Ardent Manufacturing purchased a machine for $140,000. It is estimated that the machine has a useful life of 5 years and will be sold for $10,000 at the end of its useful life. Using the straight-line method, the carrying value of the machine at the end of the fourth year of the machine's useful life is
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- A set of Wire Bond machine costs $500,000. This amount includes freight and installation charges estimated at 10% of the original price. If the machine shall be depreciated over a period of 10 years with a salvage value of $5,000, what is the book value at the end of 7 years using SOYDM?K Company has purchased a new machine costing $27,000 and the machine is expected to reduce the operating expenses by $7,000 every year. The useful life of machine is 5 years and the machine is expected to have a zero-scrap! value at the end of its useful life. The company's required rate of return is 12%. Calculate the Net Present Value (NPV) of the machine. (Round intermediate calculations to 3 decimal places and final answer to the nearest dollar.)Xavier Co. wants to purchase a machine for $37,400 with a four-year life and a $1,100 salvage value. Xavier requires an 8% return on investment. The expected year-end net cash flows are $12,400 in each of the four years. What is the machine's net present value? Periods Present Valueof $1 at 8% Present Value of anAnnuity of $1 at 8% 1 0.9259 0.9259 2 0.8573 1.7833 3 0.7938 2.5771 4 0.7350 3.3121
- An injection molding system has a first cost of $175,000 and an annual operating cost of $95,000 inyears 1 and 2, increasing by $6,000 per year thereafter.The salvage value of the system is 25% ofthe first cost regardless of when the system is retired within its maximum useful life of 5 years.Using a MARR of11% per year, determine the ESL and the respective AW value of the system.Wildhorse Manufacturing purchases equipment with an expected life of 10 years for $49500. The equipment has an estimated salvage value of $2000. Wildhorse expects the new equipment to generate annual cost savings of $8000. What is the payback period of the equipment? O 5.94 years O 6.19 years O 6.44 years O 10.00 yearsCalculate the present worth of all costs for a newly acquired machine with an initial cost of $29,000, no trade-in value, a life of 10 years, and an annual operating cost of $13,000 for the first 4 years, increasing by 10% per year thereafter. Use an interest rate of 10% per year.
- A firm can purchase a centrifugal separator (5-year MACRS property) for$17,000.The estimated salvage value is$3,000after a useful life of six years. Operating and maintenance (O&M) costs for the first year are expected to be$1,700.These O&M costs are projected to increase by$1,500per year each year thereafter. The income tax rate is23%and the MARR is12% after taxes. What must the uniform annual benefits be for the purchase of the centrifugal separator to be economical on an after-tax basis?The initial cost of a new machine is $10,000. The annual operating cost is $1,000/yr for first 3 years, and then becomes $3,000/yr after that. The machine needs a major repair at the end of 5th year, which costs $5,000. The machine has 10 years useful life with salvage value of $4,000. Calculate EUAC for keeping the machine for 10 years. (i=10%/yr)The data associated with operating and maintaining an asset are shown below. The company manager has already decided to keep the machine for 1 more year (i.e., until the end of year 1), but you have been asked to determine the cost of keeping it 1 more year after that. At an interest rate of 10% per year, estimate the AW of keeping the machine from year 1 to year 2. Operating Cost, $ per Year Market Value, $ 30,000 25,000 14,000 10,000 Year 0 1 2 3 -15,000 -15,000 -15,000
- 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%?The price of a system of jockey pumps is P5,500,000. PLM decided to purchase this system and spent P215,500 for shipping and installation. The equipment will last for 10 years with a salvage value of 3% of its total cost. Determine the following: a. Yearly charge of depreciation using SL method. b. Depreciation charge on the 6 th year, and book value at the end of 8th year using SYD method.Coast-to-Coast Inc. is considering the purchase of an additional delivery vehicle for $70,000 onJanuary 1, 20Y1. The truck is expected to have a five-year life with an expected residual valueof $15,000 at the end of five years. The expected additional revenues from the added deliverycapacity are anticipated to be $65,000 per year for each of the next five years. A driver will cost$40,000 in 20Y1, with an expected annual salary increase of $2,000 for each year thereafter. The annual operating costs for the truck are estimated to be $6,000 per year.a. Determine the expected annual net cash flows from the delivery truck investment for 20Y1–20Y5.b. Compute the net present value of the investment, assuming that the minimum desired rate of returnis 12%. Use the present value table appearing in Exhibit 2 of this chapter.c. Is the additional truck a good investment based on your analysis? Explain.