What is the capitalized cost of a structure that will require construction cost of P1,000,000 immediately and P800,00 each year for the next 4 years and annual year –end maintenance of P36,000 plus the expenditure of P200,000 an the end of each 10-year period for replacement? Assume 12% interest rate.

Q: Suppose that an income producing property is expected to yield cash flows for the owner of $10,000…

A: Present value is the current value of a future sum of money discounted using a specified rate of…

Q: A dam will have a first cost of P250,000,000, an annual maintenance cost of P1,250,000 and minor…

A: A capitalized cost seems to be a cost incurred as a consequence of the acquisition of a fixed asset…

Q: A TV is costs P90,000. Its estimated scrap value is P10,000 after 8 years. Solve for the constant…

A: Depreciation is decrease in the value of fixed asset due to wear and tear, and passage of time.

Q: Expenses for water treatment plant are expected to be $220,000 now, $110,000 in year one, and…

A: Annualised cost is cost of current year and interest cost of perpetual cost.

Q: Determine Annual worth values

A: Annual worth (AW) method is for evaluating the alternatives or investment proposals. It is the…

Q: What is the capitalized cost of a calendering machine that costs ₱1231,000 upon purchase, requires…

A: Initial cost (X) = P 1231000 Annual cost (A) = P 412000 Replacement cost (R) = P 89000 every 5 years…

Q: ve purchased a machine worth P1,564,748.00. And it needs maintenance at the end of every 6 months…

A: Present value of the money can be found by the interest rate and period given by using the formula.

Q: A project generates same amount of revenue annually for 5 years, then its value is OMR, If the net…

A: The present value method is used to evaluate the different levels of investment projects. With the…

Q: What is the capital recovery (CR) cost of the project? Assume Cash Flow First cost, S Annual cost, S…

A: In this we need to calculate the capital recovery cost of project.

Q: The DPWH expects the cost of maintenance for a particular piece of heavy equipment to be P 50,000 in…

A: Present worth (PW) is a sum of PV of all the cashflows. Discounting is a technique which is used to…

Q: Determine the capitalized cost of an alternative that has a first cost of $55,000 an annual…

A: First cost = $ 55000 Annual cost = $ 12000 Cost every 5 years = $ 20,000 Annual interest rate = 11%

Q: An engineering project has an investment amount of $129548 with an annual net profit of $53077 for 4…

A: Investment = $ 129548 Annual net profit = $ 53077 Period = 4 Years Interest rate = 15% Inflation…

Q: An engineering project has an investment amount of $129909 with an annual net profit of $53373 for 6…

A: The time value of money is the idea that the value of money received today will be more worthy than…

Q: 3% compounded annually, what was the equivalent uniform annual cost for the 12-year period? Include…

A: An item of expenditure on a capital asset that brings back the asset to its working position is…

Q: Whats the paybck period & discounted payback period for a project with costof 2OO,OOO that generates…

A: for payback period there is not need to discount the cash flows Total cash in first 2 years = 30,000…

Q: Using the ERR method and a 17% MARR, determine the acceptability of a 10-year manufacturing project…

A: MARR = 17℅ REINVESTMENT RATE = 14℅ Year Time to Maturity Outflows Inflows 0 10 2,800,000   1…

Q: A machine has a first cost of P50,000 with interest rate of 10% annually. Expected salvage value…

A: Depreciation is the total loss in value of an asset over the life of the asset. The value of asset…

Q: A research laboratory which requires P5M for original construction; P100k at the end of every year…

A: Original construction cost =5,000,000 Annual operating cost from year 1 to 6 = 100,000 Annual…

Q: An engineering project has an investment amount of $129011 with an annual net profit of $52364 for 5…

A: Investment = $ 129011 Annual net profit = $ 52,364 Period = 5  Years Interest rate = 15% Inflation…

Q: at the end of every 6 months starting 5 years after its purchased d. maintenance will be needed for…

A: In this we need to convert quarterly interest into semiannual interest rate and find out the payment…

Q: The maintenance costs of a new boiler are estimated as follows: P 600 per year for the first 3…

A: As per question , we are provided : Future value of all maintenance = P20000 Compounding rate = 6%…

Q: A// A civil engineer wants to invest $ 72000 in a new loader, if the income from temporary leasing…

A: Given information: Investment amount : $72,000 Expected income : $14,000 Interest rate : 14%

Q: A project is offered which requires an outlay of £6000.  Returns at the end of years 1 to 5…

A: NPV refers to net present value. It is computed as the difference between the present value of…

Q: What is the capitalized cost of $60,000 in year 0, $150,000 in year 2 and a uniform annual amount of…

A: year 0 = 60000 Year 2 = 150000 Yera 5 = 50000 per year forever.

Q: Year 1, $10,000; Year 2, $50,000; and Year 3, $100,000. At an annual interest rate of 3 percent,…

A: Net present value is one of the concept used in capital budgeting. Under this, present value of cash…

Q: From the given values below, which machine should be selected using (a) Present worth Method and (b)…

A: Present Worth: It is the present value of the annual cash flows and the cost of the project…

Q: A TV is costs P90,000. Its estimated scrap value is P10,000 after 8 years. Solve for the constant…

A: The following calculations are done for the computation of constant depreciation.

Q: What is the payback period at an interest rate of 10% per year for an asset with initial cost of $…

A: The capital budgeting process is a vital process for a corporation or an individual and helps in…

Q: Let the initial cost of a certain device be $5000 and the operating cost in each year be $1000…

A: The question is related to Equivalent Annual Cost. The Equivalent Annual cost is calculated with the…

Q: $19,00O. This project would result In adoditional annual revenues of $6,000 for the next 5 years.…

A: Incremental Cost An incremental cost or differential cost is a business planning analysis that looks…

Q: A building is to be paid indefinitely at the rate of 6%. The building's price is P1M if paid in…

A: SOLUTION- Compounding is done by the lenders when they provide interest on amount which includes…

Q: An asset is purchased for P120,000.  It is expected to provide an additional P28,000 of annual net…

A: Concept. NPV. Net present value is arrived at by deducting initial investment from present value of…

Q: What is the capitalized cost of the project with interest rate 10% per year compounded monthly? The…

A: Present value of annuity is the current value of the future payments that are calculated using the…

Q: crete road requires no upkeep until the end of 3 years when P54, 000 will be needed for repairs.…

A: The annual cost of owning, operating, and maintaining property for the rest of its life is known as…

Q: Two alternatives are being considered for installation.  Which should be selected based on an…

A: Under Capital budgeting decision, when the life of alternative projects is not same, equivalent…

Q: Find the capitalized cost of a present cost of P800,000, annual costs of P55,000, and periodic costs…

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: A constructed bridge requires no upkeep until the end of 2 years when P60,000 will be needed for…

A:

Q: An engineering project has an investment amount of $126379 with an annual net profit of $53949 for 6…

A: The PV of a project refers to the value of its cash flows after they have been discounted to the…

Q: A project has a first cost of $16,999with a life of 10 years and a salvage value of $2,500. If the…

A: Here, First cost   $ 16,999.00 Salvage value  $2,500.00 Time period (NPER) 10.00 MARR…

Q: What is the NPV of a project that costs $100,000 provides $23,000 in cash flows annually for 6…

A: NPV is net present value which is the difference between the present value of cash flow and initial…

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.