An engineering firm purchased 12 years ago a heavy planner for P 50,000. As the life of the planner was 20 years, a straight line depreciation reserve has been provided on that basis. Now the firm wishes to replace the old planner with a newly-designed planner possessing several advantages. It can sell the old planner for P 10,000. The new machine will cost P 70,000. How much new capital will be required to make the purchase? 30,000.00 40,000.00 2,500.00 4,166.67 50,000.00 12,500.00
An engineering firm purchased 12 years ago a heavy planner for P 50,000. As the life of the planner was 20 years, a straight line depreciation reserve has been provided on that basis. Now the firm wishes to replace the old planner with a newly-designed planner possessing several advantages. It can sell the old planner for P 10,000. The new machine will cost P 70,000. How much new capital will be required to make the purchase? 30,000.00 40,000.00 2,500.00 4,166.67 50,000.00 12,500.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An engineering firm purchased 12 years ago a heavy planner for P 50,000. As the life of the planner was 20 years, a straight line depreciation reserve has been provided on that basis. Now the firm wishes to replace the old planner with a newly-designed planner possessing several advantages. It can sell the old planner for P 10,000. The new machine will cost P 70,000. How much new capital will be required to make the purchase?
30,000.00
40,000.00
2,500.00
4,166.67
50,000.00
12,500.00
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