Required informationBlackwater Spring and Metal utilizes the same computerized spring-forming machinery in its U.S. and Malaysian plants.The first cost was $750,000 with S= $150,000 aftern= 10 years. MACRS (Modified Accelerated Cost RecoverySystem) depreciation with n=5 years is applied in the United States, and standard SL depreciation with n= 10 years isused by the Malaysian facility.Depreciation Rate (%) for Each MACRS Recovery Period in YearsYearn=3n=5n=7n= 10n=15n= 2033.3320.0014.2910.005.003.7544.4532.0024.4918.009.507.2214.8119.2017.4914.408.556.684.7.4111.5212.49I1.527.706.1811.528.939.226.935.716.5.768.927.37.6.235.29178.936.555.904.894.466.555.904.526.565.914.46106.555.904.463.285.914.46125.904.46135.914.46145.904.46155.914.462.954.46164.4617-202.2321Use a spreadsheet to plot the book values for both methods on a single graph. (Please upload your response/solution using the controls below.)

Depreciation as per MACRS is based on fixed depreciation rate for particular recovery period, which…

Required information Blackwater Spring and Metal utilizes the same computerized spring-forming machinery in its U.S. and Malaysian plants. The first cost was $750,000 with S= $150,000 after n= 10 years. MACRS (Modified Accelerated Cost Recovery System) depreciation with n=5 years is applied in the United States, and standard SL depreciation with n= 10 years is used by the Malaysian facility. Depreciation Rate (%) for Each MACRS Recovery Perlod In Years Year n=3 n=5 n=7 n= 10 n= 15 n= 20 33.33 20.00 14.29 10.00 5.00 3.75 2. 44.45 32.00 24.49 18,00 9.50 7.22 3. 14.81 19.20 17.49 14.40 8.55 6.68 4. 7.41 11.52 12.49 11.52 7.70 6.18 I1.52 8.93 9.22 6.93 5.71 5.76 8.92 7.37 .6.23 5.29 7. 8.93 6.55 5.90 4.89 4.46 6.55 5.90 4,52 6. 6.56 5.91 4.46 10 6.55 5.90 4.46 3.28 5.91 4.46 12 5.90 4.46 13 5.91 4.46 14 5.90 4.46 5.91 4.46 15 2.95 4.46 16 4.46 17-20 2.23 21 nreadsheet to plot the book yalues for both methods on a single graph. (Please upload your response/solution using the controls below.)

Required information Blackwater Spring and Metal utilizes the same computerized spring-forming machinery in its U.S. and Malaysian plants. The first cost was $750,000 with S= $150,000 after n= 10 years. MACRS (Modified Accelerated Cost Recovery System) depreciation with n=5 years is applied in the United States, and standard SL depreciation with n= 10 years is used by the Malaysian facility. Depreciation Rate (%) for Each MACRS Recovery Perlod In Years Year n=3 n=5 n=7 n= 10 n= 15 n= 20 33.33 20.00 14.29 10.00 5.00 3.75 2. 44.45 32.00 24.49 18,00 9.50 7.22 3. 14.81 19.20 17.49 14.40 8.55 6.68 4. 7.41 11.52 12.49 11.52 7.70 6.18 I1.52 8.93 9.22 6.93 5.71 5.76 8.92 7.37 .6.23 5.29 7. 8.93 6.55 5.90 4.89 4.46 6.55 5.90 4,52 6. 6.56 5.91 4.46 10 6.55 5.90 4.46 3.28 5.91 4.46 12 5.90 4.46 13 5.91 4.46 14 5.90 4.46 5.91 4.46 15 2.95 4.46 16 4.46 17-20 2.23 21 nreadsheet to plot the book yalues for both methods on a single graph. (Please upload your response/solution using the controls below.)

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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Oman Chips company have noticed that the demand of their products increased in last few quarters. The company has decided to establish one production facility in Dhank, which will not only cover the demand of Al Dhahira region but also Al Buriami and some parts of Al Dakhiliya. The company purchased a land by using a significant amount and started constructing building and brought plant and machinery. During this whole process, one day they received a letter from public prosecution that this land is controversial and nothing can be done here. Now the case is in high court and it is expected that the company may lose this case. Now it is the responsibility of the company to _____________________. a. Disclose this issue in the annual meeting to come up with more ideas b. Disclose this information as it has a major impact on the balance sheet c. Show all information in their upcoming journal so that investor can get ideas d. None of the options
Assume Plain Ice Cream Company, Incorporated, in Ithaca, NY, bought a new ice cream production kit (pasteurizer/homogenizer, cooler, aging vat, freezer, and filling machine) at the beginning of the year at a cost of $24,000. The estimated useful life was four years, and the residual value was $2,580. Assume that the estimated productive life of the machine was 10,200 hours. Actual annual usage was 4,080 hours in Year 1; 3,060 hours in Year 2; 2,040 hours in Year 3; and 1,020 hours in Year 4. Required: 1. Complete a separate depreciation schedule for each of the alternative methods. a. Straight-line. b. Units-of-production. c. Double-declining-balance. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Complete a depreciation schedule using the units-of-production method. Note: Use two decimal places for the per unit output factor. Do not round intermediate calculations. Year Depreciation Expense At acquisition 1 2 3 4 Accumulated Depreciation Net…
not included as R&D costs. ? Assessment Tasks Assessment Tasks 9.1 (Bazley et al., 2010) 1. The Befort Company field for a patent on a new type of machine. The application costs totaled P12,000. R&D costs incurred to create the machine were P75,000. In the year in which the company filed for and received the patent, it spent P20,000 in the successful de fense of a patent infringement suit. Required 1. At what amount should the company capitalize the patent? 2. How would you determine the economic life of the patent? 2. On January 4, 2021, the Franc Company purchased for P27,000 a patent that had been filed eight years earlier. The patent covers a manufacturing process that the company plans to use for 15 years. On January 3, 2022, the company paid its lawyer P10,000 for successfully defending the patent in a lawsuit. 28 Required Prepare all the journal entries associated with the patent in 2021 and 2022. 3. On January 11, 2022, The Hughes Company applied for a tradename. Legal costs…
Assume Plain Ice Cream Company, Incorporated, in Ithaca, NY, bought a new ice cream production kit (pasteurizer/homogenizer, cooler, aging vat, freezer, and filling machine) at the beginning of the year at a cost of $28,000. The estimated useful life was four years, and the residual value was $2,560. Assume that the estimated productive life of the machine was 10,600 hours. Actual annual usage was 4,240 hours in Year 1; 3,180 hours in Year 2; 2,120 hours in Year 3; and 1,060 hours in Year 4. Required: 1. Complete a separate depreciation schedule for each of the alternative methods. a. Straight-line. b. Units-of-production. c. Double-declining-balance. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Complete a depreciation schedule using the straight-line method. Year Depreciation Expense At acquisition 1 2 3 Accumulated Depreciation Net Book Value
Subject:
Your answer is partially correct. 5 years ago, a multi-axis NC machine was purchased for the express purpose of machining large, complex parts used in commercial and military aircraft worldwide. It cost $350,000, had an estimated life of 15 years, and O&M costs of $50,000 per year. It was originally thought to have a salvage value of $20,000 at the end of 15 years but is now believed to have a remaining life of 5 years with no salvage value at that time. With business booming, the existing machine is no longer sufficient to meet production needs. It can be kept and supplemented by purchasing a new, smaller Machine S for $215,000 that will cost $37,000 per year for O&M, have a life of 10 years, and salvage value of $215,000(0.8*) after t years. As an alternative, a larger, faster, and more capable Machine L can be used alone to replace the current machine. It has cash price without trade-in of $480,000, O&M costs of $78,000 per year, salvage value of $480,000(0.8*) after t years, and a…
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Smithy Ltd wants to invest in a new machine cooling system. There are three different systems currently in the market: Water-cooled Refrigerant Air-cooled Initial investment 488,000 990,000 1,020,000 Regular maintenance costs per annum 86,000 27,000 80,000 Scheduled major maintenance costs 46,000 72,000 44,000 Energy cost per annum 90,000 60,000 75,000 Other operating cost per annum 107,000 45,000 - Waste per annum 230,000 kilolitres of water* 50 litres of NH3** - Sound tiers (decibels)*** 95 55 85 The water-cooled system and refrigerant system requires a major maintenance at the end of every five years, while the air-cooled system requires a major maintenance at the end of every 10 years. The required rate of return is 10% for all capital investments. Assume a time horizon of 12 years. Ignore tax effects. Required: Calculate the net present value of the three systems. Which option is superior on…
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(a) Niasha Stores recently imported an item of plant from Grenadines Plants Ltd. The following information has been made available with regards to the purchase: Details $ Basic list price 3,000,000 Other costs: Transportation and handling 100,000 Pre-production testing 200,000 Holding structure for plant 350,000 Electrical inputs for plant 120,000 Own labour costs 250,000 Estimated maintenance costs for 5 years 300,000 The plant is expected to be useful for 8 years. At the end of this time, it will cost $180,000 to dismantle the plant and $140,000 to restore the site to its original state and use. Trade discount applicable to the purchase of the plant was 15% on the list price. Niasha Stores had made an error in purchasing electrical inputs amounting to $20,000. This cost was included in the above figure. In order to get the plant into the country Niasha Stores was charged 20% import duties on the basic list price. Niasha…
Thanks to acquisition of a key patent, your company now has exclusive production rights for barkelgassers (BGs) in North America. Production facilities for 210,000 BGs per year will require a $25.2 million immediate capital expenditure. Production costs are estimated at $67 per BG. The BG marketing manager is confident that all 210,000 units can be sold for $102 per unit (in real terms) until the patent runs out five years hence. After that, the marketing manager hasn't a clue about what the selling price will be. Assume the real cost of capital is 10%. To keep things simple, also make the following assumptions: • The technology for making BGs will not change. Capital and production costs will stay the same in real terms. Competitors know the technology and can enter as soon as the patent expires, that is, they can construct new plants in year 5 and start selling BGs in year 6. If your company invests immediately, full production begins after 12 months, that is, in year 1. (Assume it…

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