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…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Provide step by step manual solution, given, and depreciation table for below mentioned problem. Make sure yet that your answer is the same as the given answer before sending your solution. An asset costing P50,000 has a life expectancy of 6 years and an estimated salvage value of P8,000. Calculate the depreciation charge at the end of the fourth period using fixed-percentage method. Answer. P5,263.87
Current Attempt in Progress BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isn't equipped to do, Estimates regarding each machine are provided below. Original cost Estimated life i Salvage value Estimated annual cash inflows Estimated annual cash outflows Net present value Machine A Profitability index $78,300 Which machine should be purchased? 8 years $19,700 $5,040 Machine A 0 should be purchased Click here to view the factor table Calculate the net present value and profitability index of each machine. Assume a 9% discount rate. Of the net present value is negative, use either a negative sign preceding the number eg-45 or parentheses eg (45). Round answer for present value to O decimal places, s 125 and profitability index to 2 decimal places, eg. 10.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided) Machine B $185,000 8 years 0…
You have been assigned to check the valuation of InfoSystems, a software firm, done by acolleague of you. Infosystems has an expected life 5 years, constant cash flows over thisperiod, and zero salvage value. The income statement of the Infosystems is given as follows: Years 1-5 Revenues €1000 -Operating expenses €550 EBIT €450 - Interest expesnes €85 Taxable income €365 - Taxes €146 Net income €219 Infosystems has no capital expenditures, depreciation or working capital needs, i.e. theearnings are the cash flows to the firm. The cost of capital is 10%i. Estimate the value of Infosystems.ii. Assume that the value derived in (i) is the one also estimated by your colleague. Howwould you change your calculations if you are given that the cash flows are real cashflows and the cost of capital is the nominal cost of capital. The expected inflation rateis 2% annually. Comment on your answer.
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 $
i.3
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)
Subject: accounting
An electric company must decide between two options for managing the blowdown water from its cooling tower. Option 1 is to continue the lease on 50 acres of land for another 5-year period and dispose of the water by spray irrigation. The landowner will move the pipe around as necessary and maintain the spray nozzles and valves. The previous lease cost $125,000 per year with payments due midway through each year. Now the landowner will require beginning of year payments of $180,000 each year. Option 2, which releases the 50 acre tract of land, involves purchasing a treatment system that will allow the recycling of most of the blowdown water. This system will have an initial cost of $1,600,000 and an AOC of $58,000 per year. However, the company will save $220,000 per year because it will not have to purchase as much make-up water as with option 1. At the end of 5 years, the company will be able to sell the equipment back to the local equipment supplier for 30% of the first cost. If the…
3.) An underground rock mechanics testing device is to be double declining depreciated. It has a first cost of $25,000 and an estimated salvage of $2,500 after 12 years. (a) What is book value and market value? (b) Calculate the depreciation and book value for years 1 and 4. (c) Calculate the implied salvage value after 12 years.
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