A machine shop purchased 10 years ago a milling machine for P65,000. A straight-line depreciation reserve had been provided on a 21-year life of the machine. The owner of the machine shop desires to replace the old milling machine with a modern unit of many advantages costing P110,000. It can sell the old unit for P25,000. How much new capital will be required for the purchase? a.Php64,047.619 b.Php80,047.619 c.Php75,047.619 d.Php90,047.619

Q: A mining project requires the purchase of new drilling equipment at a cost of $69750.  A further…

A: The objective of the question is to calculate the value of the equipment for depreciation purposes.…

Q: The Brendan Excavation Company replaced an old machine 11 years ago with a new one. They sold the…

A: Annual depreciation tax shield Annual depreciation tax shield is the annual depreciation times the…

Q: Your company has spent $380,000 on research to develop a new computer game. The firm is planning to…

A: Amount to be depreciated= 58000+6800= 64800$Depreciation for first year= 64800*10%= 6480

Q: A machine is purchased and depreciated over four years. The tax rate is 21% and the project's cost…

A: Working Note#1Computation of depreciation:Depreciation=Depreciation=Depreciation=$ 172,500Working…

Q: A business firm is contemplating to purchase new equipment. The purchase price is 60,000 and its…

A: The question pertains to the concept of capital budgeting tools and time value of money and has been…

Q: DC Company is considering the purchase of a new machine. The price of the new machine is $122,000,…

A: Cost of capital is 15% To Find: Net present Value

Q: Patterson Corporation is considering the purchase of a new piece of equipment, which would have an…

A: Payback period is concept of capital budgeting. Payback period is the period in which initial…

Q: A company is considering a machine acquisition. The new machine will cost $ 60.000 and the shipping…

A: Investment Cash flow:- It includes inflow and outflow of cash from the sale and purchase of…

Q: for this equipment. 6. Calculating Salvage Value Consider an asset that costs $635,000 and is…

A: Cost of assets = $635,000 Life = 8 Years Annual depreciation = 635000/8 = $79375 Life used = 5 Years…

Q: A corporation purchased a machine for $60,000 four years ago. It had an estimated life of 10 years…

A: Business organizations are required to charge depreciation expenses on their assets. The book value…

Q: t line) down to $0 over its five-year life. At the end of five years, it is believed that the…

A: The initial investment is amount of money required to begin the project and it consist of money…

Q: Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to…

A: Introduction:   Accounting rate of return-Accounting rate of return is the ratio of the average…

Q: apital Investments Project DC Company is considering the purchase of a new machine. The price of…

A: Cost of capital is 15% To Find: Net present Value

Q: An asset cost $200,000.  It has a salvage value of $40,000.  It has a 10 year life.  What would be…

A: Annual Depreciation under Straight-Line Method = (Cost - Salvage Value) / Useful Life

Q: 3. Ten years ago, a tiny steam plant of 2000 KW capacity costing P225 per Kw was erected. The life…

A: Depreciation: Over the useful life of the asset the book value o the asset is reduced, for…

Q: INFORMATION: Goldfields Limited intends purchasing a new machine to replace an existing machine. The…

A: Initial Investment is that amount which is required at the time initial stage of project. It…

Q: A cutting edge metallic 3D printer is purchased by Helix Corp for $160000. It is expected to last 9…

A: The following information has been provided in the question: Cost of metallic  printer =$160000 Life…

Q: A machine was purchased with an amount of P375,000.00 and a modification cost of P100,000.00 after…

A: Capitalization costs include: Installation costs Labor charges Transportation costs Interest…

Q: Vandezande Incorporated is considering the acquisition of a new machine that costs $470,000 and has…

A: Given: Year Net cash flows 0 -$470,000 1 $156,000 2 $163,000 3 $175,000 4 $160,000 5…

Q: Your company has spent $240,000 on research to develop a new computer game. The firm is planning to…

A: Net Cash flow is the amount which is earned by the investor from the project. It is the net amount…

Q: Capital Investments Project DC Company is considering the purchase of a new machine. The price of…

A: Incremental Cash flow of new machine is determined. It is the increase in cash flow if new machine…

Q: One year ago, your company purchased a machine used in manufacturing for $110,000. You have learne…

A: If a firm needs to decide whether a machine should be replaced or not, it is known as replacement…

Q: Homer Corp. is considering the purchase of a new piece of equipment. The cost savings from the…

A: Income after tax = $ 169650 Initial cost = $ 585000 Life = 5 Years Salvage value = $ 25000 Annual…

Q: KADS, Incorporated, has spent $400,000 on research to develop a new computer game. The firm is…

A: Cash Flow from the project is that amount which is earned by the investor from the project. It…

Q: The Bruin's Den Outdoor Gear is considering a new 7-year project to produce a new tent line. The…

A: Project life = 7 yearsCost of equipment = $1.95 millionUnits = 30,500 tentsPrice = $78Variable costs…

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.