Mr Dela Cruz is going to buy a new machine for manufacturing itsproduct: Machine A has a first cost of P50,000; annual maintenanceP6,000; life 12 years and salvage value of P2,000. Machine B has a firstcost of P140,000; annual maintenance P2,500, life 36 years and salvagevalue P10,000. Money is worth 9%.Compute the present worth cost of BP156,060P166,080P186,070P154,292

First cost of B (X) = P 140000 Annual cost (A) = P 2500 Salvage value (S) = P 10000 r = 9% n = 36…

Answered: Mr Dela Cruz is going to buy a new…

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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Mio is going to buy a new machine for manufacturing its product: Machine A has a first cost of P50,000; annual maintenance P6,000; life 12 years and salvage value of P2,000. Machine B has a first cost of P140,000; annual maintenance P2,500, life 36 years and salvage value P10,000. Money is worth 9% .Compute the annual cost of machine A
Mr Dela Cruz is going to buy a new machine for manufacturing its product: Machine A has a first cost of P50,000; annual maintenance P6,000; life 12 years and salvage value of P2,000. Machine B has a first cost of P140,000; annual maintenance P2,500, life 36 years and salvage value P10,000. Money is worth 9%. What is the rate of return on additional investment? show solution A. 6.5% B. 7.4% C. 5.93% D. 10.5%
Margaret has a project with a $28 000 first cost that returns $5000 per year over its 10-year life. It has a salvage value of $3000 at the end of 10 years. If the MARR is 15 percent, what is the present worth of this project? (Ctrl) -
. A new engine will cost P12,000 with an estimated life of 15 years and a salvage value of P800 and guaranteed to have an operating cost of P3500 per year. The new engine is considered as a replacement of the old one. The old engine had a total annual cost of P5,200 to operate. Determine the rate of return of the new investment using 6% sinking fund to recover depreciation, if the old engine could be sold now for P2000.
Company A is considering two alternatives. Machine A has a first cost of $15,000. The life is 6 years and it has an annual maintenance and operating cost of $1,500. Machine B has a first cost of $18,000, a life of 8 years and a salvage value of $1,500. The annual operating cost is $1,000. Which machine should be used to justify the purchase of such machine if money is worth 7% and calculate the difference between the equivalent annual worths.
A building cost P8.5 million and the salvage value is P50,000 after 23 years. The annual maintenance cost is P85,000, costs of repair is P350,000 every 3 years. Find the capitalized cost if money worth 14% per annum.What is the renewal cost?What is the capitalized cost?
Company xyz will buy a carpet loom. Its purchase price is 250000 TL, its scrap value is 25000, its economic life is 10 years, and its annual net cash inflow is 87000 TL. Since the capital cost of the company is %35. Would you recommend that this machine be purchased by the company?
2) An existing machine in the factory has an annual maintenance cost of 40,000. A new and more efficient machine will require an investment of 90,000 and it is estimated to have a salvage value of 30,000 at the end of 8 years. Its annual expenses for maintenance is 22,000. If the company's MARR is 12%, will it be worthwhile to purchase the new machine using (a) Present Worth Method? (B method?
A machine costs P50,000 5 years ago and the salvage value is estimated at P5,000 7 years from now. If it is to be replaced by a new one and its trade in value is P37,000, find the sunk cost using Sinking Fund Method if i=13%.
Capitalized cost is an application of perpetuity. It is the sum of the first cost and the present worth of all future payments and replacements. A machine costs P300,000 new, and must be replaced at the end of each 15 years. If the annual maintenance required is P5,000, find the capitalized cost, if money is worth 5% and the salvage value is P50,000. First Cost 300000 Present worth of the annual maintenance cost *Letters only Perpetuity of the depreciation cost Capitalized cost a. 178,700 b. 231,700 c. 321,500 d. 400,500 e. 127,700 a. 372,700 b. 441,700 c. 529,500 d. 609,500 e. 631,700
A machine cost ₱100,000 with salvage value of ₱10,000 after 10 years. Ifthe annual maintenance and operation amounts to ₱10,000, annual tax and insuranceamounts to ₱2,000. If the machine will deliver an annual revenue of ₱30,000, is itprofitable? Take i=15%.
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