A firm is considering an investment in a new machine with a price of $18.1 million to replace its existing machine. The current machine has a book value of $6.1 million, and a market value of $4.6 million. The new machine is expected to have a four-year life, and the old machine has four years left in which it can be used. If the firm replaces the old machine with the new machine, it expects to save $6.80 million in operating costs each year over the next four years. Both machines will have no salvage value in four years. If the firm purchases the new machine, it will also need an investment of $260,000 in net working capital. The required return on the investment is 10 percent and the tax rate is 25 percent. Assume the company uses straight-line depreciation. Required:
a. What is the NPV of the decision to purchase a new machine?
b. What is the IRR of the decision to purchase a new machine?
c. What is the NPV of the decision to keep the old machine?
d. What is the IRR of the decision to keep the old machine?

Companies in the u.s. car rental market vary greatly in terms of the size of the fleet, the number of locations, and annual revenue. in 2011 hertz had 320,000 cars in service and annual revenue of approximately $4.2 billion. the following data show the number of cars in service (1000s) and the annual revenue ($ millions) for six smaller car rental companies (auto rental news website, august 7, 2012). excel file: data14-09.xls if required, enter negative values as negative numbers. a. select a scatter diagram with the number of cars in service as the independent variable. b. what does the scatter diagram developed in part (a) indicate about the relationship between the two variables? c. use the least squares method to develop the estimated regression equation (to 3 decimals). ŷ = + x d. for every additional car placed in service, estimate how much annual revenue will change. by $ e. fox rent a car has 11,000 cars in service. use the estimated regression equation developed in part (c) to predict annual revenue for fox rent a car. round your answer to nearest whole value. $ million hide feedback partially correct

(30 total points) suppose a firm’s production function is given by q = l1/2*k1/2. the marginal product of labor and the marginal product of capital are given by: mpl = 1/ 2 1/ 2 2l k , and mpk = 1/ 2 1/ 2 2k l . a) (12 points) if the price of labor is w = 48, and the price of capital is r = 12, how much labor and capital should the firm hire in order to minimize the cost of production if the firm wants to produce output q = 18?

Even sole proprietors should have at least how many computers? 1 2 3 4