Daxter Bakers is trying to decide whethe Should keep its existing bread-making machi inological advantages (whiic Jover the existing mach Tollow Old machine New machine Original cost Accumulated depreciation Annual cash operating costs $10.000 $25.000 6.000 9.500 5.000 Current salvage value of old machine Salvage value in 10 years 2.500 650 1.200 Remaining life 12 yrs 12 yrs Refer to Baxter Bakers. The estimated $650 salvage value of the existing machine in 10 years represents aln) Select one: a. opportunity cost of keeping the existing machine for 10 years b. opportunity cost of selling the existing machine now O c.opportunity cost of keeping the existing machine and buying the new machine d. sunk cost

Daxter Bakers is trying to decide whethe Should keep its existing bread-making machi inological advantages (whiic Jover the existing mach Tollow Old machine New machine Original cost Accumulated depreciation Annual cash operating costs $10.000 $25.000 6.000 9.500 5.000 Current salvage value of old machine Salvage value in 10 years 2.500 650 1.200 Remaining life 12 yrs 12 yrs Refer to Baxter Bakers. The estimated $650 salvage value of the existing machine in 10 years represents aln) Select one: a. opportunity cost of keeping the existing machine for 10 years b. opportunity cost of selling the existing machine now O c.opportunity cost of keeping the existing machine and buying the new machine d. sunk cost

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Imagine you have purchased an equipment today for P price. After N years of service you put it on Kijiji to be taken for free. Based on this scenario, which depreciation model shows 100% depreciation in the first year of the service life of this equipment? O Declining Balance O Double Declining Balance O SOYD O 150% Declining Balance O None of the given answers
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A Moving to another question will save this response. Question 14 A project to replace an old machine with a new one is under consideration. The new machine costs $1500 and requires an additional working ca $750 salvage value. Calculate the Initial Outlay of this replacement project assuming the book value of the old asset is $1500. The firm's margina O $1,912.50 O $337.50 O $1,837.50 O $1,087.50 O None of the listed choices is correct A Moving to another question will save this response. MacBook Air sc 88 FA F1 F2 F3 F5 F6 @ # $ & 3. 4 5 6 7 Q W T Y S D C V option command
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Which of the costs and benefits above are relevant to the decision to replace the oven?
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Payback, Accounting Rate of Return, Net Present valde, Internal Rate of Retum Follow the format shown in Exhibit 12B.1 and Exhibit 12B.2 as you complete the requirements below. Woodard Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of tractors. The outlay required is $460,800. The NC equipment will last 5 years with no expected salvage value. The expected after-tax cash flows associated with the project follow: Year 1 2 3 4 5 Required: Cash Revenues $612,000 612,000 612,000 612,000 612,000 Cash Expenses $432,000 432,000 432,000 432,000 432,000 1. Compute the payback period for the NC equipment. Round your answer to two decimal places. 2.56 ✓ years Check My Work 2. Compute the NC equipment's ARR. Round the percentage to one decimal place. Assume straight-line depreciation. 19.1 ✓ % 3. Compute the investment's NPV, assuming required rate of return of 10%. Round present value calculations and your final answer…
Vaughn Manufacturing is considering the replacement of a piece of equipment with a newer model. The following data has been collected: Old Equipment New Equipment Purchase price $220500 $367500 Accumulated depreciation 88200 - 0 - Annual operating costs 294000 235200 If the old equipment is replaced now, it can be sold for $58800. Both the old equipment’s remaining useful life and the new equipment’s useful life is 5 years. The company uses straight-line depreciation with a zero salvage value for all of its assets.For the 5-year period, what is the increase or decrease in net income associated with the new equipment? $88200` $58800 $(14700) $(73500)
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Crane Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isn't equipped to do. Estimates regarding each machine are provided here. Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows Net present value Machine A $77,000 8 years 0 Profitability index $19,900 $4,800 Machine A Which machine should be purchased? Click here to view the factor table. Calculate the net present value and profitability index of each machine. Assume a 9% discount rate. (If the net present value is negative. use either a negative sign preceding the number eg -45 or parentheses eg (45). Round answer for present value to 0 decimal places, e.g. 125 and profitability index to 2 decimal places, e.g. 10.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Machine B should be purchased. $188,000 8 years 0 $40,200 $9,860…