A CNC machine costs $220,000. A facility purchases one and plans to use it for 12 years, at which point it will have a salvage value of $34,000. What are the depreciation allowance and book value after 7 years of use using declining balance depreciation? Depreciation allowance: Book value: Carry all interim calculations to 5 decimal places and then round your final answers to a whole number. The tolerance is 170.

A CNC machine costs $220,000. A facility purchases one and plans to use it for 12 years, at which point it will have a salvage value of $34,000. What are the depreciation allowance and book value after 7 years of use using declining balance depreciation? Depreciation allowance: Book value: Carry all interim calculations to 5 decimal places and then round your final answers to a whole number. The tolerance is 170.

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

An electric power generating project has a first cost of $447,946 and annual operating costs of $30,000. There is a $180,000 overhaul cost in Year 8. The facility will have a salvage value of $75,000 at the end of Year 15. What is the minimum annual revenue for a breakeven PW at i=10%? Answer to the nearest whole dollar, and enter only the number. PLEASE USE EXCEL AND SHOW FORMULAS
A construction company is evaluating two options for an elevator, each of which has a useful life in 10 years. Option 1 costs $45, 000 to install and $2700 annually, with a salvage value of $ 3000 in year 10. Option 1 also requires a significant overhaul in year 6 with a cost of $8, 000. Option 2 costs $54, 000, costs $2, 800 annually, and has a salvage value of $5000 in year 10. Annual interest is 4%, compounded monthly. Which option would you choose? Show your work.
A Funiture Factory is considering buying a new automated planing machine for a cost of $80,250. This price includes a complete guarantee of the maintenance costs for the first two years, and it covers a good proportion of the maintenance costs for years 3 and 4. The company’s portion of the maintenance cost is estimated to be $1,000 in year 3 and $3,000 in year 4. Depreciation on the capital cost would be 7% per year. Determine the Economic Life and EAC* of the new machine assuming the MARR is 6.5% and that there will be an installation cost of $2,800. PLEASE PLEASE SHOW FULL DETAILED STEPS
Purple Haze Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $526,528 is estimated to result in some amount of annual pretax cost savings. The press will have an aftertax salvage value at the end of the project of $86,879. The OCFS of the project during the 4 years are $170,654, $199,481, $175,232 and $169,873, respectively. The press also requires an initial investment in spare parts inventory of $23, 482, along with an additional $1,631 in inventory for each succeeding year of the project. The shop's discount rate is 6 percent. What is the NPV for this project?
The table given below lists the relevant cost items for a specific system purchase. The operating expenses for the new system are $10,000 per year, and the useful life of the system is expected to be five years. The salvage value for depreciation purposes is equal to 25% of the hardware cost. Cost Item Cost Hardware $160,000 Training $15,000 Installation $15,000 a) What is the Book Value (BV) of the device at the end of year three if the Straight Line (SL) depreciation method is used? b) Suppose that after depreciating the device for two years with the SL method, the firm decides to switch to the double declining balance depreciation method for the remainder of the device's life (the remaining three years). What is the device's BV at the end of four years?
Your firm requires an average accounting return (AAR) of at least 15 percent on all fixed asset purchases. Currently, you are considering some new equipment costing $96,000. This equipment will have a 3-year life over which time it will be depreciated on a straight line basis to a zero book value. The annual net income from this project is estimated at $5,500, $12,400, and $17,600 for the 3 years. Should you accept this project based on the accounting rate of return? Why or why not? a. no; because the AAR is equal to 15 percent b. yes; because the AAR is less than 15 percent c. yes; because the AAR is greater than 15 percent d. yes; because the AAR Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
As a financial analyst, you must evaluate a proposed project to produce printer cartridges. The purchase price of the equipment, including installation, is $65,000, and the equipment will be fully depreciated at t = 0. Annual sales would be 4,000 units at a price of $50 per cartridge, and the project’s life would be 3 years. Current assets would increase by $5,000 and payables by $3,000. At the end of 3 years, the equipment could be sold for $10,000. Variable costs would be 70% of sales revenues, fixed costs would be $30,000 per year, the marginal tax rate is 25%, and the corporate WACC is 11%. The firm’s project CVs generally range from 1.0 to 1.5. A 3% risk premium is added to the WACC if the initial CV exceeds 1.5, and the WACC is reduced by 0.5% if the CV is 0.75 or less. Then a revised NPV is calculated. What are the revised values for the NPV? NPV Best Case Scenario = $ . NPV Base Case Scenario = $ . NPV Worst-case Scenario = -$ . Expected NPV = $
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
An asphalt road requires no repairs until the end of 2 years. At the end of 3rd year, P90,000 will be needed for repairs for the next 5 years, then P120, 000 at the end of each year for the next 5 years. If moneyis worth 14% compounded annually, what is the present value of the repair cost and its equivalent uniform annual cost for the 12-year period?
You invested on a special pizza oven for $150,000. This commercial oven is depreciated over a 7-year period, and it is expected to have a $20,000 estimated market value at the end of the 7 years. Using the straight-line method, what is the book value in year 5? a) Between $31,900 and $32,300 b) Between $45,500 and $45,900 O c) Between $33,000 and $33,400 d) None of the answers are correct e) Between $58,300 and $58,700 f) Between $56,900 and $57,300
Russell Industries is considering replacing a fully depreciated machine that has a remaining useful life of 10 years with a newer, more sophisticated machine. The new machine will cost $194,000 and will require $29,400 in installation costs. It will be depreciated under MACRS using a 5-year recovery period Percentage by recovery year* Recovery year 3 years 5 years 7 years 10 years 1 33% 20% 14% 10% 2 45% 32% 25% 18% 3 15% 19% 18% 14% 4 7% 12% 12% 12% 5 12% 9% 9% 6 5% 9% 8% 7 9% 7% 8 4% 6% 9 6% 10 6% 11 4% Totals 100% 100% 100% 100% A $30,000 increase in net working capital will be required to support the new machine. The firm's managers plan to evaluate the potential replacement over a…
Penny and Daughter’s construction business is considering purchasing a new Bobcat. The equipment will cost $230,000 and is expected to last 14 years. The Bobcat has a salvage vale of $16,000. Calculate the depreciation AND book value for each year. You can create one table for a-d or you can create different tables for each. This problem will need to be done in excel. (30 points)a. Use straight-line depreciation. (5 points)b. Use declining-balance depreciation with a depreciation rate that ensures the book value equals the salvage vale in the last year of the life of the equipment. c. Use double declining balance depreciation. d. Use MACRS depreciation where the Bobcat is considered a 10 year property. e. Graph the Book values of each methods on a single graph. The graph should have points at each year for each BV and a line of each method. You will have 4 lines on your graph. You should include year 0 on your graph so that all four lines start at the same point. Each method should be…