25. please answer all questions round to 4 decimal places
A firm is considering replacing the existing industrial airconditioning unit. They will pick one of two units. The first, theAC360, costs $26,455.00 to install, $5,130.00 to operate per yearfor 7 years at which time it will be sold for $6,941.00. Thesecond, RayCool 8, costs $41,330.00 to install, $2,082.00 tooperate per year for 5 years at which time it will be sold for$8,917.00. The firm’s cost of capital is 6.16%. What is theequivalent annual cost of the AC360? Assume that there are notaxes.
A firm is considering replacing the existing industrial airconditioning unit. They will pick one of two units. The first, theAC360, costs $26,548.00 to install, $5,135.00 to operate per yearfor 7 years at which time it will be sold for $6,971.00. Thesecond, RayCool 8, costs $41,800.00 to install, $2,115.00 tooperate per year for 5 years at which time it will be sold for$9,029.00. The firm’s cost of capital is 5.06%. What is theequivalent annual cost of the RayCool8? Assume that there are notaxes.
A firm is must choose to buy the GSU-3300 or the UGA-3000. Bothmachines make the firm’s production process more efficient which inturn increases incremental cash flows. The GSU-3300 producesincremental cash flows of $25,232.00 per year for 8 years and costs$104,695.00. The UGA-3000 produces incremental cash flows of$27,599.00 per year for 9 years and cost $126,254.00. The firm’sWACC is 9.79%. What is the equivalent annual annuity of theGSU-3300? Assume that there are no taxes.
A firm is must choose to buy the GSU-3300 or the UGA-3000. Bothmachines make the firm’s production process more efficient which inturn increases incremental cash flows. The GSU-3300 producesincremental cash flows of $25,825.00 per year for 8 years and costs$103,756.00. The UGA-3000 produces incremental cash flows of$27,104.00 per year for 9 years and cost $126,558.00. The firm’sWACC is 9.57%. What is the equivalent annual annuity of theUGA-3000? Assume that there are no taxes.
