What is the most appropriate Analysis Period for the four different alternatives shownbelow?ItemFirst CostUniform Annual BenefitSalvage ValueUseful Life in YearsMachine 1$1,244,565$273,804$124,45612Machine 2$2,297,397$413,531$229,74020d. 60 yearse. 12 yearsMachine 3$8,585,814$1,416,659$858,58160Machine 4$3,737,193$672,695$373,71930Incremental Analysis (AIRR)b. 12 years for Machine 1; 20 years for Machine 2; 60 years for Machine 3; and 30years for Machine 4c. The average of the useful lives of the different alternatives, in this case, 30.5years

When alternative projects have different useful lives, the same common useful life for all projects…

Item First Cost Uniform Annual Benefit Salvage Value Useful Life in Years Machine 1 $1,244,565 $273,804 $124,456 12 a Incremental Analysis (AIRR) Machine 2 $2,297,397 $413,531 $229,740 20 Machine 3 $8,585,814 $1,416,659 $858,581 60 Machine 4 $3,737,193 $672,695 $373,719 30

Item First Cost Uniform Annual Benefit Salvage Value Useful Life in Years Machine 1 $1,244,565 $273,804 $124,456 12 a Incremental Analysis (AIRR) Machine 2 $2,297,397 $413,531 $229,740 20 Machine 3 $8,585,814 $1,416,659 $858,581 60 Machine 4 $3,737,193 $672,695 $373,719 30

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Modified Accelerated Cost Recovery System An example of a depreciation schedule under the Modified Accelerated Cost Recovery System of depreciation is shown. The Internal Revenue Service (IRS) classifies various assets according to useful life and sets depreciation rates for each year of the asset’s life. This asset has a five year life. The MACRS rates are shown in the schedule. This example is for an asset with a cost of $40,000 and a salvage value of $4,000. MODIFIED ACCELERATED COST RECOVERY SYSTEM Year Cost × Rate = DepreciationExpense AccumulatedDepreciation(End of Year) Book Value(End of Year) 1 $40,000 20.00% $8,000 $8,000 $32,000 2 40,000 32.00% 12,800 20,800 19,200 3 40,000 19.20% 7,680 28,480 11,520 4 40,000 11.52% 4,608 33,088 6,912 5 40,000 11.52% 4,608 37,696 2,304 6 40,000 5.76% 2,304 40,000 0 Prepare a depreciation schedule showing the depreciation…
MODULE 5 8-7 DISPOSAL OF ASSET Please read the problem below and provide the correct answer along with an explanation of the answer. Thank you! Dump It is selling a machine that no longer is large enough for the production requirements. Dump It has had the machien for 3 years and has depreicated it using the straightline method. Original cost had been $98,000 and salvage was estimated at $6000. The machine has a life of 8 years. a) Journalize the sale of the imagine $70,000 b) Journalize teh sale of the machine for $50,000
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Question 21 During year 4, King Company made the following expenditures relating to its plant building: Continuing and frequent repairs Repainted the plant building $40,000 10,000 Major improvements to the electrical wiring system 32,000 Partial replacement of roof tiles 14,000 How much should be charged to repair and maintenance expense in year 4? O $82,000 O $96,000 O $64,000 O$54,000
Exercise 13-17A (Algo) Asset replacement decisions-opportunity cost LO 13-5 Jordan Freight Company owns a truck that cost $42.000 Currently, the truck's book value is $22,000, and its expected remaining useful life is five years. Jordan has the opportunity to purchase for $30100 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $5,600 per year more than fuel cost for the new truck. The old truck is paid for but, in spite of being in good condition, can be sold for only $10,000 Required Calculate the total relevant costs. Should Jordan replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out? Total relevant costs Should Jordan replace or continue the old truck? Keep Old Replace the old truck Replace With New
Chapter 10 Problem Set A Problem 10-1 On January 1, 2019 Crampton Company acquired land on which to construct a new distribution warehouse. During 2019, the company made expenditures as follows: Contract price of the land $600,000 Closing costs $23,000 Hoerr Excavating for clearing and grading $65,000 Sparks Concrete Construction for sidewalk and parking lot $158,500 Touchstone Lighting for parking lot lighting $21,500 J Hacker and Associates, Architects $71,000 Town of Normal for building permits $9,500 Lewis General Contractors $4,100,000 Crampton also purchased $1,450,000 of warehousing equipment and conveyors. The entire facility was placed in service before December 31, 2019. Prepare Crampton Company’s PPE section of their balance sheet dated December 31, 2019 before the adjusting entries for depreciation
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The components of the cost of a major item of equipment are given below. GHS Purchaseprice 780,000 Import duties 117,000VAT (refundable) 78,000 Site preparation 30,000 Installation costs 28,000 Pre-production 18,000 Initial operating losses before the asset reaches planned performance…

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