The CV Company has just purchased $75,000,000 of plant and equipment that has an estimated useful life of 20 years. The expected salvage value at the end of 20 years is $7,500,000. What will the book value of this purchase (excluding all other plant and equipment) be after its fifth year of use?
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The CV Company has just purchased $75,000,000 of plant and equipment that has an estimated useful life of 20 years. The expected salvage value at the end of 20 years is $7,500,000. What will the book value of this purchase (excluding all other plant and equipment) be after its fifth year of use?
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- Suppose you purchase a tangible asset with a book value of $700,000. The salvage value is $ 100,000. The useful life of the asset is 30 years. How much accumulated depreciation will there be (assume that you're using the "straight line" amortization method) after 10 years?A company is thinking when to replace its old machine. It has two choices: replace the old machine now, or replace it at the end of seven years. Currently, the old machine has a salvage value of $3 million and book value of $1.5 million. If it is not sold, it will require maintenance costs of $770,000 at the end of the year over the nextsix years. The depreciation expense for the machine is $300,000 per year. At the end of six years, the machine will have a salvage value of only $100,000 and a book value of $0. If the company replaces the old machine now, the new machine will cost $4.9 million and will require maintenance costs of $320,000 at the end of each year during its six years economic life. At the end of six years, the new machine will have a salvage value of $900,000. It willbe fully depreciated using the straight-line method. If the company replaces the old machine in six years, a new machine will cost $3.5 million. The company will need to purchase this machine regardless of…An asset is considering the purchase of a new equipment. This equipment will cost $100,000 and will be depreciated using an MACRS GDS recovery period of 7 years. The equipment is expected to have a market value of $40,000 at the end of its estimated 8-year life. What is the depreciation amount on the second year? What is the Book Value at the end of the 3rd year? Assume that the asset will be disposed of in year 3.
- A company can buy a machine that is expected to have a three-year life and a $30,000 salvage value. The machine will cost $1,800,000 and is expected to produce a $200,000 annual income to be received at the end of each year. Annual depreciation expense is $590,000 per year. If a table of present values of $1 at 12% shows values of 0.8929 for one year, 0.7972 for two years, and 0.7118 for three years, what is the net present value of the cash flows from the investment, discounted at 12% ? Multiple Choice $118.855 $583,676 $629,788 GYork Steel buys a new press brake for $800,000. It is expected to last twenty years and have a salvage value of $100,000. Using the declining balance method, what rate of depreciation will produce a book value after 20 years that will equal the salvage value?the first cost of a machine is 50,000 and if has a depreciation of 4,500 per year. if the salvage value at the end of 10 years is 5000, the book value at the end of 5 years is?
- What will be the assets annual depreciation?Wildhorse Manufacturing purchases equipment with an expected life of 10 years for $49500. The equipment has an estimated salvage value of $2000. Wildhorse expects the new equipment to generate annual cost savings of $8000. What is the payback period of the equipment? O 5.94 years O 6.19 years O 6.44 years O 10.00 yearsA machine costs $210,000, has a $14,000 salvage value, is expected to last ten years, and will generate an after-tax income of $43,000 per year after straight-line depreciation. Compute the payback period.
- The Zhang Equipment Company’s machine was purchased 5 years ago for $55,000. It had an expected life of 10 years when it was bought, and its remaining depreciation is $5,500 per year for each year of its remaining life. As older machine are robust and useful machine, this one can be sold for $20,000 at the end of its useful life. A new high-efficiency, digital-controlled machine can be purchased for $120,000, including installation costs. During its 5-year life, it will reduce cash operating expenses by $30,000 per year. Sales revenue will not be affected. At the end of its useful life, the highefficiency machine is estimated to be sold at $10,000. MACRS depreciation will be used, and the machine will be depreciated over its 5-year property class life. The old machine can be sold today for $35,000. The firm’s tax rate is 25%, and the appropriate cost of capital is 13%. - What are the incremental cash flows that will occur at the end of Years 1 through 5?The Zhang Equipment Company’s machine was purchased 5 years ago for $55,000. It had an expected life of 10 years when it was bought, and its remaining depreciation is $5,500 per year for each year of its remaining life. As older machine are robust and useful machine, this one can be sold for $20,000 at the end of its useful life. A new high-efficiency, digital-controlled machine can be purchased for $120,000, including installation costs. During its 5-year life, it will reduce cash operating expenses by $30,000 per year. Sales revenue will not be affected. At the end of its useful life, the highefficiency machine is estimated to be sold at $10,000. MACRS depreciation will be used, and the machine will be depreciated over its 5-year property class life. The old machine can be sold today for $35,000. The firm’s tax rate is 25%, and the appropriate cost of capital is 13%. - What is the after-tax salvage value of the new machine at the end of the project?Kent Corp. is considering the purchase of a new piece of equipment, which would have an initial cost of $509,000, a 7-year life, and $150,000 salvage value. The increase in cash flow each year of the equipment's life would be as follows: Year 1 $ 102,000 Year 2 $ 94,000 Year 3 $ 92,000 Year 4 $ 81,000 Year 5 $ 78,000 Year 6 $ 73,000 Year 7 $ 67,000 What is the payback period? Multiple Choice 6.06 years 5.39 years 5.85 years 5.88 years