A certain machine was bought for $225,000.Delivery and installation costs are $15,000 and#6, 500, respectively. If the machine has a useful lifeof 20 years with a scrap value of $30,000, what is itsbook value after 18 years? Use the SYD Method.A. P39018.44B. P35447.94C. P31105.23D. #33092.86

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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a. A track dozer cost $195,000 to purchase. Fuel, oil, grease, and minor maintenance are estimated to cost $45.00 per operating hour. A major engine repair cost $30,000 will probably be required after 7,500 hr of use. The expected resale price (salvage vale) is 25% of the original purchase price. The machine is expected to have a useful life of 12,000 hr. Hoe much should the owner of the machine charge per hour of use, if the machine is expected to operate 1500 hr. per year? The company's cost-of-capital rate is 7.5%. (I have provided an extra blank sheet for your solutions)
A presently owned machine (Defender) has a useful life of 3 more years. Annual worth calculations for 1, 2, and 3 years are made and the following results are obtained. AW1 = $ 42,400 AW2= $44,590 AW3 = $47,356 A new improved machine (Challenger) that can be purchased will have a maximum useful life of 4 years. Annual worth calculations for 1, 2, 3, and 4 years yield the following results. AW1 = $85,000 AW2 = $53,571 AW3 = $43,127 AW4 = $37,928 when should the presently owned machine (Defender) be replaced? Select one: a. Replace now b. Replace 1 year later c. Replace 3 years later d. Replace 4 years later e. Replace 2 years later
09. Two processes are being considered for the production of a machine part. Process 1 requires an equipment cost of P180 000.00, a yearly operating cost of P90 000.00, and has zero salvage value at the end of its 6-year life. Process 2 has corresponding figures of P320 000.00, P72 000.00, P45 000.00 and 9-year life. If the applied MARR is 20%, compare the two processes using PW analysis. (Ans. PT1= -P693 567.36; PT2= -P718 084.62)
Give typing answer with explanation and conclusion A new production system for a factory is to be purchased and installed for $154982. This system will save approximately 300,000 kWh of electric power each year for a 6-year period. Assume the cost of electricity is $0.10 per kWh, and factory MARR is 15% per year, and the salvage value of the system will be $9668 at year 6. Using the PW method to analyzes if this investment is economically justified A- calculate the PW of the above investment and insert the result below.
A project that cost $72000 has a useful life of 5 years and a salvage value of $3000. The internal rate of return is 12% and the annual rate of return is 18%. The annual net income is
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CLC Publishing is considering the purchase of an offset printing machine. A study of three available alternatives shows the following estimates: A B C Acquisition Cost P700 000.00 P850 000.00 P1 000 000.00 Shipping Cost 5% 5% 8% Net Annual Benefit P155 000.00 P145 000.00 P170 000.00 Useful Life 8 years 16 years 16 years Salvage Value P35 000.00 P70 000.00 P80 000.00 If at the end of eight years alternative A could be replaced with an identical machine having the same cost and benefits, determine the alternative to be selected using present worth analysis and a 14% MARR. (Ans. PTA= -P5005.80; PTB= P24 536.06; PTC= -5108.53; select alternative B)
Please view the following video before answering this question. Video Solution: 11.01-PR007 A pipeline contractor can purchase a needed truck for $44,000. Its estimated life is 6 years, and it has no salvage value. Maintenance is estimated to be $2,100 per year. Operating expense is $60 per day. The contractor can hire a similar unit for $130 per day. MARR is 7%. Click here to access the TVM Factor Table Calculator Part a How many days per year must the truck's services be needed such that the two alternatives are equally costly? days Carry all interim calculations to 5 decimal places and then round your final answer up to the nearest day. The tolerance is 14. Attempts: 0 of 3 used Save for Later Submit Answer
2. Super Apparel wants to replace an old machine with a new one. The new machine would increase annual revenue by $200,000 and annual operating expenses by $80,000. The new machine would cost $400,000. The estimated useful life of the machine is 10 years with zero salvage value. i. Compute Accounting Rate of Return (ARR) of the machine using above information. ii. Should Super Apparel purchase the machine if management wants an Accounting Rate of Return of 19% on all capital investments? Hint: Use Average Income or Profit after deducting tax, depreciation, and operating expenses.
A machine that costs $4510, has a life of 14 years and no scrap value. If money worth 10% then the capitalized cost will be: $3867.15 O $4994.65 O $8377.15 O $6122.15 O $9955.65

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