Question 4 Assume that there is a machine, with a cost of P171,307, 2/3 depreciated on a straight-line basis, with a book value of P41,603 and with a remaining useful life of 5 years. The old machine has a P1,032 disposal value now; in 5 years its disposal value will be zero. A new machine is available that will dramatically reduce operating costs. Annual revenue of P133,301 will not change regardless of the decision. The new machine will cost P61,813 have zero disposal value at the end of its 5-year life. The new machine promises to slash variable operating costs from P52,521 per year to P80,000 per year. What is the total cost if the equipment will be replaced? Consider that old machine can be sold. Use comma as necessary. Answer should only be an integer. No need to indicate currency in answer.
Question 4 Assume that there is a machine, with a cost of P171,307, 2/3 depreciated on a straight-line basis, with a book value of P41,603 and with a remaining useful life of 5 years. The old machine has a P1,032 disposal value now; in 5 years its disposal value will be zero. A new machine is available that will dramatically reduce operating costs. Annual revenue of P133,301 will not change regardless of the decision. The new machine will cost P61,813 have zero disposal value at the end of its 5-year life. The new machine promises to slash variable operating costs from P52,521 per year to P80,000 per year. What is the total cost if the equipment will be replaced? Consider that old machine can be sold. Use comma as necessary. Answer should only be an integer. No need to indicate currency in answer.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Question 4
ject to explanation.
Assume that there is a machine, with a cost of P171,307, 2/3 depreciated on a straight-line basis, with a book value of P41,603 and with a remaining useful life of 5 years.
The old machine has a P1,032 disposal value now; in 5 years its disposal value will be zero. A new machine is available that will dramatically reduce operating costs.
Annual revenue of P133,301 will not change regardless of the decision. The new machine will cost P61,813 have zero disposal value at the end of its 5-year life. The new
machine promises to slash variable operating costs from P52,521 per year to P80,000 per year.
What is the total cost if the equipment will be replaced? Consider that old machine can be sold. Use comma as necessary. Answer should only be an integer. No need to
indicate currency in answer.
W
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