A building has a salvage value of 1 million after 50 years. Annual depreciation is 2 million. Using straight line method, what is the book value after 25 years? Draw your cashflow diagram.
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- Using the information above, compute the following (round all answers to 1 decimal place): 1. Calculate the Cash Payback Period 2. Calculate the Net Present Value 3. Compute the NPV of another similar building with a cost of $300,000, with 10-year life, salvage value of $20,000, which can generate $65,000 in annual cash flows, compute the profitability index of the two buildings. 4. Compute the Profitability Index of both buildings and state which building is a better investment and why? 5. Compute the Annual Rate of Return, assuming the company uses Straight-Line depreciation 6. The company accepts investments withCash Payback period ofless than the half of the useful life, Positive NPV, and an Annual Rate of Return greater than 25%. Should the investment be accepted? Yes or No, and explain why for each method usedAn equipment cost P60,000 today and its salvage value is P20,000 after 6 years . Calculate its depreciation at year 1 with 3.83% interest rate.Use Sinking Fund Method NOTE: Please Solve and explain! and indicate your final answer!Please determine the present value of the project for a given cash flow indicated below using the present value method and find the correct answer given below. Economic life :4 years Initial investment :150,000 TL Annual saving for each year :20,000 Salvage value :Zero Discount ratio :10%
- Suppose you purchase a tangible asset with a book value of $700,000. The salvage value is $ 100,000. The useful life of the asset is 30 years. How much accumulated depreciation will there be (assume that you're using the "straight line" amortization method) after 10 years?Please determine the present value of the total cost of the project for a given cash flow indicated below using the present value method and find the correct answer given below. Economic life :4 years Initial investment :150,000 TL Annual saving for each year :20,000 Salvage value :Zero Discount ratio :10% Maintenance cost :30,000A firm is considering an investment in new equipment that has the following information. Purchase Cost: $132,793 Salvage Value in five years time: $18,337 Useful life is 5 years and depreciation is determined using the straightline method. Expected increased annual cash flows are $52,651 What is the payback period in years? Calculate to 2 decimal places
- If B = $400,000, n = 6 years, and S is estimated at 15% of B for a new pavement recycling machine, use the SYD method to determine (a) the book value after 3 years, and (b) the rate of depreciation and the depreciation amount in year 4.A company purchases an asset for P10,000 and plans to keep it for 20 years. If the salvage value is zero at the end of 20th year, what is the depreciation in the 3rd year? Use SYD method. With Cash flow diagramIf an asset costs $65,000 and is expected to have a $5,000 salvage value at the end of its ten-year life, and generates annual net cash inflows of $5,000 each year, the cash payback period is _______________ Show solution
- The following proforma shows unleveraged cash flows for a property if an investor were to purchase it today and resell it at the end of the third year: (Show answer in Excel) What is the present value of the each of the discounted cash flows from Year 1, Year 2, and Year 3, using a discount rate of 8.75% (hint: calculate each on separately)? What is the Net Present Value of this investment?A machine has a first cost of P50,000 with interest rate of 10% annually. Expected salvage value after 10 years is P5,000. Find the total depreciation after 9 years using sinking fund method.A machine has a first cost of P400,000 and a salvage value of P46,000 17 years from now. If the interest is 10%. Find the annual depreciation(P) using sinking fund method of depreciation.
