Blog

The opportunity cost is the rate of return on the best rejected project.

A small business sold an equipment for $100,000 after depreciating the equipment using SOYD depreciation method. The federal tax liability on this depreciation recapture is $34,000 if the company also had other taxable income of $150,000 in that year.

The first-year after tax-cash flow is _____________.

The capitalized cost of any investment may be determined using the equation P = A/i where P is the capitalized cost, A is the annual amount and i is the interest rate.

The cost of capital is average interest rate from all sources of funds generated by a company.

Determine the amount of 49-th monthly payment.

The annual maintenance cost of a monument in the state capital is estimated to be $4850. A perpetual i fund of $100,000 is set up to pay for this maintenance expenditure. Determine the interest rate this fund earns if the interest is compounded quarterly.

A continuous improvement team has helped to save $20,000 for the company on a process that will not be changed for the next 10 years. If the team has spent $50,000 on the improvement project, the net present worth (NPW) of savings on this improvement project is $150,000 at a MARR of 5%.

Determine the ROR for a project that has an initial cost of $82,000 and would provide positive cash flows of $12,000 the first year, $14,000 the second year, $16,000 the third year, $18,000 the fourth year, $20,000 the fifth year, and $15,000 the sixth year.

Marginal cost is the cost at which an asset has the minimum cost life.