Answered: New Equipment Size Original Cost of…

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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Question

A refinisher of antiques named Constance has been so successful with her small business that she is planning to expand her shop. She is going to start enlarging her shop by purchasing the following equipment.(a) What would be the net cost to Constance to obtain this equipment? Assume that she can trade the old equipment in for 15% of its original cost. Assume there has been no inflation in equipment prices. (b) Suggest a green engineering approach to constance for disposing of the solvents and lacquers used in her business.

New
Equipment Size
Original Cost of Original Power-Sizing
Equipment
Equipmen
Exponent
Size
Varnish
50 gal $3500
0.80
75 gal
bath
Power
3/4 hp $250
0.22
1.5 hp
scraper
Paint
3 ft3
$3000
0.6
12 ft3
booth

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