You invested on a special pizza oven for $250,000. This commercial oven is depreciated over a 6-year period, and it is expected to have a $4,000 estimated market value at the end of the 6 years. Using the SOYD method, what is the book value in year 4? a) Between $45,200 and $45,500 b) Between $38,700 and $40,000 c) Between $25,200 and $25,500

You invested on a special pizza oven for $250,000. This commercial oven is depreciated over a 6-year period, and it is expected to have a $4,000 estimated market value at the end of the 6 years. Using the SOYD method, what is the book value in year 4? a) Between $45,200 and $45,500 b) Between $38,700 and $40,000 c) Between $25,200 and $25,500

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

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.

Question

You invested on a special pizza oven for $250,000. This commercial oven is
depreciated over a 6-year period, and it is expected to have a $4,000 estimated
market value at the end of the 6 years. Using the SOYD method, what is the book
value in year 4?
a) Between $45,200 and $45,500
b) Between $38,700 and $40,000
c) Between $25,200 and $25,500
d) None of the answers are correct
e) Between $28,700 and $29,000
f) Between $35,200 and $35,500

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You invested on a special pizza oven for $250,000. This commercial oven is depreciated over a 6-year period, and it is expected to have a $4,000 estimated market value at the end of the 6 years. Using the SOYD method, what is the book value in year 4? a) Between $35,200 and $35,500 O b) Between $28,700 and $29,000 c) None of the answers are correct d) Between $45,200 and $45,50O e) Between $25,200 and $25,500 f) Between $38,700 and $40,000
A manufacturing company plans to buy a new piece of equipment for $70,000 which is expected to last 10 years and will have a salvage value of $10,000. The new equipment will require an overhaul at the end of year 5 at a cost of $21,000. If purchased, the new equipment will allow the company to generate new revenues of $12,000 at the end of each year. The company uses an interest rate of 8%. What is the Present Worth of the project?
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