Your company just purchased new device for food and beverage manufacture for $12,000. The salvage value of the equipment is anticipated to be $1200 at the end of its depreciable life. Use MACRS to determine the depreciation schedule.
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Your company just purchased new device for food and beverage manufacture for $12,000. The salvage value of the equipment is anticipated to be $1200 at the end of its
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- Freida Company is considering an asset replacement project of replacing a control device. This old control device has been fully depreciated but can be sold for $5,000. The new control device, which is more automated, will cost $42,000. The new device’s installation and shipping costs will total $16,000. The new device will be depreciated on a straight-line basis over its 2-year economic life to an estimated salvage value of $0. The actual salvage value of this device at the end of 2-year period (That is, the market value of the device at the end of 2-year period) is estimated to be $4,000. If the replacement project is accepted, Freida will require an initial working capital investment of $2,200 (that is, adding $2,200 initially to its net working capital). During the 1st year of operations, Freida expects its annual revenue to increase from $72,800 to $90,000. After the 1st year, revenues from the replacement are expected to increase at a rate of $2,800 a year for the remainder of…Daily Enterprises is purchasing a $9.6 million machine. It will cost $46,000 to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. If Daily uses straight-line depreciation, what are the depreciation expenses associated with this machine? The yearly depreciation expenses are $___________ (Round to the nearest dollar.)Pilot Plus Pens is deciding when to replace its old machine. The old machine's current salvage value is $3 million. Its current book value is $2 million. If not sold, the old machine will require maintenance costs of $500,000 at the end of the year for the next five years. Depreciation on the old machine is $400,000 per year. At the end of five years, the old machine will have a salvage value of $400,000 and a book value of $0. A replacement machine costs $4 million now and requires maintenance costs of $350,000 at the end of each year during itsfeconomic life of five years. At the end of the five years, the new machine will have a salvage value of $1,000,000. It will be fully depreciated by the straight-line method. In five years, a replacement machine will cost $5,000,000. Pilot will need to purchase this machine regardless of what choice it makes today. The corporate tax rate is 28 percent and the appropriate discount rate is 10 percent. The company is assumed to earn sufficient…
- This is my last attempt. Please answer correctly. I will rate accordinglySuper Mega Business Corporation (SMBC) is purchasing a $20 million machine. It will cost $50,000 to transport and install the machine. The machine has a depreciable life of five years. It will have no salvage value. For their financial statements, SMBC always use the straight-line depreciation method. A) What are the straight-line depreciation expenses associated with this machine in year 2 after the purchase? B) What is the machine’s depreciation tax shield in year 3 after the purchase, assuming the SMBC’s marginal tax rate is 20%? C) Assume the MACRS depreciation schedule for this type of machine runs over three years and assigns the following percentage values: 20%, 50% and 30%. What is the MACRS depreciation expense in year 2? D) Assume the company can either buy the machine in January or December of the first year. Which one will generate more MACRS depreciation in the first year and why? With explanation please.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…
- Your business buys a copy machine for $8,000 on January 1. You estimate that the copy machine will produce 350,000 copies during its useful life; its salvage value after producing the 350,000 copies is projected to be $1,000. The copy machine produced 75,200 copies in year 1 and 68,300 copies in year 2. Calculate depreciation for each of the first two years using the units-of-production method.Crane Company bought a machine on January 1, 2022. The machine cost $166000 and had an expected salvage value of $20000. The life of the machine was estimated to be 4 years. The book value of the machine at the beginning of the third year would beBenson Enterprises is deciding when to replace its old machine. The machine’s current salvagevalue is $1.2 million. Its current book value is $1 million. If not sold, the old machine will requiremaintenance costs of $420,000 at the end of the year for the next five years. Depreciation on theold machine is $200,000 per year. At the end of five years, it will have a salvage value of $220,000.A replacement machine costs $3.5 million now and requires maintenance costs of $160,000 at theend of each year during its economic life of five years. At the end of five years, the new machinewill have a salvage value of $540,000. It will be fully depreciated using the three-year MACRSschedule. In five years a replacement machine will cost $4,000,000. Pilot will need to purchasethis machine regardless of what choice it makes today. The corporate tax is 35 percent and theappropriate discount rate is 10 percent. The company is assumed to earn sufficient revenues togenerate tax shields from…
- Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate: At time of purchase, annual depreciation was ___ Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the asset’s life: Original cost Depreciation previously taken Book value at beginning of year five Salvage value Revised remaining depreciable cost Revised remaining useful life 15 years Revised annual depreciation Create the depreciation expense journal entry for year five: DR CRSolve using Straight Line Depreciation: Initial cost for buying and installing the machine in manufacturing system is $ 16000 and useful life of that is 4 years. After 4 years the salvage value of the machine is $ 4000. Find book value and depreciation value?1.Maiden Corp is considering the purchase of a new CNC machine tool for use in their research lab. The machine they are thinking about costs $750,000 and has an expected life of five years. Please calculate their depreciation schedule using MACRS. What is the present worth of the depreciation?