A machine costs $200,000, has a salvage value of $20,000, and is expected to produce 400,000 units over its life. If it produces 25,000 units in Year 1, what is the depreciation expense for Year 1?
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- Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000 hours, the company expects to sell the asset for 150,000. What is the depreciation rate per hour based on activity?A machine costs $210,000, has a $14,000 salvage value, is expected to last ten years, and will generate an after-tax income of $43,000 per year after straight-line depreciation. Compute the payback period.A company will invest in a machine worth 50000$ to produce a new product. The economic life of the machine is 4 years and its scrap value is 1000$. It will be produced on this machine The annual sales revenue of the product is expected to be 25000 $. Annual operation of the machine Expenditure is expected to be 10000 $. A) The amount of depreciation that will be allocated each year for the equipment to be purchased is Find it with the proportional depreciation method. B) The income tax is 40% and the investment will be made with the company’s equity. Assuming, find the net cash flows that will be generated by purchasing the machine.
- What will be the assets annual depreciation?A $25,000 machine that has been used for one year has a salvage value of $16,000 now, which will drop by $4000 per year. The maintenance costs for the next 4 years are $1250, $1450, $1750, and $2250. When the machine is sold, it will cost $2000 to remove and sell. When the machine was purchased, the estimated salvage value in 5 years was $3500. What are the relevant costs for the machine?Y Company is considering purchasing a machine for $15,000. The machine will generate a net after-tax income of $1,000 per year. Depreciation expense will be $1,500. What is the payback period for the new machine? O 10 years O More than 15 years O 4 years O 15 years O 6 years
- A machine has a first cost of $126,000, an annual operation and maintenance cost of $1850, a life of 8 years, and a salvage value of $27,000. At the end of Years 3 and 6, it requires a major service, which costs $14,000 and $16,500, respectively. What is the equivalent uniform annual cost of owning and operating this particular machine if interest is 6%?A metal fabrication company is buying a CNC machine for $600,000. After 20 years of use, the machine should have a salvage value of $35,000. (a) Under 100% bonus depreciation, what depreciation can be claimed in year 1? (b) Under 100% bonus depreciation, what depreciation can be claimed in year 2?The management of Jasper Equipment Company is planning to purchase a new milling machine that will cost $160,000 installed. The old milling machine has been fully depreciated but can be sold for $15,000. The new machine will be depreciated on a straight-line basis over its 10-year economic life to an estimated salvage value of $10,000. If this milling machine will save Jasper $20,000 a year in production expenses, what are the annual net cash flows associated with the purchase of this machine? Assume a marginal tax rate of 40 percent. a. $15,000 b. $27,000 c. $21,000 d. $18,000
- A machine costs P1,500,000. It has a salvage value of P600,000 at the end of its economic life. Using the SYD method, the book value at the end of 2 years is estimated to be P870,000. What is the machine's economic life in years?A machine costs $700,000 and is expected to yield an after-tax net income of $30,000 each year. Management predicts this machine has a 12-year service life and a $140,000 salvage value, and it uses straight-line depreciation. Compute this machine’s accounting rate of return.Machine A costs $1,520,000 to buy and install and costs $48,000 per year to operate. The machine has a five-year useful life and zero salvage value. The required return is 15.5%. What is the equivalent annual cost of Machine A? (Answer: $506,819)
