[BONUS] An equipment has a first cost of 500,000 PHP and the cost of installation is 30,000 PHP. At the end of its economic life of 35,000 operating hours, the salvage value is 10% of the equipment cost. Determine its book value at the end of the third year if its annual usage is 5,400 hours. EOY BV (1]
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- Data for two 50-hp motors are as follows: Alpha motor Beta motor Original cost P37 500 P48 000 Annual maintenance 1500 750 Life, years Efficiency 10 10 87% 92 % Taxes and insurance 3% 3% Power cost is P2 per kWh. If money is worth 20%, how many hours per year would the motors have to be operated at full load for them to be equally economical? If the expected number of hours of operation per year exceeds the break-even point, which motor is more economical?An oil company is planning to install a new 80 mm pipeline to connect storagetanks to a processing plant 1500 m away. The connection will be needed for theforeseeable future. Refer to their costs incurred below:initial cost: RM15,000service life: 12 yearssalvage value: RM200one-off saving in year 8: RM 300annual profit: RM400annual pump operation hours: 450 hourspump cost per hours: RM2.50Calculate the single project evaluation using Benefit Cost Ratio PW analysismethod, which is preferred if the MARR is 7%. Draw the cashflow diagram.It is proposed to place a cable on an existing pole line along the shore of a lake to connect two points on opposite sides. Land Submarine Route Route Length, 10 miles First cost of cable per P45,871 P64,887 mile Annual Maintenance P1,005 P3,994 per mile Interest 18% 18% Net salvage value per P12,924 P22,049 mile Useful Life, 15 15 years What is the savings per year when you picked the more economical compare to the other route. Use EUAC method when comparing. DELL
- You are starting a new project. This project would last 4 years. The following is the input information that you have collected: Building cost (1.3% in the first year and then 2.6% every year) $12,000,000 Equipment cost (MACRS 5 years) $8,000,000 Net operating working capital requirement (% of Sales) 10% First year sales (in units) 20,000 Growth rate in units sold 0% Sales price per unit $3,000 Variable cost per unit $2,100 Fixed costs $8,000,000 Market value of building at the end of year 4 7,500,000 Market value of equipment at the end of year 4 2,000,000 Tax rate 40% WACC 12% Inflation growth in sales price per year 2% Inflation growth in VC per unit per year 2% Inflation growth in fixed costs per year 1% What is the NPV of this project? (In your calculations use zero decimal spaces/round to the whole numbers).A government monument is being built that is expected to last forever. The first cost is $7,000,000. At the end of every 8 years, there will be a major remodeling cost of $300,000. At the end of year 12, there will be a one-time remodeling cost of $450,000. Annual Operating & Maintenance Costs will total $40,000 for each year. i = 6% per year. a) Draw the fully labeled cash flow diagram. b) Calculate the capitalized cost? c) What is the equivalent uniform annual cost?Lim Bon Fing Y Hermanos Inc has offered for sale its two-storey building in thecommercial district of Cebu City. The building contains two stores on the ground floor anda number of offices on the second floor.A prospective buyer estimates that if he buys this property, he will hold it for about 10years. He estimates that the average receipts from the rental during this period to beP350,000.00 and the average expenses for all purpose in connection with its ownershipand operation (maintenance and repairs, janitorial services, insurance, etc.) to beP135,000.00. He believes that the property can be sold for a net of P2,000,000 at the endof the 10th year. If the rate of return on this type of investment is 7%, determine thecash price of this property for the buyer to recover his investment with a 7% return beforeincome taxes.ANSWER: P2,526,768.61
- A company wants to automize its production line. Two main technology shortlisted after several studies on the market. If the MARR is 0.1 and the life spans of technology A and B are 3 and 6 years respectively. Answer the following questions by using PW method. Note: all of the cost and revenue units are in thousand dollars. Costs Technology A Technology B First cost, $ -234 436 Annual Operation Cost, $ -56 42 Maintenance Cost, $ -13 per Year -29.2 each 2 years 50 98 Salvage Value, $ Life, Year 3 a) What is the PW of Technology A?Acadia Construction Company is a new business that is considering its first project. The required equipment investment by the company is $50,000 (CCA class 39) with an expected revenue of $20,000 in year 1, increasing by 5%/year for the 5-year life of the project. Costs in year 1 are expected to be $5000, increasing by 3%/year for the 5-year life of the project. The salvage value of the equipment at the end of the five years is $5000 and the tax rate is 40%. a) What is the NPW of the project and the IRR if the MARR is 15%? b) Because the company is a new company, it may be eligible to enjoy a reduced tax rate over the life of the project. If Acadia Construction Company wants to earn a 15% on their project, what would the reduced tax rate have to be? Show all working, try not to use excelPlease no written by hand solutions When a child is born, the parents receive gifts of $5000 which they invest at 6% interest. Each year they are fortunate to receive $1000(1+f/5) in gifts that they add to the investment. When the child is 18, he is allowed to remove the money from the account. How much is there? f = 3, so $1600 is added to the gift each year.
- A ₱2500 computer system can be leased for ₱79 per month for 3 years. After 3 years, it can be purchased for ₱750. This is also the salvage value if the system was purchased originally. What is the effective annual rate for leasing the computer? Solutions manual with formula we are used. Without using Microsoft Excel.Buying Equipment 1 from XYZ company and company ABC will give the production similar productivity input of 400,000.00 per year. The equipment from company XYZ has a purchase price of 200,000.00, annual maintenance of 5,000.00, and production life of 10 years, while the equipment from company ABC has a purchase price of 100,000.00, annual maintenance of 2,000.00, and production life of 12. Using present worth method, what is the present values of their purchase profit? Use MARR of 20%Buying Equipment 1 from XYZ company and company ABC will give the production similar productivity input of 400,000.00 per year. The equipment from company XYZ has a purchase price of 200,000.00, annual maintenance of 5,000.00, and production life of 10 years, while the equipment from company ABC has a purchase price of 100,000.00, annual maintenance of 2,000.00, and production life of 12. Using present worth method, what is the total present worth of each alternatives? Use MARR of 20%