cash is trade credit, which does not actually bring in cash, but instead slows its outflow. Vendors often provide discounts for early payment. What is the formula to determine the effecti ...

Do the following problems1calculate the following cross

Do the following problems 1. Calculate the following cross exchange rates: a. If the exchange rates are 200 yen per dollar and 50 US cents per Swiss Franc, what is the exchange rate of yen per franc? b. The dollar is tra ...

Identify a sample of food companies for example you could

Identify a sample of food companies. For example, you could try Campbell Soup (CPB), General Mills (GIS), Kellogg (K), Kraft Foods (KFT), and Sara Lee (SLE). a. Estimate beta and R2 for each company, using five years of ...

Discuss the roles that technology and regulation play in

Discuss the roles that technology and regulation play in aiding financial innovation. Will innovation always occur to exploit loopholes in regulations?

Monetary policymakers observe an increase in output in the

Monetary policymakers observe an increase in output in the economy and believe it is a result of an increase in potential output. If they were correct, what would the appropriate policy response be to maintain the existi ...

Assignmentpublic budget cycledevelop a four- to five-page

Assignment Public Budget Cycle Develop a four- to five-page paper in which you analyze the Public Budget Cycle in a government agency of your choice. Be sure to include each of the phases of the budget cycle (preparation ...

Foreign money market yield explain how the yield on a

Foreign Money Market Yield: Explain how the yield on a foreign money market security would be affected if the foreign currency denominating that security declined to a greater degree.

Convex mechanical supplies produces a product with the

Convex Mechanical Supplies produces a product with the following costs as of July 1, 20X1:     Material $ 5 Labor 3 Overhead 2   $ 10  Beginning inventory at these costs on July 1 was 6,700 units. From July 1 to December ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate