Purchase Solution

Project Evaluation

Not what you're looking for?

Ask Custom Question

Kinky copies may buy a high-volume copier. The machine costs $100,000 and will be depreciated straight-line over 5 years to a salvage value of $20,000. Kinky anticipates that the machine actually can be sold in 5 years for $30,000. The machine will save $20,000 a year in labor costs but will require an increase in working capital, mainly paper supplies of $10,000. The firm's marginal tax rate is 35 percent and the discount rate is 8 percent. Should Kinky buy the machine?

Purchase this Solution
Solution Summary

This posting gives a detailed solution to the students question.

Solution Preview

The initial investment is $100,000 for the copier plus $10,000 in working capital, for a total outlay of $110,000.

Depreciation expense = ($100,000 - $20,000)/5 = $16,000 per year

The project saves $20,000 in annual labor costs, so the net operating cash flow (including ...

Purchase this Solution
Free BrainMass Quizzes
Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Operations Management

This quiz tests a student's knowledge about Operations Management

View More Free Quizzes
Related BrainMass Solutions

  • Project Management

    82341 Project Management Who should conduct the project evaluation/audit? Why? Who should receive the project evaluation? Why? What is the difference between an evaluation and a post-evaluation?

  • Project Evaluation Variables

    572757 Project Evaluation Variables Identify 3 projects for evaluation and 3 that would not quality for an evaluation. Explain why.

  • Rationale for an Evaluation Tool

    543239 Rationale for an Evaluation Tool Discuss the rationale for an evaluation tool for any evidence-based change project.

  • Monitoring Change

    Evaluation Plan: A plan of action for evaluating project activities, typically before they begin.

  • Performance evaluation for project assignments

    468343 Perfomance evaluation in project management Performance evaluation of employees is an important aspect of human resource management. The usual practice is annual evaluation.

  • Post-Project Evaluations

    An understanding of how people learn would affect project evaluation in the sense that such information would help in gathering and documenting information during project evaluation and termination stage in a more effective manner.

  • Preparing a training document

    How an evaluation of a project for the public sector would differ from an evaluation of a project in the private sector.

  • Evaluating Technical Performance

    To the project manager? A project manager can create his/her own evaluation, but should refrain placing a formal evaluation until after the team after action review occurs.

  • Project evaluation

    What factors would you consider in using it for project evaluation as opposed to company evaluation? Discuss the various methods used for project evaluation and the advantages and disadvantages of each?

  • Project Management and Development

    The different types of evaluation options include, evaluating the economic impact, impact evaluation, analytical evaluation, operative evaluations, evaluation of results, traditional evaluation, and personnel evaluations.

View More Related Solutions