Required informationA theft-avoidance locking system has a first cost of $19.000, an AOC of $16,000, and no salvage value after its 3-year life.Assume that you were told the service provided by this asset would be needed for only 5 years. This means that the assetwill have to be repurchased and kept for only 2 years.What would its market value, call it M. have to be after 2 years in order to make its annual worth the same as it is for its 3-year life cycle at an interest rate of 10% peryear? Determine the market value Musing a spreadsheet with PMT functions and GOAL SEEK(Please upload your response/solution using the controls below.)

To find the market value (M) after 2 years that would make the annual worth the same as it is for…

Answered: Required information A theft-avoidance…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 7EB: An auto repair company needs a new machine that will check for defective sensors. The machine has an...

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A theft-avoidance locking system has a first cost of $14,500, an AOC of $13,000, and no salvage value after its 3-year life. Assume that you were told the service provided by this asset would be needed for only 5 years. This means that the asset will have to be repurchased and kept for only 2 years. What would its market value, call it M, have to be after 2 years in order to make its annual worth the same as it is for its 3-year life cycle at an interest rate of 10% per year? Determine the market value M using factors. The market value M is $
! Required information Two options are available for setting up a wireless meter scanner and controller. A simple setup is good for 2 years and has an initial cost of $11,000, no salvage value, and an AOC of $27,000 per year. A more permanent system has a higher first cost of $73,000, but it has an estimated life of 6 years and a salvage value of $15,000. It costs only $17,000 per year to operate and maintain. NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. If the two options are compared using an incremental rate of return, what is the incremental cash flow in year 6? The incremental cash flow in year 6 is $
Using Declining Balance Method, a machine with an initial cost of $200,000 and a life of 10 years. What must be the minimal salvage value, usch that its book value after 5 years does not fall below $10,000? Show complete solution.
Which of the following is a qualifying asset? Biological asset measured at fair value less costs to sell A multi-million dollar executive jet plane that is ready for its intended use upon purchase A second-hand heavy machinery that takes 2 years to refurbish and customize for its intended use A long-term note receivable (financial asset)
1. You have been asked to evaluate the proposed acquisition of a new portable MRI. The system’s price is $70,000 and it will cost another $10,000 for transportation and installation the system is expected to be sold after three years because a new stationary machine will be acquired at that time the best estimate of the system salvage value after three years is $25,000 the system will have no impact on volume or reimbursement (and hence revenues) but it is expected to save $20,000 per year in operating costs the not for profit business corporate cost of capital is 10% and the standard risk adjustment is 4% points a. What is the project's net investment outlay at time 0? b. What are the projects operating cash flows in years 1, 2, and 3? c. What is the terminal cash flow at the end of year 3? d. If the project has average risk, it is expected to be profitable?
A bioengineer is evaluating methods used to apply an adhesive to microporous paper tape that is commonly used after surgery. The machinery costs $200,000, has no salvage value, and the CFBT estimate is $75,000 per year for up to 10 years. The Te = 38% and i = 8% per year. The two depreciation methods to consider are: MACRS with n = 5 years and SL with n = 8 years (neglect the halfyear convention effect). For a study period of 8 years, (a) determine which depreciation method and recovery period offers the better tax advantage, and (b) demonstrate that the same total taxes are paid for MACRS and SL depreciation.
A computer with a life of 13 years has the following cost and interest rate. What is the EUAC of the computer? initial cost $5500 salvage value annual maintenance $3100 years 1-8 years 9-13 interest rate $275 $425 6% Correct Answer: $780 Your Answer: n/a
A company is considering two alternatives with regards to equipment which it needs. The alternatives are as follows: Alternative A: Purchase Cost of Equipment 703,668700,000 Salvage Value 100,454100,000 Daily operating cost 501500 Economic life, years 10 Alternative B: Rental at 1,5751,500 per day. At 18% interest, how many days per year must the equipment be in use if Alternative A is to be chosen.
Please answer immediately i will give you a good review 2. An asset purchased 2 years ago for P40,000 is harder to maintain than expected. It can be sold now for P12,000 or kept for a maximum of 2 more years, in which case its operating cost will beP20,000 each year, with a salvage value of P10,000 after 1 year or P9000 after two. A suitable challenger will have an annual worth of P24,000 per year. At an interest rate of 10% per year and over a study period of exactly 2 years, determine when the defender should be replaced.
A machine can be purchased at t=0 for $20,000. The estimated life is 15 years, with an estimated salvage value of zero at that time. The average annual operating and maintenance expenses are expected to be $5,500. If MARR =2.54%, what must the average annual revenues be in order to be indifferent between purchasing the machine and doing nothing? $7,120 $3,880 $6,969 @$7,213 $7,175
The manager of a plant that manufactures stepper drives knewthat MACRS and DDB were both accelerated depreciation methods, but out of curiosity, hewanted to know which one would provide the faster write-off in the first 3 years for equipmentthat has a first cost of $300,000, a 5-year life, and a $60,000 salvage value.(a) Use hand calculations to determine which method yields the lower book value and by howmuch.(b) Develop the complete depreciation schedules on a spreadsheet and use them to answer thequestions above.(c) Using your spreadsheet results, explain what happened to the DDB depreciation amounts foryears 4 and 5.
Equipment will be purchased at a cost of P250,000. It will have no salvage value. The cash flows are expected to be: P37,000, P48,000, P65,000, P71,000, P73,000, and P53,000 over the life of the equipment. What is the payback period? Group of answer choices 3.43 years 6.00 years 5.25 years 4.40 years

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