Ten years ago, a contractor was able to purchase a crane whose capacity is 2000 tons costing ₱125 per ton. The life was estimated to be 15 years with a salvage value of 10% of the cost. At present abandoning the old crane in favor, a modern model is being considered. A market had been found for the old crane at ₱ 80,000. If the depreciation has been figured on a straight-line basis, what is the difference between the depreciation book value of the old crane and its sale value?

Q: A company is considering to acquire a new machinery. It costs ₱90,000 with transportation costs of…

A: a) Calculation of depreciation per annum :       Calculation of Machinery cost = 90000 + 6000 + 9000…

Q: What is the sunk cost if the depreciation method is a straight-line method?

A: Sunk cost costs are those costs or expenses that already been spent and cannot be recovered.…

Q: The Erley Equipment Company purchased a machine 5 years ago at a cost of $100,000. The machine had…

A: Capital budgeting techniques helps a company to select among the alternative available investment to…

Q: A certain corn mill decided to sell its old engine which has been used for 5 years costing P7,200…

A: SOLUTION DEPRECIATION REPRESENTS HOW MUCH OF AN ASSETS VALUE HAS BEEN USED.

Q: An asset was purchased six years ago at a cost of ₱7,000. It was estimated to have a useful life of…

A: Sunk cost is the expense which had been incurred but not recovered yet. Cost of equipment or lease…

Q: An asset was purchased six years ago at a cost of P70,000. It was estimated to have a useful life…

A: A depreciation is an expense incurred for usage of fixed tangible assets for revenue generation. It…

Q: Eight years ago, a company purchased an injection molding machine at $40,000. It has been…

A: Information given in the case: Cost of machine = $40,000 Life = 12 years Salvage value at the end of…

Q: Five years ago, a piece of equipment was purchased at a cost of $170,000, with a salvage value of…

A: Net present value is a technique to evaluate different investment proposals and select the best one.…

Q: A machine purchased three years ago for $311,000 has a current book value using straight-line…

A: Machinery costs can be classified into two domains Annual ownership costs Operating Costs Annual…

Q: A solar panel unit has been purchased by a company for electricity back up. The solar unit costs…

A: depreciation is decrease in monetory value of the asset due to wear and tear of the asset. annual…

Q: The Erley Equipment Company purchased a machine 5 years ago at a cost of $100,000. The machine had…

A: Given  Old machine purchase price - $100,000 Life -10 years - remaining life 5 years Salvage value…

Q: The initial cost of a paint sand mill, including its installation, is P800,000. The BIR approved…

A: Initial cost = P 800,000 Salvage value = P 50,000 Dismantling cost = P 15000 Life = 10 Years

Q: Benson Enterprises is deciding when to replace its old machine. The machine’s current salvage value…

A: The question is based on the concept of project valuation.

Q: Sheridan Inc. wants to purchase a new machine for $44,300, excluding $1,500 of installation costs.…

A: Here, Cost of new machine = $44,300 Installation costs = $1,500 Salvage value of old machine = 2,200…

Q: LLED has purchased a new chip making machine for $1,500,000 with a salvage value of $100,000 in 10…

A: Straight-line depreciation per year=Cost of asset-Salvage valueUseful life

Q: Crane Inc. wants to purchase a new machine for $40,700, excluding $1,500 of installation costs. The…

A: The objective of the question is to evaluate the financial feasibility of purchasing a new machine…

Q: Ten years ago, a contractor was able to purchase a crane whose capacity is 2000 tons costing P125…

A: Straight line basis is a method of calculating depreciation and amortization, the process of…

Q: A construction company is considering changing its depreciation from the MACRS method to the…

A: Depreciation refers to an accounting method or system of allocating the cost of a tangible or…

Q: An injection moulding machine was purchased 2 years ago. The machine has been depreciated on a…

A: The difference between the current value of cash inflows and outflow of cash over a period of time…

Q: A chemical mixer was purchased 8 years ago for $100,000. If retained, it will require an investment…

A: Given: MARR = 10%. EUAC is nothing but equivalent uniform annual cost. This cost is nothing but the…

Q: ABS Corporation is considering an investment in new machinery and is gathering data about the…

A: Net present value is a fundamental financial metric used to calculate the profitability of an…

Q: A machine was purchased two years ago for 60000 TL. At that time, it was assumed that the machine…

A: Replacement analysis is a financial evaluation process used by businesses to assess whether it is…

Q: An automated assembly robot that cost $300,000 has a recovery period of five years with an expected…

A: Depreciation recapture- It is a tax provision that powers the IRS to collect taxes on any profitable…

Q: Freida Company is considering an asset replacement project of replacing a control device. This old…

A: Cost of new device = $42000 Cost of shipping & installation for new device = $16000 Sale…

Q: estimated life of 15 years, estimated annual operating cost 20% huch must the old engine be sold if…

A: Depreciation is a way of writing off the cost of the machine incurred over the number of years it…

Q: Daily Enterprises is purchasing a $9.6 million machine. It will cost $46,000 to transport and…

A: Given: Cost of asset = $9,600,000 Cost of installation = $46,000 Life = 5 years

Q: LLED has purchased a new chip making machine for $1,500,000 with a salvage value of $100,000 in 10…

A: Straight-line method – In straight-line method, the depreciable cost of the asset is divided by the…

Q: A machine purchased three years ago for $309,000 has a current book value using straight-line…

A: First of all, the cost of old machinery is sunk cost and no more relevant for our calculations. The…

Q: A machine purchased three years ago for $318,000 has a current book value using straight-line…

A: Machinery costs can be classified into two domainsAnnual ownership costsOperating CostsAnnual Costs…

Q: On January 1, 2003, Superior Landscaping Company paid P17,000 to buy a stump grinder. If Superior…

A: Depreciation is the gradual conversion of the cost of a  fixed asset into expense. It is a charge…

Q: A solar panel unit has been purchased by a company for electricity back up. The solar unit costs…

A: Depreciation expense refers to the fall in the value of the asset due to passage of time, wear and…

Q: Benson Enterprises is deciding when to replace its old machine. The machine’s current salvage value…

A: Given: Benson Enterprises is deciding when to replace its old machine. In five years a replacement…

Q: A civil engineer who owns his own design/build/operate company purchased a small crane 3 years go at…

A: Replacement analysis: It is the decision related to the replacement or sale of an existing asset to…

Q: An asset was purchased six years ago at a cost of P7,000. It was estimated to have a useful life of…

A: Sunk cost is the expense which had been incurred but not recovered yet. Cost of equipment or lease…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.