Use the following to answer questions 93-95: to be rebuilt or replaced. The following information has been gathered relative to this (Ignore income taxes in this problem.) Carlson Manufacturing has some equipment that decision: Purchase cost new Remaining book value. Cost to rebuild now. Major maintenance at the end of 3 years Annual cash operating costs.. Salvage value at the end of 5 years. Salvage value now.... New Present Equipment Equipment $48,000 A) $(48,000) B) $(39,000) C) $(41,000) D) $(37,000) $50,000 $30,000 $25,000 $8,000 $10,000 A) $(28,840) B) $(19,160) C) $(14,420) D) $(36,050) $3,000 $9,000 $5,000 $8,000 $7,000 Carlson uses the total cost approach and a discount rate of 12%. Regardless of which options chosen, rebuild or replace, at the end of five years Carlson Manufacturing plans to close its domestic manufacturing operations and to move these operations to foreign countries. Tada 93. If the new equipment is purchased, the present value of all cash flows that occur now is: Answer: B Level: Easy LO: 1 94. If the new equipment is purchased, the present value of the annual cash operating costs associated with this alternative is: Answer: A Level: Medium LO: 1 95. If the equipment is rebuilt, the present value of all cash flows that occur now is: A) $(55,000) B) $(25,000) C) $(16,000) D) $(23,000) Answer: B Level: Easy LO: 1
Use the following to answer questions 93-95: to be rebuilt or replaced. The following information has been gathered relative to this (Ignore income taxes in this problem.) Carlson Manufacturing has some equipment that decision: Purchase cost new Remaining book value. Cost to rebuild now. Major maintenance at the end of 3 years Annual cash operating costs.. Salvage value at the end of 5 years. Salvage value now.... New Present Equipment Equipment $48,000 A) $(48,000) B) $(39,000) C) $(41,000) D) $(37,000) $50,000 $30,000 $25,000 $8,000 $10,000 A) $(28,840) B) $(19,160) C) $(14,420) D) $(36,050) $3,000 $9,000 $5,000 $8,000 $7,000 Carlson uses the total cost approach and a discount rate of 12%. Regardless of which options chosen, rebuild or replace, at the end of five years Carlson Manufacturing plans to close its domestic manufacturing operations and to move these operations to foreign countries. Tada 93. If the new equipment is purchased, the present value of all cash flows that occur now is: Answer: B Level: Easy LO: 1 94. If the new equipment is purchased, the present value of the annual cash operating costs associated with this alternative is: Answer: A Level: Medium LO: 1 95. If the equipment is rebuilt, the present value of all cash flows that occur now is: A) $(55,000) B) $(25,000) C) $(16,000) D) $(23,000) Answer: B Level: Easy LO: 1
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Sub : Accounting
Pls answer very fast.I ll upvote. Thank You
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education