Question 7Elmdale Company has a machine that affixes labels to bottles. The machine has a book value of $80,000and a remaining useful life of 3 years and no salvage value. A new, more efficient machine is available ata cost of $300,000 that will have a 3-year useful life with no salvage value. The new machine will lowerannual variable production costs from $520,000 to $410,000.What is the effect on net income over the 3 years if Elmdale Company chooses to replace theequipment?Should Elmdale replace the equipment?lyjıH4 pts99+

To decide if the machine must be replaced or continued , a cost analysis is done Cost analysis the…

ne that affixes labels to bottles. The machine has a book value c years and no salvage value. A new, more efficient machine is a ve a 3-year useful life with no salvage value. The new machine ts from $520,000 to $410,000. me over the 3 years if Elmdale Company chooses to replace the

ne that affixes labels to bottles. The machine has a book value c years and no salvage value. A new, more efficient machine is a ve a 3-year useful life with no salvage value. The new machine ts from $520,000 to $410,000. me over the 3 years if Elmdale Company chooses to replace the

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

A bhaliya
XYZ company has A piece of new equipment will cost $70,000. The equipment will provide a cost savings of $15,000 per year for ten years, after which it will have a $3,000 salvage value. If the required rate of return is 14%, the equipment's net present value is: a. (8240) b. None of answers are correct c. 9050 d. 23888
Finch Freight Company owns a truck that cost $46,o00. Currently, the truck's book value is $25,000, and its expected remaining useful life is four years. Finch has the opportunity to purchase for $30,100 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $6,300 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 Finch replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out? Keep Old Replace With New Total relevant costs Should Finch replace or continue the old truck? Replace the old truck
1 A new backhoe costs Bob the Builder $X. It is expected to have a salvage value of $Y after N years. What rate of depreciation for the declining-balance method should Bob be using? X= Y= N= Depreciation Rate $750,000 $58,000 29 years Try Again What is the Book Value after 25 years? Try Again (Use unrounded rate)
HELP ME
A cooling water pumping station at a manufacturing plant in N City cost $30,000,000 to construct, and it is projected to have a 25-year life with an estimated salvage value of 10% of the construction cost. If the cooling water pumping station will be book-depreciated to zero over a recovery period pf 30 years, calculate d_10 using the double declining balance method.
note: can you help me answer the question for s, t and u? Lee Wah Press (LWP) is considering a leasing arrangement to finance some special printing machines that it needs for production during the next three years. A planned change in the company’s production technology will make the new machine obsolete after 3 years. LWP will depreciate the new machine on a straight-line basis towards zero salvage value. The firm can borrow the installed cost of $480,000, at 10% interest per annum, calculated on an annual reducing balance, to buy the new machine or make three equal beginning-of-year lease payments of $210,000 should it decide to take up lease financing. Annual maintenance costs associated with ownership, payable at the end of year, are estimated at $25,000. Annual insurance premium associated with the purchase is estimated to be at $6,000, payment is on a cash-before-cover basis. Should LWP opt for lease financing, all other costs will be borne by the lessor. LWP tax rate is 40%.…
The equipment was purchased 3 years ago by the Ajax Corporation for $1,20,000. When purchased, it had an expected service life of 10 years, an estimated salvage of $25,000 after 10 years and AOC of $30,000. Current account book value is $80,000. The system is deteriorating rapidly; 3 more years of use and then salvaging it for $10,000 are now the expectations. The AOC is averaging $30,000. An improved version is offered today for $100,000 with a trade-in of $70,000 for the current system. The price goes up next week to $110,000 with a trade in of $70,000. The engineer estimates the new equipment to have useful life of 10 years, a salvage of $20,000, and an AOC of $20,000. A $70,000 market value appraisal of the current machine was made today. What would be the decision, if a replacement study is made today.
please answer within 30 mins in details.
PLEASE SOLVE THIS TWO PROBLEMS ASAP. THANK YOU! A. A machine costs P388868 with a salvage value of P18029 is expected to last for 28537 hours in 5 years. In the first year of service it was used for 8077 hours. Compute the book value at the end of the first year. B.The cost of a certain asset is P486042 , its life is 5 years and scrap value is P9050 . Find the cost of depreciation after the first year using a constant percentage method.
Georgia Ceramic Company has an automatic glaze sprayer that has been used for the past 10 years. The sprayer can be used for another 10 years and will have a zero salvage value at that time. The annual operating and maintenance costs for the sprayer amount to $15,000 per year. Due to an increase in business, a new sprayer must be purchased, either in addition to or as a replacement for the old sprayer.• Option 1: If the old sprayer is retained, a new, smaller capacity sprayer will be purchased at a cost of $48,000; this new sprayer will have a $5.000 salvage value in 10 years and annual operating and maintenance costs of $12,000. The old sprayer has a current market value of $6.000.• Option 2: If the old sprayer is sold, a new sprayer of larger capacity will be purchased for $84,000. This sprayer will have a $9,000 salvage value in 10 years and annual operating and maintenance costs of $24,000.Which option should be selected at MARR = 12%?