Rayburn corporation is considering the purchase of new, Ask an Expert

Statistics

Rayburn Corporation is considering the purchase of new machine which has expected life of five years with a standard deviation of two years. The machine will cost $40,000 and will generate the pre-tax income of $10,000 annually. The tax rate of Rayburn is 40% and its cost of capital is 7%. Rayburn will depreciate machine on straight-line basis over five years with no residual value. Compute the probability that the machine will have life of between four and seven years. Is the machine acceptable if it runs for only four years?

View complete question

Statistics and Probability, Statistics

Category:- Statistics and Probability
Reference No.:- M918210

Have any Question?Write your Review or question?

Related Questions in Statistics and Probability

1 what is the ytm for a 14-year semi-annual bond that pays

1. What is the YTM for a 14-year semi-annual bond that pays $35 every six months and has a purchase price of $980.000? Face value is $1,000. 2. A person wants to put aside $500 at the beginning of each month for 10 years ...

Why is sustainability in the sport industry linked to the

Why is sustainability in the sport industry linked to the green movement?

Analysis of variance anovaan investigator compares the

Analysis of variance (ANOVA) An investigator compares the difference in the amount of 20% sucrose solution removed by pollinators between unadulterated solution and solutions with 50, 100, 150, and 200 parts per million ...

A random sample ofnbsp77nbspeighth grade students scores on

A random sample of 77 eighth grade? students' scores on a national mathematics assessment test has a mean score of 290. This test result prompts a state school administrator to declare that the mean score for the? state' ...

Military often provides a form of qualification test for

Military often provides a form of qualification test for people to enter special career fields. Suppose that a large number of people have taken a test for a certain career field. Suppose that the mean of all people taki ...

A firm evaluates all of its projects by applying the irr

A firm evaluates all of its projects by applying the IRR rule. Year Cash Flow 0 -$ 153,000 1 78,000 2 67,000 3 49,000 What is the project's IRR? If the required return is 11 percent, should the firm accept the project? Y ...

Dave and ellen are newly married and living in their first

Dave and Ellen are newly married and living in their first house. The yearly premium on their homeowner's insurance policy is $400 for the coverage they need. Their insurance company offers a discount of 8 percent if the ...

A sample of 100 people is classified by gender malefemale

A sample of 100 people is classified by gender (male/female) and by whether they are registered voters. The sample consists of 80 females and 20 males, and has a total of 60 registered voters. If these data are used for ...

A rainstorm in portland oregon wiped out the electricity

A rainstorm in Portland, Oregon, wiped out the electricity in 10% of the households in the city. Suppose that a random sample of 70 Portland households is taken after the rainstorm. Estimate the number of households in t ...

A shipment contains 11 tvs of which two are defective a

A shipment contains 11 TV's, of which two are defective. A sample of three TV's is selected at random. In how many ways can no defective TV's be chosen?

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

Recent Questions

Ask Statistics and Probability Expert