A concrete pavement on a street would cost P10,000 and would last for 5 years with negligible repairs. At the end of each years. P1,000 would be spent to remove the old surface before P10,000 is spent again to lay a new surface. Find the annual cost of the pavement at 5%

Q: A new drill press costs $12,000. It would potentially produce an additional $4,000 of revenue per…

A: Costs = $12,000 Revenue = $4,000 Operating Expenses = $1,200 Time period = 8 years  Rate = 10%

Q: The initial cost needed to set up your freelancing engineering design service is $50,000. The…

A: Break-even is the point at that point company earns neither profit nor incurs loss. Now, break-even…

Q: A customer is going to buy a brand new pump and motor. It has an initial cost of $10,000. The…

A: To break even, present value of inflows shall be equal to the initial cost of the project.

Q: It costs P50,000 at the end of each year to maintain a section of Kennon road in Baguio City. If mor…

A: Value of money changes with time and amount invested and money can be earned elsewhere by investing…

Q: A project has a $53000 first cost that returns $5000 per year over its 15 year life. It has a $12000…

A: The payback period, a monetary metric, estimates how long it will take an investment to recover its…

Q: The following are the costs for one of the alternatives to construct a new bridge: Construction cost…

A: We are given the costs of an alternative to construct a new bridge.  The initial construction cost…

Q: A new water treatment plant proposed for Anytown, has an initial cost of P56 million. The new plant…

A: In this question we need to compute the benefit/cost ratio.

Q: An untreated electric wooden pole that will last 15 years under a certain soil condition costs…

A: Time value of money concept is used to evaluate projects in the form of various types of investment.…

Q: A factory company has 5 years to prepare for relocating in another place. The equipment for loading…

A: Capital rate per year can be defined as the amount to be capitalized on annual basis. It is…

Q: The initial cost of a van is $22,800; its salvage value after 5 years will be $8500. Maintenance is…

A: The equivalent uniform annual cost(EUAC) is the annual cost of maintaining and operating assets…

Q: An adoption of a new system will lead to a reduction of the cost by as much as 18%. The cost of the…

A: The rate of return will be the IRR of this capital budgeting project. As the tax rate is not given…

Q: Moving to a new facility will save $400,000 annually for 20 years. The cost of building the facility…

A: IRR is a tool for making investment decisions. It measures whether an investment is profitable or…

Q: A new gizmo costs $9050. Maintenance costs $6907 per year and labour savings are $1900 per year.…

A: The payback period is a financial metric that is commonly used to determine how long it will take…

Q: A new gizmo costs $10 000. Maintenance costs $2000 per year and labour savings are $6567 per year.…

A: The payback period refers to the period that is required to recover the initial cost. With the help…

Q: A 1000ft (one lane) asphalt road costs P3.8M. It requires no upkeep until the end of 3 years when…

A: Time Period 20 Initial Cost P 38,00,000.00 Repair Cost at the end of 3rd year      P 80,000.00…

Q: Automating a process will cost $8000 now, but it will save $2200 annually for 5 years. The machinery…

A: Net present value method (NPV): Net present value method is the method which is used to compare the…

Q: It will cost $4,500 to acquire a small ice cream cart. Cart sales are expected to be $3,700 a year…

A: Payback period is the period required to recover initial investment of the project.The payback…

Q: An aggregate crasher is expected to cost P60, 000 and has an estimatedlife of 5 years. Maintenance…

A: Here we will use the concept of time value of money. As per the concept of time value of money the…

Q: The purchasing price of the second-hand bulldozer is $100,000. It will have 8 years service life…

A: The present value of all costs is divided by the present value annuity factor.

Q: A project has cost $50,000. The project is scheduled to complete three months from now and is…

A: Sunk cost is a cost which has already being incurred and cannot be recovered. For a continuing…

Q: A proposed 10-mile, 4-lane road widening project is worth 3.6 million. The existing daily traffic is…

A: In a typical capital budgeting project, there are drivers of benefits as well costs. We have to find…

Q: An energy conservation option with a first cost of $10,000 is installed. It requires $600 per year…

A: Life cycle costing is the calculation of the total amount which an entity will spend throughout the…

Q: A new machine costs $10 000. Maintenance costs $2000 per year and labour savings are $6567 per year.…

A: The payback period alludes to what extent it takes for a speculator to hit breakeven to recoup the…

Q: A machine costs Php 30,000 to purchase. The machine will have a Maintenance cost of Php 2,000 but…

A: Initial cost = Php 30000 Annual profit (CF)= Php 10000 - Php 2000 = Php 8000 Salvage value = Php…

Q: A new punching machine will cost $4,593. At the end of its 10 years useful life, the machine can be…

A: NPV is also known as Net present value. It is a capital budgeting techniques which help in decision…

Q: he average annual cost of damages caused by floods to certain subdivision located along Pasig River…

A: Annuity: this is used in case of a future annuity – suppose an equal sum of money is invested in the…

Q: A solar lighting system is to be purchased and installed for 310,000. This system will save…

A: PW is one of the methods of evaluating the profitability of the project. It considered the PV of…

Q: The initial cost of a new machine is $10,000. The annual operating cost is $1,000/yr for first 3…

A: Equivalent uniform annual cost EUAC distributes the total cost of the project in term of annual cost…

Q: Consider a machine that costs $1000 to purchase. The machine creates an annual operating expense of…

A: Correct answer is option (d) 9 years.

Q: A new airconditioning unit costs P150,000 and will have a salvage value of P15,000 after 5 years.…

A: First cost (F) = P 150000 Let A = Annual saving Salvage value (S) = P 15000 n = 5 years r = 15%

Q: $8000 will cost now for installing a printing machine, but it will save $2200/year for 5 years. The…

A: The concept of money's time worth indicates that any sum of money today is more as compared to its…

Q: Considering an interest rate of 8%, that the cost of the equipment is $300,000 and you will replace…

A: Where the actual cost of equipment is dividing over the life of equipment is called annual cost.…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.