Galvanized Products is considering purchasing a new computer system for their enterprise data management system. The vendor has quoted a purchase price of $120,000. Galvanized Products is planning to borrow one-fourth of the purchase price from a bank at 13% compounded annually. The loan is to be repaid using equal annual payments over a 3-year period. The computer system is expected to last 5 years and has a salvage value of $5,500 at that time. Over the 5-year period, Galvanized Products expects to pay a technician $28,000 per year to maintain the system but will save $51,000 per year through increased efficiencies. Galvanized Products uses a MARR of 17%/year to evaluate investments. Required:
a. What is the present worth of this investment?
b. Should the new computer system be purchased?

King fisher aviation is evaluating an investment project with the following case flows: $6,000 $5,500 $7,000 $8,000 discount rate 14 percent what is the discounted payback period for these cash flows if the initial cost is 15,000? what if the initial cost is $12,000? what if the cost is $16,000?

wilson's has 10,000 shares of common stock outstanding at a market price of $35 a share. the firm also has a bond issue outstanding with a total face value of $250,000 which is selling for 102 percent of face value. the cost of equity is 11 percent while the preminustax cost of debt is 8 percent. the firm has a beta of 1.1 and a tax rate of 34 percent. what is wilson's weighted average cost of capital?

Nichols inc. manufactures remote controls. currently the company uses a plantminuswide rate for allocating manufacturing overhead. the plant manager is considering switchingminusover to abc costing system and has asked the accounting department to identify the primary production activities and their cost drivers which are as follows: activities cost driver allocation rate material handling number of parts $5 per part assembly labor hours $20 per hour inspection time at inspection station $10 per minute the current traditional cost method allocates overhead based on direct manufacturing labor hours using a rate of $20 per labor hour. what are the indirect manufacturing costs per remote control assuming an method is used and a batch of 10 remote controls are produced? the batch requires 100 parts, 5 direct manufacturing labor hours, and 3 minutes of inspection time.