Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
expand_more
expand_more
format_list_bulleted
Question
Chapter 7, Problem 45P
To determine
Select the alternative based on the ATCF.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Determine the rate of depreciation, the total depreciation, the total depreciation up to the end of the 8th year and the book value at the end of 8 years for an asset that costs P 15,000 new and has an estimated scrap value of P 2,000 at the end of 10 years by (a) Declining balance method (b) Double Declining balance method
If a certain equipment has a book value P4,863.00 during its 7th year of operation. If the annual depreciation is equal to P802.00 and it has a salvage value of P861.00, using the SLM, what is the recovery period in years?
If an asset has a cost of 6,000, a salvage value of 1,500, and the annual straight line method depreciation expense is 1,125, what is the useful life of the asset?
Chapter 7 Solutions
Engineering Economy
Ch. 7 - How are depreciation deductions different from...Ch. 7 - Prob. 2PCh. 7 - Explain the difference between real and personal...Ch. 7 - Prob. 4PCh. 7 - Prob. 5PCh. 7 - Prob. 6PCh. 7 - Prob. 7PCh. 7 - Prob. 8PCh. 7 - Prob. 9PCh. 7 - Prob. 10P
Ch. 7 - Prob. 11PCh. 7 - Prob. 12PCh. 7 - Prob. 13PCh. 7 - Prob. 14PCh. 7 - A manufacturer of aerospace products purchased...Ch. 7 - Prob. 16PCh. 7 - Prob. 17PCh. 7 - Prob. 18PCh. 7 - Prob. 19PCh. 7 - Prob. 20PCh. 7 - Prob. 21PCh. 7 - Prob. 22PCh. 7 - Prob. 23PCh. 7 - Prob. 24PCh. 7 - Prob. 25PCh. 7 - Prob. 26PCh. 7 - Prob. 27PCh. 7 - Prob. 28PCh. 7 - Prob. 29PCh. 7 - Prob. 30PCh. 7 - Prob. 31PCh. 7 - Prob. 32PCh. 7 - Prob. 33PCh. 7 - Prob. 34PCh. 7 - Prob. 35PCh. 7 - Prob. 36PCh. 7 - Prob. 37PCh. 7 - Prob. 38PCh. 7 - Prob. 39PCh. 7 - Prob. 40PCh. 7 - Prob. 41PCh. 7 - Prob. 42PCh. 7 - Prob. 43PCh. 7 - Prob. 44PCh. 7 - Prob. 45PCh. 7 - Prob. 46PCh. 7 - Prob. 47PCh. 7 - Prob. 48PCh. 7 - Prob. 49PCh. 7 - Prob. 50PCh. 7 - Prob. 51PCh. 7 - Prob. 52PCh. 7 - Determine the after-tax yield (i.e., IRR on the...Ch. 7 - A 529-state-approved Individual Retirement Account...Ch. 7 - Prob. 55PCh. 7 - Prob. 56PCh. 7 - Prob. 57SECh. 7 - Prob. 58SECh. 7 - Prob. 59SECh. 7 - Prob. 60SECh. 7 - Prob. 61FECh. 7 - Prob. 62FECh. 7 - Prob. 63FECh. 7 - Prob. 64FECh. 7 - Prob. 65FECh. 7 - Prob. 66FECh. 7 - Prob. 67FECh. 7 - Prob. 68FECh. 7 - Prob. 69FECh. 7 - Prob. 70FECh. 7 - Prob. 71FECh. 7 - Prob. 72FECh. 7 - Prob. 73FECh. 7 - Prob. 74FECh. 7 - Prob. 75FECh. 7 - If the federal income tax rate is 35% and the...Ch. 7 - Prob. 77FECh. 7 - Prob. 78FECh. 7 - Prob. 79FECh. 7 - Prob. 80FECh. 7 - Prob. 81FECh. 7 - Prob. 82FECh. 7 - Prob. 83FECh. 7 - Prob. 84FE
Knowledge Booster
Similar questions
- What is the depreciation deduction dk and book value BVk, for 0 ≤ k ≤ 5, using each of the following methods, for an asset that costs $42,000 and has an estimated MV of $7000 at the end of its 5-year useful life? Assume its ADS-MACRS recovery period is 5 years. (a) DDB Method (b) SYD Method (c) Sinking Fund Method with I =10% (d) ADS (MACRS). Tabulate your answers as follows: Provide the formula and sample calculations for each column.arrow_forwardThe first cost of an oxygen generating machine is P2,500,000 and has an economic life of 15 years and a salvage value of P150,000. The cost of money is 12% per year. Compute the total depreciation after 7 years using Double Declining Balance Method.arrow_forwardA special-purpose digitizing system just acquired by Bzybee Consultants has B = $50,000 and a 4-year recovery period. (a) What is the accumulated depreciation after year 3 if the salvage value of the system is $5000? (b) What is the total amount of depreciation remaining?arrow_forward
- ⦁ ABC Company has a product that sells for $400 per unit and its variable cost per unit is $260. Company’s fixed cost is $840,000. Required: ⦁ If the company desire to make a pre-tax profit of $70,000, what will be itsNew breakeven point in dollars? Show computationarrow_forwardA piece of equipment will be DDB depreciated over an expected life of 12 years. There is a first cost of $25,000 and an estimated salvage of $2500. The depreciation charge for year 1 is: Less than $4000 O Between $4000-$4200 Between $4200-$4400 O Higher than $4400arrow_forwardWhat is the expected after-tax cash flow from selling a piece of equipment if TwoPlus purchases the equipment today for $162,000.00, the tax rate is 20.10 percent, the equipment is sold in 4 years for $36,600.00, and MACRS depreciation is used where the depreciation rates in years 1, 2, 3, 4, and 5 are 20%, 32%, 19%, 12%, and 10%, respectively? ос $27,026.46 (plus or minus $10) $34,778.94 (plus or minus $10) $57,897.96 (plus or minus $10) $31,522.74 (plus or minus $10) None of the above is within $10 of the correct answerarrow_forward
- Engineering Economics: Depreciation Methodsarrow_forwardThe Shell Corp. owns a piece of petroleum drilling equipment that costs $200,000 and will be depreciated by DDB depreciation with B=$200,000, N=10 years, S=$0. There is a combined 50% tax rate. Shell will lease the equipment to others each year and receive $80,000 per year. At the end of 3years, the firm will sell the equipment for $100,000. If the firm requires a 10% after-tax rate of return, what is the PW of the investment?arrow_forwardThe first cost of a machine is P1,800,000 with a salvage value of P300,000 at the end of its life of 5 years. Determine the total depreciation after 3 years. Constant Percentage Method ans:P1,185,769.76arrow_forward
- ABC Corporation makes it a policy that for any new equipment purchased, the annual depreciation cost should not exceed 7% of the first cost at any time with no salvage value. Determine the length of service life necessary if the depreciation used is the SYD method. Draw the cashflow if necessaryarrow_forwardA man bought a machine for $ 535705 six years ago. It has a salvage value of $ 36957 four years from now. He sold it now for $ 46847. What is the sunk cost or the value of the machine that the man lost if the depreciation method used is a Sum of the Years' Digit method?arrow_forwardYou must evaluate the purchase of a spectrometer for the R&D department. The base price is $140,000, and it would cost another $30,000 to modify the equipment for special use by the firm. The equipment falls into the MACRS 4 year class and would be sold after 4 years for $60,000. The applicable depreciation rates are 33%, 45%, 15% and 7%. The equipment would require an $8000 increase in net operating working capital. The project would have no effect on revenues, but it should save the firm $50,000 per year before-tax labour costs. The firm's marginal federal-plus state tax rate is 40%. QUESTION:W Whatare the project's annual cash flows in Years 1, 2,3 and 4?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning