If you give me wrong answer I will give you unhelpful rate A machine, which costs $100,000 when new, has a 15-year lifetime and a salvage value equal to 20% of itsoriginal value. Determine the capital recovery costs,based on an interest rate of 10% per year,compounded annually.a. $13,777b. $21,111c. $12,833d. $12,518

Step 1: Define Capital RecoveryCapital recovery is the difference between an asset's acquisition…

Answered: A machine, which costs $100,000 when…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 2P

See similar textbooks

Similar questions

A machine has a first cost of P800,000 and a salvage value of P50,000 at the end of its life after 10 years. The annual saving for the use of the machine amount s to P124,900.97. If the annual maintenance of the machine is P4000 and the sinking fund to recover depreciation earns 6%, compute for the rate of return of investment. Answer: 8%
Consider the following operating and maintenance costs of a new machine whose first cost is $ 86,000 with a useful life of 6 years and its salvage value is $ 14,000 whatever its age is. The interest rate is 6%, compounded annually. Find its economic life. Year 1 2 3 4 5 6 O&M Costs, $ 5,000 7,000 9,000 11,000 13,000 15,000
A machine has a first cost of P50,000 with interest rate of 10% annually. Expected salvage value after 10 years is P5,000. Find the total depreciation after 9 years using sinking fund method. |
An asset which has a first cost of RM 40,000 is expected to have an annual operating cost of RM 15,000 per year. It will provide the needed service for a maximum of 6 years. If the salvage value changes as shown below , determine the economic life of the asset at 20 % per year.
4. Determine the capitalized cost of a research laboratory that requires P5M for original construction; P100,000 at the end of every year for the first 6 years and then P120,000 each year thereafter for operating expenses, and P500,000 every 5 years for replacement of equipment with interest at 12% per annum? 5. A machine cost P8000 and an estimated life of 10 years with a salvage value of P500. What is its book value and total depreciation after 8 years using the straight line method? i 6. An engineer bought an equipment for P500,000. He spent an additional amount of P30000 for installation and other expenses. The salvage value is 10% of the first cost. If the book value at the end of 5 years will be P291,500 using the straight line method of depreciation, compute the useful life of the equipment in years.
Please answer if you conform and give correct answer.
Consider the financial data for a project given in the table below. Initial investment Project life Salvage value Annual revenue $70,000 6 years $10,000 $26,000 Annual expenses $7,000 (a) What is i for this project? 18.1 % (Round to one decimal place.) (b) If the annual expense increases at a 7% rate over the previous year's expenses, but the annual income is unchanged, what is the new / - 16 % (Round to one decimal place.) (c) In part (b), at what annual rate will the annual income have to increase to maintain the same i obtained in part (a)? The annual income has to increase at% per year (Round to one decimal place.)
Compute the present equivalent cost of a machine tool that costs $10,000 initially plus $500 for maintenance every year. The estimated life of the tool is twenty years and its estimated salvage value at that time is $3000. Interest rate is 12%. A) $13,400 B) $13,700 C) $15,000 D) $17,000
Solve using SYD Method. An engineer bought an equipment for P500,000. Other expenses including installations amounted to P30,000. At the end of its estimated useful life of 10 years. The salvage value will be 10% of the first cost. Using a.) Straight Line Method and b) Sinking Fund Formula if the interest rate is 12% per annum to calculate for the book value after 5 years.
A machine has a first cost of P60,000 with interest rate of 12% annually. Expected salvage value after 8 years is P4,000. Find the book value after 4 years using sinking fund method.
Crane’s Custom Construction Company is considering three new projects, each requiring an equipment investment of $22,220. Each project will last for 3 years and produce the following net annual cash flows. Year AA BB CC 1 $7,070 $10,100 $13,130 2 9,090 10,100 12,120 3 12,120 10,100 11,110 Total $28,280 $30,300 $36,360 The equipment’s salvage value is zero, and Crane uses straight-line depreciation. Crane will not accept any project with a cash payback period over 2 years. Crane’s required rate of return is 12%. (a)Compute each project’s payback period. (Round answers to 2 decimal places, e.g. 15.25.) AA years BB years CC years (b)Compute the net present value of each project. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round final answers to the nearest whole dollar, e.g. 5,275. For calculation purposes, use 5 decimal places as…
a. A new operating system for an existing machine is expected to cost $837,000 and have a useful life of six years. The system yields an incremental after-tax income of $245,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $105,000. b. A machine costs $570,000, has a $58,000 salvage value, is expected to last eight years, and will generate an after-tax income of $155,000 per year after straight-line depreciation. Assume the company requires a 10% rate of return on its investments. Compute the net present value of each potential investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Complete this question by entering your answers in the tabs below. Required A Required B A new operating system for an existing machine is expected to cost $837,000 and have a useful life of six years. The system yields an incremental after-tax income of $245,000 each year after deducting its…

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SEE MORE TEXTBOOKS

A machine, which costs $100,000 when new, has a 15- year lifetime and a salvage value equal to 20% of its original value. Determine the capital recovery costs, based on an interest rate of 10% per year, compounded annually. a. $13,777 b. $21,111 c. $12,833 d. $12,518