A new engine will cost P12,000 with an estimated life of 15 years and a salvage value of P800 and guaranteed to have an operating cost of P3500 per year. The new engine is considered as a replacement of the old one. The old engine had a total annual cost of P5,200 to operate. Determine the rate of return of the new investment using 6% sinking fund to recover depreciation, if the old engine could be sold now for P2000.

Q: Please determine the present value of the total cost of the project for a given cash flow indicated…

A: The present value can be calculated by using this equation Present value =CF1-1(1+r)nr Where CF…

Q: Concord is contemplating a capital project costing $32838. The project will provide annual cost…

A: Net present value is the difference between the present value of the initial cash outflow and the…

Q: maintenance costs of this equipment are estimated to be about $25,000 per year. Salvage value is…

A: EUAC is uniform annual equivalent cost that is equivalent to all costs of equipment.

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A: Depreciation is decrease in the value of fixed asset due to wear and tear, and passage of time.

Q: The boiler in a steam power plant costs P 25,000,000 and has a salvage value of P 850,000 at the end…

A: Depreciation ExpensesDepreciation expense is the methodical distribution of a long-term asset's cost…

Q: XYZ Co is looking at four different opportunities. Each opportunity requires the same initial…

A: Capital budgeting The process that involves decision-making related to investment which involves…

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

A: Cash Flow = cf = $210,000Initial Cost = i = $890,000Time = t = 6 YearsCost of Capital = r = 9%

Q: A machine has a first cost of P50,000 with interest rate of 10% annually. Expected salvage value…

A: Depreciation is the total loss in value of an asset over the life of the asset. The value of asset…

Q: Engr. Collado is using a 10% annual interest rate to decide if it should by cement mixer A with…

A: We need tp compute Net present value of both the options. Net present value is excess of present…

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A: in this problem we have to calculate present value of benefits and salvage value and calculate…

Q: A new machine requires an investment of $630,000 and will generate $100,000 in cash inflows for 7…

A: The Net Present value iscalculated with the help of following formula Net Present Value = Present…

Q: Ltd is considering investing in the purchase of new equipment The equipment will cost $350 000…

A: The accounting rate of return, often known as the average rate of return, or ARR, is a financial…

Q: A machine has a first cost of P60,000 with interest rate of 12% annually. Expected salvage value…

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Q: With the estimates shown below, Sarah needs to determine the trade-in (replacement) value of machine…

A: The objective of the question is to find the market value of Machine X such that its Annual Worth…

Q: at the end of the 5th year, there is a salv ows are estimated as follows: D00 TL, 2. year. 500 000…

A: Given information : Year Cash flows 0 1200000 1 350000 2 500000 3 700000 4 850000 5…

Q: Investment Required Php 50,000,000 Salvage Value after 10 Years Gross Income Annual Operating Costs:…

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Q: Grady Corp. is considering the purchase of a new piece of equipment. The equipment costs $50,700,…

A: Solution a: Present value of increase in annual cash flows = $6,110 * PVA of 1 at 13% for 6 periods…

Q: What is the present worth of all the damages for 15 years?

A: Present Worth: It is the current worth of future annual cash flows streams or future sum of money.…

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A: Present Worth: It is the present value of the annual cash flows and the cost of the project…

Q: SM wants to buy new equipment that has costs 200,000 pesos. This new equipment will give them 90,000…

A: Cost of new Equipment is 200,000pesos Revenue from new equipmrnt is 90,000pesos Operating Cost per…

Q: Please determine the present value of the project for a given cash flow indicated below using the…

A: Present value of the project is the present worth of future cashflows

Q: A buffing machine is costs P10,000. Its estimated scrap value is P1,000 after 10 years. Solve for…

A:

Q: he required investment cost of a new, large shopping center is $52 million. The salvage value of the…

A: Given,  Investment=$52million  Salvage value=$18million   Project life=18 years   Annual operating…

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A: Solution Given Buying price 100000 Annual cost of maintenance 30000 Number of years…

Q: Economics Margaret has a project with a £ 24,000 first cost that returns £ 4,900 per year over its…

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Q: Palmer Corporation is considering the purchase of a new plece of equipment. The cost savings from…

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

A: Net Present Value: Net present value (NPV) is the excess of present value of cash inflows over the…

Q: An equipment cost P60,000 today and its salvage value is P20,000 after 6 years. Calculate its…

A:

Q: ATVIS costs P90,000. Its estimated scrap value is P10,000 after 5 years. Solve for the constant…

A: The sinking fund method is a way to depreciate an asset while still making enough money to replace…

Q: . What is the internal rate of return for this investment?

A: Internal rate of return: it is that percentage of compound annual return that an investor or company…

Q: With the estimates shown below, Sarah needs to determine the trade-in (replacement) value of machine…

A: Equivalent annual cost:Equivalent annual cost (EAC) is a financial metric used to compare the cost…

Q: A piece of equipment has a first cost of $75000, a maximum useful life of 4 years, and a market…

A: Please see the next step for the solution

Q: is replaced, it has no salvage value. Compute the present equivalent cost of the equipment using 10%…

A: Present Value: It is the present worth of the cash flows discounted at a specific interest rate.…

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.