1.

- A port company dedicated to the transport of containers coming from

commercial ships, bought a crane four years ago to provide loading services and
merchandise download at an acquisition cost of $750,000 dollars (USD), estimating
at the time of purchase that the crane would have a useful life of 15 years and a value of
savings of $150,000 at the end of that period. Generates annual income of $175,000.
Due to the increase in international cargo transport at that port, it is
It is necessary to increase the transport capacity of the crane, which is currently being analyzed.
the purchase of a crane with greater capacity to replace the current one, whose price of
acquisition would be $985,000 USD, with a salvage value of $50,000 at the end of a
11-year analysis period, which would generate annual income of $255,000. The current crane
It could be sold at the time of replacement for $428,000. Taxes of 38% are paid and the
The company's TMAR is 2.5% per year. Determine the economic feasibility of the replacement.

2.- The editorial department of a public university needs to buy a large printer.
capacity, whose acquisition cost is $120,000, to print notes of different
subjects and sell them to the students. It is expected that the profits from the sale of notes
they are $57,000 after deducting expenses for paper and tape. As the
the university does not have much financial resources, it can buy the printer for
credit, for which the equipment seller offers two plans: in the first, it would be settled
the loan by making six equal annual payments, with the first payment at the end
from the first year; in the second plan, an equal amount of capital would be paid each year,
more interest on outstanding balances. The loan interest is 15% per year. The printer
it could be sold for $33,000 at the end of six years. Determine what the best payment plan is
convenient for the university if it sets a TEMAR = 12% and the analysis period is
six years. The university is public and does not pay taxes.

3.- A publishing company wants to replace an old offset machine that is currently
finds, fully depreciated, meaning its salvage value is zero. The new
the equipment would increase the benefits before depreciation and taxes by $33,000 annually
during its entire useful life calculated to be nine years. Its price is $166,500 without value of
salvage at the end, If the company pays taxes at a rate of 47% and its required rate of return (TMAR) is 11%,
establish the convenience of replacement: a) if straight-line depreciation is used; b) if it is
depreciated by SDA.

5.- A company needs to purchase a packaging equipment that will generate income of
$120,000 annually for 10 years; operating costs are $40,000 annually for
10 years. The equipment costs $220,000, has an estimated useful life of 10 years, with a value of
saving of $20,000 at the end of that period. It depreciates using the sum of the digits method.
digits of the years. The company pays taxes at a rate of 50% and its TMAR=10%. For
To acquire the equipment, a loan of $70,000 is requested at an annual interest rate of 8%.
which should be settled in six years through equal payments at the end of each year, the first
one year after the purchase. Determine the NPV of the investment with financing and TMA.
mixed.
4.- A company that sells medical products currently has a sales system
traditional consisting of medical representatives visiting clinics and hospitals
offering the products in person. However, the company wants to increase
substantially the sales, for which it has considered installing and adopting the e-
business to sell directly to clinics and hospitals without intermediaries, in addition to
maintain the traditional sales system. The figures that the company has to make the
the decision is as follows: current annual revenue from sales of 25.8 million pesos
Total annual costs of $14.2 million, the annual depreciation charges that it has
The company's assets are worth $380,000 per year. If the company does not
makes new investments in fixed assets in the next eight years, considers that the value of
The company's rescue would be $3.5 million. With e-business, annual sales will
they could increase up to $36.7 million and the total annual costs would also increase
up to a total of $23.4 million pesos due, basically, to the increase in production. The
The installation and implementation of the e-business have a cost of $2.4 million pesos with a value
from zero saving at the end of an eight-year analysis period. For the purposes of
financial planning, the investment in e-business will depreciate straight-line over
of the eight years. The company pays taxes of 40% and considers a required minimum return of 10% for
all investments, Determine the economic feasibility of the purchase and adoption of the
e-business calculating the NPV and the incremental IRR.

6.- A food company works with a vacuum packaging machine that it bought.
seven years ago for $84,000. Its useful life at the time of purchase was 12 years and a
VS = 0. Its use has been so intense that it can now be sold for only $12,000, which is why
It is being considered to replace it with a packaging machine that will reduce costs by $53,000 per year.
it produces fewer defective products during the time it remains in use.
The machine has a cost of $332,000, a useful life of five years, and a value of
saving of $32,000 at the end of that period. In the case of both machines, it was used
straight-line depreciation. The company pays taxes at a rate of 10% and its TMAR is
of 3%4. Determine the economic feasibility of the replacement for a period of five
years.

A computerized lathe was purchased to increase the productivity of a company.

mechanical metal. It is expected to generate profits before depreciation and taxes.
for $13,500 the first year, with increases of $2,500 annually as it intensifies
use. The lathe has a value of $54,000 and a salvage value of $6,000 at the end of its life
four-arch tool. It depreciates using the sum of the years' digits method. For
You can take out a loan of $20,000 for which a 15% interest rate would be charged.
annual interest, agreeing to pay only a sum that includes principal plus interest at the end
of four years, in order to pay off the loan. If the company pays taxes at a rate of
45% and its TMA is 18%, calculate the NPV of the purchase: a) with financing and mixed TMA;
b) without funding.

8.- A company that produces dried fruit wants to buy a tunnel dryer.
to carry out its operations. The dryer will cost $63,000 and will have a value of
salvage of $3,000 at the end of its useful life of 15 years. If it depreciates straight line,
The company pays taxes at a rate of 40% and its TMAR is 8%. What should be the benefit?
before depreciation and taxes that the dryer produces to justify its purchase?
9.- A equipment was purchased three years ago at a cost of $120,000 with a useful life of 10 years.
and a salvage value of $20,000 at the end of that period; it can be sold in this
moment at $70,000. Currently, it generates an income of $260,000 per year, with costs of
operation of $130,000 annually. Due to producing a large amount of waste, it
Have you thought about replacing it with new equipment that has an acquisition cost of
$170,000, a salvage value of $30,000 at the end of its seven-year useful life that would raise
the income is $330,291 per year, with operating costs of $165,000 annually. Both
equipment depreciates straight-line, taxes of 50% are paid and the company's TMAR
It is 20%. Determine the economic convenience of the replacement.

10.- The multinational company Bitter Tax, dedicated to manufacturing computers, thinks
to establish a subsidiary in a country in Latin America, where he knows he can request a rate
special tax in exchange for investing and creating jobs. The plant that will be installed is of
same size, regardless of the selected country. The estimated figures in dollars
Americans are as follows: an investment of $1.2 billion, which will depreciate by
straight line. For planning purposes, calculate a useful life of 10 years for all the
investment, with a salvage value of $100 million at the end of that period. It is expected that
the benefits before depreciation and taxes are $370 million a year, for the entire
the 10-year planning horizon, what is the tax burden that should be requested?
company to the country where the investment is made, so that it can obtain its TMAR of 20%.
annual?

11.- The company that produces fine alcoholic beverages TAC Allege has studied the
acquisition of a new distiller to improve the flavor and quality of its products
action by which he expects his pre-tax profits to increase
$93,000 per year for a period of six years. The distiller will have no salvage value.
at the end of its useful life of six years and will depreciate using the sum of the digits method
years. If TAC Allegue pays taxes at a rate of 40% and its TIMAR is 12%, what is the
maximum amount they will be willing to pay for the distiller, to at least win their
TMAR?

13.- A basic education school does not know whether to rent or buy a minibus for it.
transportation of the students. If they rent it, they must make a uniform payment in advance;
Moreover, the contract specifies that the school will cover minor maintenance, which
it rises to $12,000 per year, payable at the end of each year. If the purchase option is chosen, the
The minibus will cost $50,000 and all maintenance will be covered by the school.
will rise to approximately $18,000 per year. With the purchase, you will be able to depreciate the vehicle.
straight line and it is estimated that it will have a salvage value of $10,000 at the end of
its useful life of four years. If the school pays taxes at a rate of 45%, its required rate of return is
10% and its planning horizon is four years, determine the uniform payment that
must be made in advance to the vehicle lessor, so that the rental alternatives
and purchases are indifferent.
12.- The information chain Neglected News wants to increase its news services and
It is essential to have three high-speed photocopiers. You can have them at your
service through three different forms:

a) For a lease agreement, for which I would pay $8,000 a year for each
copier, payable in advance.
b) A cash purchase, for which $21,000 would be paid for each machine, in which
that the equipment would depreciate by the sum of the digits of the years method, hoping
that each machine would have a salvage value of $1,000 at the end of its useful life
five years old.
c) By making a down payment of $10,000 per machine and paying the balance in one go.
amount at the end of the fifth year, amount that would include principal and interest. If you take this
the option would also depreciate the machines by SDA and they would have the same value
rescue of $1,000 at the end of the five years. The interest charged by the
financing is at 20% annual.

Regardless of the option you choose, Neglected News will increase its revenue sooner.
of depreciation and taxes at $30,000 per year for five years. If this company
Pay taxes at a rate of 40% and his TMAR is 12%, what alternative should
select?

14.- A medium-level government school has an offset printing team.

with which academic courses are reproduced and sold to students. The current team,
With 10 years of use, it can continue working for at least another 10 years with minimal downtime.
production and print quality. However, its obsolescence generates income from
$22,000 with production costs of $12,000 per year. One alternative to increase the
production is to acquire equipment with current technology that costs $120,000, but that
would increase revenues to $46,000 a year, although maintenance and production costs
they would also increase to $18,000 a year. The school does not pay taxes and to evaluate its
investments use a discount rate of 5%. Determine if it is convenient to replace the equipment
used: a) for a period of nine years; b) for 8 years.

15.- The Japanese bicycle manufacturer Tzuda N.C. Co. has a puncing machine.
electric welding machine that was purchased five years ago, at a price of $30,000; it had a lifespan
Expected useful life of 15 years, with no salvage value at the end of that period. The pointer
it is in such good condition that despite having a current book value of $20,000, it is possible
sell it in the market for $25,000. It is thought to be replaced due to its low capacity.
production and that the demand for bicycles has grown rapidly. It is possible
to get a faster puncher at a cost of $80,000 that would increase sales
from $64,800 to $77,500 per year and would slightly decrease production costs from $34,300
a $31,000 a year. The new machine has an expected lifespan of 10 years and a value of
zero salvage. Both machines depreciate straight-line. If taxes are paid.
at a rate of 40% and the TMAR is 18%, a) Should Tzuda N.C. Co. replace the
used straight-line depreciation? b) If instead of using straight-line, SDA is used for the depreciation,
How is the decision modified? Do not forget that when using SDA, the current book value of the
used machine changes, but its market value remains at $25,000.