Determine the rate of depreciation, the total depreciation up to the end of the 8th year and the book value at the end of 8 years for an asset that costs P150,000 when new and has an estimated scrap value of P20,000 at the end of 10 years using the double declining balance method.

Determine the rate of depreciation, the total depreciation up to the end of the 8th year and the book value at the end of 8 years for an asset that costs P150,000 when new and has an estimated scrap value of P20,000 at the end of 10 years using the double declining balance method.

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: 2. The following are the relevant data of two alternative machines are shown in the table below.…

A: Capital budgeting is used by the business firms to determines the gains from different capital…

Q: Question#5: An engineer needs to decide on whether it is economically feasible to buy an equipment…

A: The present value is the present sum of future cash flows of the company. The present value is…

Q: A draw bench for precision forming and strengthening of carbon steel tubing has a cost of…

A: Depreciation is the distribution of an asset's cost over the course of its useful life. During the…

Q: The following data pertain to an investment proposal (ignore income taxes. Cost of the investment…

A: To determine the net present value (NPV) of the proposed investment, we use the following NPV…

Q: Question 25 of 30 . True or False - When creating a time slip in Sage 50, you can only enter the…

A: Time slip represents the records of the time spent by the employees on the activities of the…

Q: What is the decision criteria for Payback Period (PBP) method? A construction company is…

A: According to the payback period decision, a project should be selected only if it can recover the…

Q: Pharoah Company is considering buying a machine for $200000 with an estimated life of 5 years and no…

A: The payback period is a financial metric used to evaluate the time required for an investment to…

Q: Using Declining Balance Method, a machine with an initial cost of $200,000 and a life of 10 years.

A: The value of the specific machinery or asset after its effective or expected life of usage is…

Q: You are considering an investment proj ect with the following financialin formation:(a) Required…

A: The firm should proceed with the project as it will give the company positive returns. Here is the…

Q: Joey has a new project has an initial cost of $190,000. The equipment will be depreciated on a…

A: Average accounting return is computed using formula = Average annual income / Average…

Q: A company has decided to buy a new machine. Two alternatives, A and B, are considered with the…

A: Incremental rate of return is a capital budgeting technique that gives the return of a potential…

Q: PART A.) Decide which of the following machines should be selected (if one of them MUST be selected)…

A: PARTICULAR AMOUNT YEARS PV @8% AMOUNT FIRST COST (20000) 0 1 (20000) ANNUAL…

Q: Indicate the formula, given and the complete solution. A VOM has a selling price of Php 500. It is…

A: Declining balance method of depreciation is also known as reducing balance method. Assets under…

Q: Quiz 2: Select the best alternative plan from the table below using the Annual worth analysis (AW).…

A: The Annual Worth analysis is mostly used to compare different alternatives. These cashflows are…

Q: Solve the depreciation using the sinking depreciation method with the rate of interest of 10%

A: Sinking fund method of depreciation: Under the sinking fund method of depreciation, the amount of…

Q: he tabular information of a certain engineering project REVENUE AND COST ESTIMATES Capital…

A: In this we need to calculate the net present value of option.

Q: MONIBABA Company purchased a machine cost N50000 and will generate the following profits Year 1 3 4…

A: Annual depreciation (straight line basis) = (Cost of the assets - Scrap value) / Estimated life of…

Q: 10s.2 Consider the following financial data for an investment project: · Required capital investment…

A: As per MACRS seven years schedule, depreciation in year 10 is zero.

Q: Compute the EUAC for Pump A. Ideally this value was determined to make the decision of which pump to…

A: N = 6 Initial Cost = 3500 Salvage Value = 500 Since interest rate not given, we assume zero interest…

Q: Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to…

A: Introduction: Accounting rate of return-Accounting rate of return is the ratio of the average…

Q: Initial investment (2 1imos) Useful life Salvage value Annual net income generated. LLT's cost of…

A: Present value (PV) is a financial concept that refers to the current value of a future sum of money…

Q: QNO1: Calculate the annual rate of depreciation by using straight line method for an asset having…

A: Straight line method of depreciation is that method which charges a fixed amount of the value as…

Q: You are to create a year-by-year depreciation schedule for an asset that has a cost basis (B) of…

A: The salvage Value is $80,000 The price of the Equipment is $950,000 Project life is 10 years To…

Q: Determine the economic useful life of a piece of equipment whose initial cost is $10,000 and its…

A: EAC or equivalent annual cost is the annual cost of owning and maintaning the asset over its entire…

Q: An asset costs $150,000 and has a salvage value of $15,000 after 10 years. What is the depreciation…

A: Business organizations are required to charge the depreciation expense in their books of accounts so…

Q: help please answer in text form with proper workings and explanation for each and every part and…

A: NPV calculations for the projecct consider best and worstcase scenarios by adjusting sales price,…

Q: Calculate Accounting Rate of Return (on average investment) of Machine A (expressed to two decimal…

A: Concept. Accounting rate of return is the rate of return calculated as dividing average net profits…

Q: 1. The machine costs P210 000 and expected to have a salvage value of P15 000 after 12 years.…

A: Given information, Cost of the machine =P210,000 Useful life =12 years Salvage value =P15,000…

Q: Answer using excel and make sure answer is correct. here is the data only answer based on this

A: Here is how you would set this up in Excel:DescriptionValueFormulaInstallation…

Q: DT Lid, provides you the following information 1.Purchase price of machine Rs. 190000 2.Installation…

A: Discounted pay back period is used in capital budgeting decision in order to identify the time…

Q: Evaluate and select the best purchase of the following vehicles using straight line depreciation, a…

A: Depreciation = ( cost - salvage value)/life For A, depreciation= (20000 - 5000)/6 = 2500…

Q: The cash flows and Net salvage value of Project Y is given the following table: Year Cash flows…

A: The economic life of the project or an asset can be found by finding the NPV (which is one of the…

Q: A machine having a first cost of P60,000.00 will be retired at the end of 8 years. Depreciation cost…

A: Under the declining balance method, depreciation is charged on the reduced book value that is at the…

Q: Which equipment with the estimated life of 10 years, will you choose from the following using annual…

A: Capital budgeting refers to the investment decision about capital expenditure. The selection of the…

Q: IL PROBLEM SOLVING 1. An equipment costing P250. 000 has an estimated life of 15 years with a bok…

A: Declining balance method of depreciation It is one of the depreciation method to compute annual…

Q: achine having a certain first cost FC has a life of 10 years and a salvage value of 6% of the cost…

A: Depreciation- Depreciation is defined as the decrease in the monetary worth of a fixed asset until…

Q: a. The book value after five years using straight-line depreciation is $ (Round to the nearest cent…

A: Depreciation is the deduction in the value of fixed asset over the life of the asset. In straight…

Q: Depreciation

A: Creating a fund for future machine purchase is a wise decision. It lets you’ve money for replacement…

Q: 1. An engineer with Accenture Middle East BV in Dubai was asked by her client to help understand the…

A: Lets understand the basics. Depreciation is a reduction in value of asset due to wear and tear,…

Question

SUBJECT: ENGINEERING ECONOMY
TOPIC: DEPRECIATION

SHOW THE COMPLETE AND DETAILED SOLUTION OF THIS PROBLEM. THANK YOU EXPERTS.

E) Determine the rate of depreciation, the total depreciation up to the end of the 8th year and the book value at the end of 8 years for an asset that costs P150,000 when new and has an estimated scrap value of P20,000 at the end of 10 years using the double declining balance method.

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Similar questions

Solve in excel in both FW and AW analysis. I ll rate
Given the following data of equipment A and B. A First Cost P 50 000 P 150 000 2000 Salvage Value Annual Maintenance 6000 Economic life 6000 3000 5 15 The MARR is 12%. Use sinking fund depreciation. What is the rate of return for the additional initial investment on equipment B?
Required Information [The following information applies to the questions displayed below.] Project A requires a $365,000 initial investment for new machinery with a five-year life and a salvage value of $42,000. The company uses straight-line depreciation. Project A is expected to yield annual net income of $25,300 per year for the next five years. Compute Project A's payback period. Choose Numerator: Payback Period 7 Choose Denominator: = Payback Period Payback period =
Give me step by step solution and explanation
A profitable company making earth-moving equipment is considering an investment of $100,000 on equipment, which will have a 5-year useful life and, no salvage value. If money is worth 10%, which one of the following three methods of depreciation would be preferable? a. Straight line method b. SOYD method c. Two and half declining balance d. MACRS method
A piece of equipment has a first cost of $75000, a maximum useful life of 4 years, and a market (salvage) value described by the relation Sk = 60000 – 10500k, where k is the number of years since it was purchased. The AOC series is estimated using AOC = 30000 + 4500k. The interest rate is 9% per year. When should the company replace this asset?
ENGINEERING ECONOMY
For the below ME alternatives, which machine should be selected based on the AW analysis. MARR=10% First cost, $ Annual cost, $/year Salvage value, $ Life, years Machine A 15000 B- AW for machine B= 8,342 4,000 Answer the below questions : Machine B 6 20,447 6,000 5,000 Machine C 10000 4,000 1,000
Required Information [The following information applies to the questions displayed below.] Project A requires a $365,000 initial investment for new machinery with a five-year life and a salvage value of $42,000. The company uses straight-line depreciation. Project A is expected to yield annual net income of $25,300 per year for the next five years. Compute Project A's accounting rate of return. Choose Numerator: Accounting Rate of Return I Choose Denominator: = Accounting Rate of Return Accounting rate of return
D. Double Declining Method Problem: Determine the rate of depreciation, the total depreciation up to end of the 8th year, and the book value at the end of 8 years for an asset that costs P15,000 now and has an estimated scrap value of P2,000 at the end of 10 years by (a) declining balance method and (b) the double declining balance method. (Make a table in Microsoft Excel)
Consider two air-conditioning systems with the cash flow estimates as given below. Use AW analysis to determine the sensitivity of the economic decision to MARR values of 4%, 6%, and 8% per year. Air-Conditioning System 1 System First cost, $ AOC, $ per year Salvage value, $ New compressor and motor cost at midlife, $ Life, years -10,000 -500 -100 -1,850 8 The annual worth of air-conditioning system 1 when the MARR is 4% is $ The annual worth of air-conditioning system 2 when the MARR is 4% is $ The annual worth of air-conditioning system 1 when the MARR is 6% is $ The annual worth of air-conditioning system 2 when the MARR is 6% is $ The annual worth of air-conditioning system 1 when the MARR is 8% is $ The annual worth of air-conditioning system 2 when the MARR is 8% is $ Air-Conditioning System 2 -14,000 -85 -300 -2,540 12
Required information A company that manufactures magnetic flow meters expects to undertake a project that will have the cash flows estimated. First cost, $. Equipment replacement cost in year 2, $ Annual operating cost, $/year Salvage value, $ Life, years -870,000 -300,000 -920,000 250,000 4 At an interest rate of 10% per year, what is the equivalent annual cost of the project? Find the AW value using tabulated factors. The equivalent annual cost of the project is $-1