certain machine the following were spent for its During the first 10 years of the life of maintenance: During the first 5 years, P 2,000 was spent each year; during the second 5 years, P 3,000 each year was spent. In addition, P5,000 was spent for overhauling at the end of the fourth year and P. 0,000 also for overhauling at the end of the ninth year. If money is worth 7% compounded annually, what is the equivalent uniform annual cost for the 10-year period?

certain machine the following were spent for its During the first 10 years of the life of maintenance: During the first 5 years, P 2,000 was spent each year; during the second 5 years, P 3,000 each year was spent. In addition, P5,000 was spent for overhauling at the end of the fourth year and P. 0,000 also for overhauling at the end of the ninth year. If money is worth 7% compounded annually, what is the equivalent uniform annual cost for the 10-year period?

Name: During the first 10 years of the life of a certain machine the follow
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: During the first 10 years of the life of a certain machine the following were spent for itsmaintenance: During the first 5 years, P 2,000 was spent each year; during the second 5years, P 3,000 each year was spent. In addition, P5,000 was spent for o

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: An instrument requires recalibration once every five years at a his expense, assuming i = 5%.

A: Capitalized cost is the present value of the future cost that are going to occur based on the time…

Q: A property was purchased for $6568.00 down and payments of $1297.00 at the end of every year for 6…

A: We will use the concept of time value of money. The interest rate is compounded monthly and hence we…

Q: parcel of land can be leased for a period of 10 years. Initial development costs for clearing,…

A: The question is based on the concept of Present value and Annuity in Financial Management.

Q: A lathe machine cost P300,000 with a salvage value of P15,000 is expected to last for 285000 hours…

A: The depreciation expense is charged on fixed assets as reduction in the value with the usage and…

Q: An asset has a first cost of $12,000, an annual operating cost of $3500 and a salvage value of $5000…

A: Given information: Initial cost=$12,000 Annual cost=$3500 Salvage value=$5000 Life=7 years Interest…

Q: A project has a first cost of S120,000 and an estimated salvage value of $20,000 at the end of 25…

A: Year Cash Flow Reference 0 -120,000 First Cost 1 -41580 Annual Receipts - Annual Disbursement -…

Q: For a project lasting for 7 years, there are two expenses: the first one which is paid at the end of…

A: The question is to calculate present value of expected cash flows in form of annuity with growth…

Q: A contractor purchased a Caterpillar D-13 dozer for $100,000 and owned it for five years. The annual…

A: Uniform Annual Cost (UAC) refers to the constant and equal annual expense incurred over the life…

Q: A parcel of land can be leased for a period of 10 years. Initial development costs for clearing,…

A: Initial cost (C) = P 250000 First year revenue (R) = P 22000 Growth rate (g) = 5% n = 10 years r =…

Q: e dismantling , removal and restoration costs are 750 000. an appropriate discount rate (after tax)…

A: The present value is equivalent value today based on the interest rate and time of the future cash…

Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

Topic Video

Question

During the first 10 years of the life of a certain machine the following were spent for its
maintenance: During the first 5 years, P 2,000 was spent each year; during the second 5
years, P 3,000 each year was spent. In addition, P5,000 was spent for overhauling at the end
of the fourth year and P. 0,000 also for overhauling at the end of the ninth year. If money is
worth 7% compounded annually, what is the equivalent uniform annual cost for the 10-year
period?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Cashflows

VIEW

Calculation of Equivalent Uniform Annual Cost

VIEW

Final answer

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

A contractor's price for a new building was $116,000. You decide to buy the building, making a payment of $23,200 down and financing the balance by making equal payments at the end of every 6 months for for 6 years. Interest is 5.4% compounded semi-annually. 10
Can anyone help me to answer this ?
Calculate the capitalized cost of an equipment maintained at a rate of 6% every year for $10,000, replaced every 3years for $25,000 at the same rate, and bought for $110,500.
Your company purchased $95,000 of equipment $15,000 cash downpayment and the rest with a note. The equipement has ten-year useful life and a salvage value of $4,000. All principal and interest on the note is due in three years. Calculate the month's interest expense on the Equipment loan. It is a five year note with interest (3 percent) and principle payable at the end of year 5.
A property was purchased for $3976.00 down and payments of $1249.00 at the end of every six months for 6 years. Interest is 8% per annum compounded monthly. What was the purchase price of the property? How much is the cost of financing? The purchase price of the property was $ $☐ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
A property was purchased for $3799.00 down and payments of $1377.00 at the end of every six months for 4 years. Interest is 6% per annum compounded quarterly. What was the purchase price of the property? How much is the cost of financing?
Maintenance costs on a piece of equipment begin at $1000 in period 1 and increase by $250 each year over its 5-year life. If the interest rate is 8%, how much money should be put aside now to pay these maintenance costs?
A machine’s first cost is $60,000 with salvage values over the next 5 years of are $50K, $40K, $32K, $25K, and $12K. The annual operating and maintenance costs are the same every year. Determine the machine total cost.
A bridge that was constructed at a cost of P 75,000 is expected to last 30 years, at the end of which time its renewal cost will be P 40,000. Annual repairs and maintenance are P 3,000. What is the capitalized cost of the bridge at an interest of 6%? 133,433.00 50,000.00 125,000.00 140,625.00 75,948.67 58,433.00
An investment made with an expenditure of $160,000 at the start of the project. The income from the project at the end of each year for 5 years is $80000, $90000, $85,000, $75,000 and $70,000. He made an investment of $20000 again at the end of 2nd year. The maintenance will cost 1500$ for the first year and it increments by 500$ for the second year and third year onwards it increments by 1000$. The salvage value is 70,000$. Draw a CFD for the project and give the analysis of the project based on the CFD.