Solution to P14-19 Garrison 13e

Solution to P14-19 Garrison 13e - $32,000 2. Item Year(s)...

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Problem 14-19 (20 minutes) 1. The annual net cash inflows would be: Reduction in annual operating costs: Operating costs, present hand method . .... $30,000 Operating costs, new machine . ................ 7,000 Annual savings in operating costs . ........... 23,000 Increased annual contribution margin: 6,000 boxes × $1.50 per box . .................. 9,000 Total annual net cash inflows . ....................
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Unformatted text preview: $32,000 2. Item Year(s) Amount of Cash Flows 20% Factor Present Value of Cost of the machine . .. Now $(120,000) 1.000 $(120,000) Replacement of parts . . 6 $(9,000) 0.335 (3,015) Annual net cash inflows (above) . ....... 1-12 $32,000 4.439 142,048 Salvage value of the machine . ................. 12 $7,500 0.112 840 Net present value . ...... $ 19,873...
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This note was uploaded on 06/08/2011 for the course ACTG 213 taught by Professor Lawrence during the Spring '11 term at Portland CC.

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