11- Global Fitters, an international clothing company, has purchased material handling equipment that cost $100,00037 and a salvage value of $18,000 after 10 years. Determine the book value of the equipment after 3 years using:E(a) Straight-line depreciation(b) 150% declining balance depreciation(c) 100% bonus depreciation(d) 7-year MACRS depreciation(e) Global Fitters uses low-cost labor in emerging world economies to manufacture its products. List threepotential ethical issues that are associated with the use of this labor pool.

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Answered: 11- Global Fitters, an international…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The depreciation schedule for certain equipment has been arrived at by various methods. The estimated salvage value of the equipment at the end of its 7 years useful life is $366. Identify the resulting depreciation schedules. YEAR I || 1 2 3 4 5 6 7 IV $1335 2336.25 2775 3632 $1335 2002.5 1982 2273 $1335 1668.75 1416 1423 $1335 1335 1011 891 $1335 1001.25 722 558 $1335 667.5 515 349 $1335 333.75 368 219 Which scheme represents DDB depreciation and how much is the first year depreciation? a. III, $2775 O b. 1, $1335 O c. IV, $3632 O d. II, $2336
An asset costs $14300. What declining-balance depreciation rate would result in the scrap value of $5820 after 4 years? (Units of % required for response)
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Lombard Company is contemplating the purchase of a new high-speed widget grinder to replace the existing grinder. The existing grinder was purchased 2 years ago at an installed cost of $57,400; it was being depreciated under MACRS using a 5-year recovery period. The existing grinder is expected to have a usable life of 5 more years. The new grinder costs $103,300 and requires $5,200 in installation costs; it has a 5-year usable life and would be depreciated under MACRS using a 5-year recovery period. Lombard can currently sell the existing grinder for $69,900 without incurring any removal or cleanup costs. To support the increased business resulting from purchase of the new grinder, accounts receivable would increase by $40,800, inventories by $29,900, and accounts payable by $57,900. At the end of 5 years, the existing grinder would have a market value of zero; the new grinder would be sold to net $28,600after removal and cleanup costs and before taxes. The firm is subject…
Your business buys a delivery van for $28,000. You figure the van will be useful for 5 years and have a value of $5,000 at the end of the 5-year period. What is the (a) basis, (b) useful life, (c) salvage value, (d) depreciable basis, (e) accumulated depreciation at the end of year 2 if you take $4,600 depreciation each year, and (f) the book value at the end of year 2?
A laboratory centrifuge costs $79,000 and has a $5530 salvage value with an 8-year recovery period. Use the double declining balance method with switch over to straight line to tabulate the depreciation schedule at the end of each year. Remember to not depreciate below salvage.
7. An asset has an initial cost of $80,000, a salvage value of $10,000, and a depreciation life of 8 years. a) Determine the book value for year 3 using straight-line depreciation. b) Determine the depreciation for year 3 using double declining balance depreciation. Determine the equivalent annual capital recovery_plus a return of 10% for year 3, assuming double declining balance depreciation. c)
An airfryer costs 45,000 with a useful life of 5 years. If it has a scrap value of 2,500 what is the depreciation using sinking fund method? Assume interest to be 8.5%. Your answer should only be a REAL NUMBER with NO UNITS and NO COMMAS. Round off to nearest 2 decimal places (e.g. 2500.36).
A Machine costing P500,000 has a life expectancy of 5 years. Using Sum of the year’s digits method, find its salvage value when the first year depreciation cost is P100,000.
Equipment associated with manufacturing small railcars had a first cost of $180,000 with an expected salvage value of $30,000 at the end of its 5-year life. The revenue was $620,000 in year 2, with operating expenses of $98,000. If the company’s effective tax rate was 36%, what would be the difference in taxes paid in year 2 if the depreciation method were straight line instead of MACRS? The MACRS depreciation rate for year 2 is 32%.

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