A company must install one of two systems to reduce costs.  Both systems have useful lives of 5 years and no salvage value.  The cash flows are summarized below. Year System A NCF, $ System C NCF, $ 0 −10,000 −13,500 1 3,000 3,000 2 3,000 3,500 3 3,000 4,000 4 3,000 4,500 5 3,000 5,000 IRR 15.2% 13.4% Assume the firm’s MARR is 12%.  Which project should be selected on the basis of the IRR criterion? [which]

A process engineer needs to purchase a welding machine for a new production line.  The machine costs $41,000 now, has a maintenance cost of $6,000 per year, and will last 7 years.  Any time after year 5 the machine will have a salvage value of $7,000.  The effective interest rate is 6% per year. What is the capital recovery cost of the machine?

To help pay for construction of a new energy-efficient production facility, a mattress manufacturer recently issue $300 million in bonds. The 10-year bonds sold at their face value of $10,000, with a coupon rate of 8% per year, payable quarterly.  An investor purchased one bond. How much money will the investor receive 3 months after purchasing the bond?  $[a] (round to zero decimal places) The investor plans to hold the bond to maturity. What annual rate of return will they realize?  [b]% (round to two decimal places)

A large fashion retailer recently issue $1.3 billion in bonds to help repay funds it had previously borrowed. When the bonds were sold, an enterprising investor purchased a 10-year, $10,000 bond at face value with a coupon rate of 8% per year, payable quarterly. How much money will the investor receive 3 months after purchasing the bond?  $[a] (round to zero decimal places) The investor plans to hold the bond to maturity. What annual rate of return will they realize?  [b]% (round to two decimal places)

The Book Value of an asset is [what]

The Market Value of an asset is [what]

The Units of Production method of book depreciation [what]

QID [q]. Masks Are Us, Inc., has a distribution center in Tempe, Arizona where the company receives bulk orders from suppliers’ factories and ships out products to retail customers. The company just invested $[p]. [y] years from now, the company expects to receive $[z]. What is the annual rate of return for this investment? (Answer as a percentage, round to one decimal place.)

The Salvage Value of an asset is [what]

Ford Motor Company announces that it will have to decrease profit expectations for the current year, as an increase in gas prices has led many people to hold off on buying a new car. Demand for Ford stock will ___________ , and the price of Ford stock will ____________. .