On January 1, 20X2, Mace, which uses the straight-line method, purchases a machine for $72,000 that it expects to last for 8 years; Mace expects the machine to have a residual value of $10,000. What is the machine's book value at the end of 20X4? i. $48,750 ii. $42,010 iii. $35,550 iv. $50,400 Accurate answer

On January 1, 20X2, Mace, which uses the straight-line method, purchases a machine for $72,000 that it expects to last for 8 years; Mace expects the machine to have a residual value of $10,000. What is the machine's book value at the end of 20X4? i. $48,750 ii. $42,010 iii. $35,550 iv. $50,400 Accurate answer

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 8MC: Grummet Company is acquiring a new wood lathe with a cash purchase price of $80,000. The Wood Master...

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2. A company determines that the maximum they should pay for a new machine is $46,679. The company estimates the machine will produce a net cash flow of $8,000 per year and will last for 7 years. The interest rate that is acceptable to the company is 5%. At the end of 7 years the company estimates it will be able to sell the machine for what amount? A. $980 B. $391 C. $1,186 D. $ 68 E. $550
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Grummet Company is acquiring a new wood lathe with a cash purchase price of $80,000. The Wood Master Industries (the manufacturer) has agreed to accept $23,500 at the end of each of the next 4 years. Based on this deal, how much interest will Grummet pay over the life of the loan? A. $94,000 B. $80,000 C. $23,500 D. $14,000
ME Board Exam October 1997 01. A company puts P25 000.00 down and will pay P5000.00 every year for the life of a machine for 10 years. If the salvage value is zero and the interest rate is 10% compounded annually, what is the present value of the machine? (Ans:- P55 723.00) An electric generator is purchased for P80 000.00, it is expected to be used for five yoars, and then sold for P15 000.00. Annual operating and maintenance costs are estimated at P20 000.00. Using a discount rate of 10%, determine the present worth of the investment. 02. (Ans. - P146 502.00) 03. CE Board Exam November 1999 To maintain its newly acquired equipment, the company needs P40 000.00 per year for the first five years and P60 000.00 per year for the next five years. In addition, an amount of P140 000.00 would also be needed at the end of the fifth and the eighth years. At 6% interest, what is the present worth of these costs? (Ans. - P549 812.00)
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USE MANUAL SOLUTIONA machine has a first cost of ₱100,000 and salvage value of ₱10,000 after 10 years. The annual maintenance of the machine is ₱4,000. If interest rate is 10%, find the annual cost of the machine. A. ₱17,000.34 B. ₱19,647.08 ( ANSWER) C. ₱21,083.56 D. ₱32,074.56