Sunk costs $ A business purchased a delivery truck 5 years ago at a cost of $45,000. It is now planning to replace that truck with a newer one, which would cost $55,000. The old truck has a trade-in value of approximately $13,500. (a1) How much of these truck costs represent sunk costs? 2
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- klp.2Delaney Company is considering replacing equipment which originally cost $508,000 and which has $355,600 accumulated depreciation to date. A new machine will cost $727,000. What is the sunk cost in this situation? a.$152,400 b.$574,600 c.$508,000 d.$121,920vvk.3 You are evaluating two different milling machines to replace your current aging machine. Machine A costs $236,244, has a three-year life, and has pretax operating costs of $67,855 per year. Machine B costs $417,560, has a five-year life, and has pretax operating costs of $32,660 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $35,626. Your tax rate is 34 % and your discount rate is 10 %. What is the EAC for Machine A?
- Saved ework i Howell Petroleum is considering a new project that complements its existing business. The machine required for the project costs $3.93 million. The marketing department predicts that sales related to the project will be $2.63 million per year for the next four years, after which the market will cease to exist. The machine will be depreciated down to zero over its four-year economic life using the straight-line method. Cost of goods sold and operating expenses related to the project are predicted to be 30 percent of sales. The company also needs to add net working capital of $280,000 immediately. The additional net working capital will be recovered in full at the end of the project's life. The corporate tax rate is 23 percent. The required rate of return is 13 percent. What is the NPV for this project? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) NPVProvide answer in table format Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $43,000 and a remaining useful life of five years, at which time its salvage value will be zero. It has a current market value of $53,000. Variable manufacturing costs are $33,900 per year for this machine. Information on two alternative replacement machines follows. Alternative A Alternative B Cost $ 120,000 $ 119,000 Variable manufacturing costs per year 22,500 10,300 Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase?GKD Construction purchased a truck 6 years ago at a cost of $71600. Because the old truck required an overhaul of $4100 last year, and repairs of $2500 are needed in the current year, the company is now planning to purchase a new truck to replace the old one. The old truck has a trade-in value of $5400. The cost of the new truck is $82400. What amount of these costs represent sunk costs? $83600 O $71600 $81100 O $75700 SUP
- A9Hi please give step by step instructions to figure out the problem and give me an answer to see if I'm right... Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $601,200 and has $352,900 of accumulated depreciation to date, with a new machine that costs $483,900. The old machine could be sold for $64,300. The annual variable production costs associated with the old machine are estimated to be $156,100 per year for eight years. The annual variable production costs for the new machine are estimated to be $101,700 per year for eight years. a. Prepare a differential analysis dated October 3, to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. If an amount is zero, enter zero "0". Use a minus sign to indicate a loss. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) October 3 Continue with Old Machine (Alternative 1) Replace Old…mn.3