Need answer please not use ai Consider the following data: Silicon Valley Companypurchased an asset costing $72,000 that is expected toproduce 500,000 units and have a salvage value of $6,000.The first year, 90,000 units are produced; the second year,82,000 units are produced; the third year, 94,000 units areproduced. Using the units-of-production method, thebook value of the asset at the end of year 3 would be:A. $60,120B. $36,888C. $23,408D. $10,824E None of these answers are correct

Step 1: Define DepreciationDepreciation is a non-cash expense charged in the income statement to…

Answered: Consider the following data: Silicon…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Assume that the equipment consists of an input device with a cost of $60,000, residual value of $5,000, and useful life of 5 years; a processor with a cost of $140,000, residual value of $10,000, and useful life of 10 years; and an output device with a cost of $231,000, residual value of $22,000, and useful life of 12 years. The equipment is expected to provide benefits evenly over time. Also assume that the equipment has a salvage value of $30,000 and a physical life of 14 years. The salvage values of the input device, processor, and output device are $3,000, $8,000, and $19,000, respectively. The physical lives of the input device, processor, and output device are 6 years, 12 years, and 14 years, respectively. Calculate the amount of depreciation for 2020, 2021, and 2022 using the straight-line method. Crane Company Ltd. prepares financial statements under ASPE. (Round answer to 0 decimal places, e.g. 5,275.)
Using the information in the following table , what is the depreciation expense per year created by the project? Dunaway Industries is evaluating the idea of expanding their production facility in Cobb County The CFO gathered the following data. Dunaway Industries spent $ 500,000 researching other sites for their expansion. The equipment needed for the expansion will cost $ 25,600,000 fully installed . The equipment will be depreciated over 20 years to a salvage value of $ 1,000,000 . Dunaway Industries uses straight -line depreciation . If Dunaway accepts the project , the company will sell the equipment for salvage value ( i.e.$ 1,000,000 ) at the end of the life of the project . If Dunaway Industries adds the new equipment , sales are expected to increase by 17,400,000 and costs are expected to increase by $ 10,000,000 . The appropriate tax rate for Dunaway Industries is 30% The capital of the firm includes 70% of equity and 30% of debt . Dunaway Industries recently issued a bond…
Consider a capital expenditure project that has forecasted revenues equal to $32,000 per year; cash expenses are estimated to be $29,000 per year. The cost of the project equipment is $23,000, and the equipment’s estimated salvage value at the end of the project is $9,000. The equipment’s $23,000 cost will be depreciated on a straight-line basis to $0 over a 10-year estimated economic life. Assume that the project requires an initial $7,000 working capital investment. The company’s marginal tax rate is 30%. Calculate the project’s net present value using a 12% discount rate.
A two-year project has an initial requirement of $500,000 for fixed assets and $100,000 for net working capital. The fixed assets will be depreciated using MACRS and the fixed asset falls into the three-year MACRS class. Depreciation rates for years 1 and 2 are 0.3333 and 0.4445. The estimated salvage value is $120,000. All of the net working capital will be recouped at the end of the 2 years. Management estimates that sales revenues less costs will be $700,000 per year for years 1 and 2. The discount rate is 9 percent and tax rate is 35 percent. What is the initial investment for this project? $513,327.50 ○ $600,000 $1,300,000 $500,000
A new production system for a factory is to be purchased and installed for $135331. This system will save approximately 300,000 kWh of electric power each year for a 6-year period. Assume the cost of electricity is $0.10 per kWh, and factory MARR is 15% per year, and the salvage value of the system will be $8662 at year 6. Using the PW method to analyzes if this investment is economically justified A- calculate the PW of the above investment and insert the result below.
A company is planning to purchase a machine that will cost 240,000, have a six-year life, and be depreciated over a six-year period with no salvage value. The company expects to sell the machine's output of 30,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the accounting rate of return for this machine? Sales Costs: 900,000 Manufacturing 520,000 Depreciation on machine 40,000 Selling and administrative expenses 300,000 (860,000) Income before taxes 40,000 Income tax (25%) (10,000) Net Income 30,000 Choices: 4% 8% 16.7% 25% 12.5%
What is the average amount invested in a machine during its predicted five-year life if it costs $200,000 and has a $20,000 salvage value? Assume that net income is received evenly throughout each year and straight-line depreciation is used.
You are evaluating two different machines. - Machine A costs $1,000,000, has a three-year life with expected salvage value in three years of $448,000, and has pre-tax operating costs of $150,000 per year. - Machine B costs $1,200,000, has a five-year life with expected salvage value in five years of $344,064, and has pre -tax operating costs of $200,000 per year. - Both machines are in Class 8 (CCA rate of 20 percent per year). - If your tax rate is 40 percent and your discount rate is 10 percent, compute the EAC (equivalent annual cost) for both machines. Which do you prefer?
You are evaluating two different silicon wafer milling machines. The Techron I costs $279,000, has a three-year life, and has pretax operating costs of $76,000 per year. The Techron II costs $485,000, has a five-year life, and has pretax operating costs of $43,000 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $53,000. If your tax rate is 22 percent and your discount rate is 13 percent, compute the EAC for both machines. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Which machine do you prefer? multiple choice Techron I Techron II
The table given below lists the relevant cost items for a specific system purchase. The operating expenses for the new system are $10,000 per year, and the useful life of the system is expected to be five years. The salvage value for depreciation purposes is equal to 25% of the hardware cost. Cost Item Cost Hardware $160,000 Training $15,000 Installation $15,000 a) What is the Book Value (BV) of the device at the end of year three if the Straight Line (SL) depreciation method is used? b) Suppose that after depreciating the device for two years with the SL method, the firm decides to switch to the double declining balance depreciation method for the remainder of the device's life (the remaining three years). What is the device's BV at the end of four years?
Lakeside Inc. is considering replacing old production equipment with state-of-the-art technology that will allow production cost savings of $10,000 per month. The new equipment will have a five-year life and cost $420,000, with an estimated salvage value of $33,000. Lakeside's cost of capital is 7%. Lakeside Inc. uses a straight-line depreciation method. Required: Calculate the payback period and the accounting rate of return for the new production equipment. (Round your answers to 2 decimal places.) Payback period Accounting rate of return years %
Using the information in the following table, what is the NPV of the project (rounded to the nearest dollar)? Dunaway Industries is evaluating the idea of expanding their production facility in Cobb County The CFO gathered the following data. Dunaway Industries spent $500,000 researching other sites for their expansion The equipment needed for the expansion will cost $25,600,000 fully installed . The equipment will be depreciated over 20 years to a salvage value of $1.000.000 . Dunaway Industries uses straight -line depreciation . If Dunaway accepts the project the company will sell the equipment for salvage value ( i.e.$ 1,000,000 ) at the end of the life of the project If Dunaway Industries adds the new equipment , sales are expected to increase by 17,400,000 and costs are expected to increase by $ 10,000,000 . The appropriate tax rate for Dunaway Industries is 30 % The capital of the firm includes 70 % of equity and 30 % of debt . Dunaway Industries recently issued a bond with 30…

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS