8. A special-purpose machine is to be depreciated as a linear function of use (units-of- production method). It costs $35,000 and is expected to produce 150,000 units and then be sold for $5,000. Up to the end of the third year, it had produced 60,000 units, and during the fourth year it produced 18,000 units. What is the depreciation deduction for the fourth year and the BV at the end of the fourth year?

8. A special-purpose machine is to be depreciated as a linear function of use (units-of- production method). It costs $35,000 and is expected to produce 150,000 units and then be sold for $5,000. Up to the end of the third year, it had produced 60,000 units, and during the fourth year it produced 18,000 units. What is the depreciation deduction for the fourth year and the BV at the end of the fourth year?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Daily Enterprises is purchasing a $9.8 million machine. It will cost $55,000 to transport and…

A: The term depreciation refers to an accounting method used to allocate the cost of a tangible or…

Q: please use the DDB method A firm is trying to decide whether to keep an item of construction…

Q: 7-8. An asset for drilling was purchased and placed in service by a petroleum production company.…

Q: If depreciation is $33 million and net domestic capital formation is $76 million Calculate gross…

A: The data presented in the question above:- Depreciation = $33 million Net domestic capital formation…

Q: True or False: The process used to allocate the cost of intangible assets, such as patents,…

A: It can be defined as a concept that shows the amount of expenditure and any other sacrifice such as…

Q: Assume $60,000 is going to be invested in each of the following assets, using table 12-11 and table…

A: Answer:- (A). Assets:- Office furniture Category:- 7 - Year MARCS Cost of Asset(A) :-…

Q: 4. A firm purchased $120,000 worth of light general- purpose trucks. The operations of the trucks…

Q: A piece of equipment costs $53,000. Its estimated salvage value after eight years is $13,000. A.…

A: Given: Cost of equipment=$53000 Salvage value=$13000 Life=8 years

Q: A construction equipment costs P180,000. It has a salvage value of P15,000 at the end of its life of…

A: given that, fixed cost: P180000 salvage value: P15000 life of 12years

Q: Your company bought a new machine for $39,000. The machine falls into the 7 - year MACRS category:…

A: MACRS (Modified Accelerated Cost Recovery System): MACRS is a depreciation method used for tax…

Q: 2. An asset is purchased for $500,000. The salvage value in 25 years is $100,000 and the Straight…

A: Value of an asset=$500,000Salvage value in 25 years=$100,000Thus,Value depreciated in 25…

Q: An oil refinery has decided to purchase some new drilling equipment for $570,000. The equipment will…

A: Equipment cost = 570000 Time = 13 years Salvage value = 16000

Q: An asset purchased for $50,000 has a depreciable life of five years, and it has a terminal book…

A: Depreciation refers to fall/decrease in the value of an asset. There are various methods of…

Q: A lumber company purchases and installs a wood chipper for $300,000.00. The chipper's useful life is…

A: The tangible asset value gradually reduces over time or it is a decreased value of something over…

Q: Which of the following is (are) required to calculate MACRSGDS depreciation deductions? I. Property…

A: Under MACRS, a Taxpayers must register deducted tax for devaluation of unmistakable property…

Q: Please correct answer and don't use hand rating

A: Step 1: Conventionally, residential rental property in the United States is depreciated at a rate of…

Q: 37. Vince purchased a 2008 used car for $15,300. This make and model used car straight line…

A: Vince purchased a car for $15,300 and the car reduces its value to zero in 8 years due to…

Question

8. A special-purpose machine is to be depreciated as a linear function of use (units-of-
production method). It costs $35,000 and is expected to produce 150,000 units and then
be sold for $5,000. Up to the end of the third year, it had produced 60,000 units, and during
the fourth year it produced 18,000 units. What is the depreciation deduction for the fourth
year and the BV at the end of the fourth year?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

4. Last month, a company specializing in wind power plant design and engineering made a capital investment of $460,000 in physical simulation equipment that will be used for at least 5 years, then sold for approximately 30% of the first cost. By law, the assets are MACRS depreciated using a 3-year recovery period. By how much will the sale cause TI and taxes to change in year 5? The TI will increase by $ and the taxes will increase by
43-44
2. In 2015 your friend bought a Pear ePhone-X smart phone for $781. Now, in 2021, Sell-My-Stuff says that it is worth $405. (a) Assuming linear depreciation, find a function V(x) for the value of the phone, x years after 2015. (b) How much will the phone be worth in 2022? (c) In what year will the phone be worth $0? Please round to the nearest year.
1.Mr Adrian own a construction company with an asset worth RM400,000. Adrian proudly told to some of his fellow directors that his revenues were typically RM35,000 per month, while his operating cost for fuel was RM8,000 and maintenance RM5,000 per month. The estimated depreciation was RM10,000 per month. An office space similar to Peter 's office space can be rented for RM15,000 per month. If Peter was working for one of his competing construction companies, he would have earned RM5,000 per month. a.List the items that Adrian would consider to compute his explicit costs. b.List the items that Adrian would consider to compute his implicit costs. c.Compute Adrian monthly total economic cost. d.Should Adrian continue his business? Explain.
Give typing answer with explanation and conclusion Chanveida finds a home listed for $48k. Similar homes in good condition sell for $60k (market value). She buys the home and then sells it. Her adjusted cost basis is $44,000, net sell price is $55,000, and overall tax rate is 30%. Assume no financing is used and there is no depreciation taken. Determine Chanveida's Net Profit from sale.
6. CONSOL Energy purchased a new continuous miner to mine coal in one of their underground coal mines for $261,653. Calculate the depreciation using MACRS for year 3. (Use asset class 10.0)
What is the expected after-tax cash flow from selling a piece of equipment if Probst purchases the equipment today for $542,980.00, the tax rate is 34.3 percent, the equipment will be sold in 3 years for $103,000.00, and the equipment will be depreciated to $60,600.00 over 12 years using straight-line depreciation? $212,549.05 (plus or minus $10) $240,125.11 (plus or minus $10) $109,035.08 (plus or minus $10) -$41,878.05 (plus or minus $10) None of the above is within $10 of the correct answer
1b. A machine was purchased 4 years ago for $50,000. The depreciation amount each year was $10,000. The firm that owns the machine no longer has a need for it, but a buyer is now willing to pay $60,000 for it because machines of this type are no longer available. What will be the gain (or loss) on this transaction? Edit Format Table