Explore BrainMass
Share

Finding EAC values for given proposals

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

An office prints 200,000 pages per year. The Dell brand printer costs $1100 and will produce a total of 600,000 copies before it wears out (3 year life). The Cannon brand machine costs $1,800 and will produce 1,000,000 copies in its 5 year life. Maintenance and material costs are $.05 a page for the Dell machine and $.03 with Cannon machine. The Dell machine has a salvage value of $150 and the Cannon machine will have a salvage value of $225. The required return is 8 percent a year. Which machine should the company acquire? Show numbers and assume year-end cash flows for simplicity.

Net present value for Dell copier_____________ Equivalent annuity for Dell copier_________

Net present value for Cannon copier____________ Equivalent annuity for Cannon copier_________

Which copier should be chosen? _______________

© BrainMass Inc. brainmass.com October 17, 2018, 12:46 pm ad1c9bdddf
https://brainmass.com/business/finance/finding-eac-values-for-given-proposals-589866

Solution Summary

This solution depicts the steps to calculate NPV and EAC values for given proposals in Excel.

$2.19
Similar Posting

Capital Investments in Healthcare

See the attachment.

Why capital project analysis is an integral part healthcare financial management?

Describe the kinds decisions made in capital investment decision analysis?

Explain the four stages of the capital decision making process?

Also, describe the information needed to evaluate a capital investment project?

View Full Posting Details