5. Resistance to failures of equipment worth $8000 is 75%. Likelihood of an incident is once every four years. What is the value of ALE? 6. Due to equipment failure, the probability of data loss is 0.35. Likelihood of an incident is twice a year. The value of the assets is estimated as $30,000. What is the value of ALE?

5. Resistance to failures of equipment worth $8000 is 75%. Likelihood of an incident is once every four years. What is the value of ALE? 6. Due to equipment failure, the probability of data loss is 0.35. Likelihood of an incident is twice a year. The value of the assets is estimated as $30,000. What is the value of ALE?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

A company that manufactures automobile headlight housings invested $750,000 in an automated assembly line. The resultant savings was $190,000 per year for 6 years. If the equipment had a salvage value of $50,000, what rate of return per year did the company make?
You purchased an industrial oven five years ago for $80,000. O&M costs were $20,000 for this year but are expected to increase by $750 each year for the next five years. The current salvage value of the oven is $40,000 but expected to decrease by 10% in each of the following years of use (e.g. $36,000 after one year, $32,400 after two years, so on). At i = 10%, find the remaining economic life for this asset. A) 1 years B) 2 years C) 3 years D) Answers A, B and C are not correct
A large standby electricity generator in a hospital operating room has a first cost of $67,250 and may be used for a maximum of 6 years. Its salvage value, which decreases by 15% per year, is described by the equation S = 67,250(1 − 0.15)n, where n is the number of years after purchase. The operating cost of the generator will be constant at $9,000 per year, and the interest rate is 12% per year. Determine the economic service life and associated AW values. The economic service life is 6 years and the AW value is $−__.
A small northern California consulting firm wants to start a recapitalization pool for replacement of network servers. If the company invests $14,000 at the end of year 1 but decreases the amount invested by 5% each year, how much will be in the account 5 years from now? Interest is earned at a rate of 12% per year. Five years from now, the account will have $.
A three-year-old small crane is being considered for early replacement. Its current market value is $17,500. Estimated future market values and annual operating costs for the next five years are given in the table below. What is the economic life for this crane if the interest rate is 5.1% per year? Year 0 Market Value Annual Operating Cost $17,500 1 $15,110 $4,700 2 $12,930 $4,809 3 $10,110 $4,883 4 $7,400 $4,997 5 $- $5,095
Economics Suppose a firm is investing in a pollution control technology to meet a regulation in three years that can reduce its emissions for any given level of output. The technology costs $40,000 to install now, but will cost only $10,000 three years later due to expected innovations. If the firm does not comply, it will have to pay fines with the amount of $5000 in the next year, $10,000 in two years, and $15,000 in three years. With an interest rate of 3%, should the firm install this technology now or later?
A machine was purchased 4 years ago. Its current market value is $14,000. Estimated future market values and annual operating costs for the next 5 years are given in the following table. What is the Economic service life of the machine if a 12% per year return is required? YearMarket Value,$Annual Operating cost,$ 10084 2 2684 2700 3000 3500 4900 1 8084 6000 3 4 2000 5
Chaquille's K-House, Inc. made an investment in a project with an initial cost of $11,064,450. This investment was for 8 years and had no residual value. The company expects to receive yearly net cash inflows of $2,603,400. Management is requiring a return of 12% on the investment. (Round your answers to two decimal places when needed and use rounded answers for all future calculations).
A computer depreciates by 40% per year. If you bought a computer for $1800, find the value of the computer in five years
what is the NPV of the new construction equipment? Initial cost = $100k, Salvage Value in 6 yrs = $25K, Increase Yearly Net Sales = $25k, Bank Rate = 10%
A company that manufactures brushless blowers invested $650,000 in an automated quality control system for blower housings. The resultant savingswas $160,000 per year for 5 years. If the equipment had a salvage value of $50,000, what rate of return per year did the company make?
The equipment was purchased 3 years ago by the Ajax Corporation for $1,20,000. When purchased, it had an expected service life of 10 years, an estimated salvage of $25,000 after 10 years and AOC of $30,000. Current account book value is $80,000. The system is deteriorating rapidly; 3 more years of use and then salvaging it for $10,000 are now the expectations. The AOC is averaging $30,000. An improved version is offered today for $100,000 with a trade-in of $70,000 for the current system. The price goes up next week to $110,000 with a trade in of $70,000. The engineer estimates the new equipment to have useful life of 10 years, a salvage of $20,000, and an AOC of $20,000. A $70,000 market value appraisal of the current machine was made today. What would be the decision, if a replacement study is made today.