Sunset Landscaping Co. purchased equipment for $180,000 with a useful life of 6 years (straight-line depreciation). ⚫ Fixed annual cost (excluding depreciation): $45,000 ⚫ Variable cost per service: $75 • ⚫ Revenue per service: $200 ⚫ Expected customers: 750 per year What is the annual profit?
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- Max. score: 1.00 Ultra-Corporation purchased an equipment costing $300,000. The expected after-tax net income of $9,000 each year. It is predicted that the machine is expected to have a 12-year service life and a residual value $60,000. Company uses straight-lin depreciation. Compute this machine's accounting rate of return. 3% 2.5% 5% 3.75%Service Output MethodGiven:FC = 800,000.00 pesosSV = 200,000.00 pesosn = 5 yearsOutput in year 1 = 300 unitsTotal output in 5 yrs = 1000 unitsa. Depreciation per unit = ?b. Book Value at year 1= ?rap value. A machine is purchased for { 10,600. Depreciation is calculated at 8% for the first 3 reers and after that 10% per annum for the next seven years, depreciation being calculated on diminishing value. Find the value of the machine after a period of 10 years. A machine depreciates at the rate of 10% ner annum for the firot tuo 70/
- am.133.You have just bought a new pusher dozer for your equipmentfleet. Its cost is $100,000. It has an estimated servicelife of four years. Its salvage value is $12,000.a. Calculate the depreciation for the first and second yearusing the straight-line and DDB methods.b. The IIT components of ownership cost based on averageannual value are:Tax: 2%Insurance: 2%Interest: 7%What cost per hour of operation would you charge tocover IIT?provide correct answer
- A company is planning to purchase a machine that will cost P240,000, have a six-year life, and be depreciated over a six-year period with no salvage value. The company expects to sell the machine's output of 30,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the accounting rate of return for this machine? Sales Costs: P 900,000 Manufacturing P 520,000 Depreciation on machine 40,000 Selling and administrative expenses 300,000 (860,000 ) Income before taxes P 40,000 Income tax (25%) (10,000 ) Net income…Determine the hourly owning and operating cost for the third year of operation of the wheel loader described below: Purchase price: $330,000 Expected life: 4 years. Salvage value: $85,000 Tire cost: $32,000 Load Conditions: Average Operating conditions: Average Fuel Cost: $2.07/gal. Hours operating: 1500/yr. Investment rate: 15% Tax, storage rate: 10% Straight line depreciationEngineering economics problem. Help me in solutions
- KLM Company has the opportunity to purchase an asset that costs $50,000. The asset is expected to increase net income by $20,000 per year. The asset has a 5-year useful life. Depreciation expense used in computing net income amounted to $10,000 per year. Based on this information the payback period is?Quary Company is considering an investment in machinery with the following information. The company's required rate of return is 15% (PV of $1. EV of $1, PVA of $1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Initial investment $ 288,000 Useful life Materials, labor, and overhead (except depreciation) 9 years Depreciation-Machinery $ 54,000 28,800 Salvage value Expected sales per year $ 28,800 10,000 units Selling, general, and administrative expenses Selling price per unit 14,000 $ 14 a. Compute the investment's net present value. b. Using the answer from part a, is the investment's internal rate of return higher or lower than 15% ? Hint: It is not necessary to compute the IRR to answer this question. Complete this question by entering your answers in the tabs below. Required A Required B Compute the investment's net present value. Note: Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Round…Baird Rentals can purchase a van that costs $110,000; it has an expected useful life of five years and no salvage value. Baird uses straight-line depreciation. Expected revenue is $40,425 per year. Assume that depreciation is the only expense associated with this Investment. Required a. Determine the payback period. Note: Round your answer to 1 decimal place. b. Determine the unadjusted rate of return based on the average cost of the investment. Note: Round your answer to 1 decimal place. (l.e., .234 should be entered as 23.4). a. Payback period b. Unadjusted rate of return years %