A company used a type of truck which cost P2 million with life of 3 ears and final salvage value of P320,000. How much could the company afford to pay for another type of tuck with the same purpose whose life is 4 years with a final salvage value of P400,000. If money is worth 4%.
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- 5. A car company rental is considering purchasing one type of compact car to replenish its fleet. Two- companies are offering this kind of car. Which option should a car company choose if their MARR. is 10% per year? Company A Company B Purchased Cost P 120,000 P 140,000 Maintenance Cost P 9,000 P 5,000 Salvage Value P 4,000 P 5,000 Life 3 years 3 years40. A hotel curtains on it's windows including it's rods at a total cost of P500000. These curtains will be replaced every 4 years at a cost of P400000 whilts the old curtains can be sold at Php 50000 upon replacement. Find the capitalized cost of these expenses if money is worth 4% yearly. O a. P2304555.88 O b. P2690000 O c. P2700345.56 O d. P2560537.90 O e. None of the aboveA construction company intends to build a fly-over that cosr P3,000,0000.00. The annual maintenance is P100,000.00 and the annual benefit of the motorist has been estimated to be P250,000.00 if money is worth 8% and the useful life is 50 years, find the B/C
- A firm is charged P200 per ton for hauling its raw materials by atrucking company. Fifty tons per day are hauled for 300 days a year. Itis desired to install a railway system which would bring down the costof hauling to P6.80 per ton. Maintenance cost of this is P15,000 permonth. Tax is 1.5%. Average rate if earning is 25%.a. If the company has the cash necessary for the installation, wouldyou recommend the change?b. If the company has to float P6,000,000 worth of noncallable bondsat 14% that will mature in 15 years to have the capital for the project,would you recommend the change?A company owns a 6-year-old gear hobber that has a book value of $60,000. The present market value of the hobber is $80,000. A new gear hobber can be purchased for $450,000. Using an outsider’s point of view, what is the net first cost of purchasing the new gear hobber? a. $310,000 b. $370,000 c. $390,000d. $450,000.A machine can be purchased at t=0 for $20,000. The estimated life is 15 years, with an estimated salvage value of zero at that time. The average annual operating and maintenance expenses are expected to be $5,500. If MARR =2.54%, what must the average annual revenues be in order to be indifferent between purchasing the machine and doing nothing? $7,120 $3,880 $6,969 @$7,213 $7,175
- S7.37 Tim Smunt has been asked to evaluate two machines. After some investigation, he determines that they have the costs shown in the following table. He is told to assume that: 1. The life of each machine is 3 years. 2. The company thinks it knows how to make 12% on investments no more risky than this one. 3. Labor and maintenance are paid at the end of the year. MACHINE A MACHINE B $10,000 2,000 4,000 2,000 $20,000 Original cost Labor per year Maintenance per year Salvage value 4,000 1,000 7,000 Determine, via the present value method, which machine Tim should recommend.This question is based on the following information: Sphinx Company is planning to invest in a machinery costing P 500,000 with an estimated useful life of 5 years with no salvage value. The use of this machinery will generate cash savings of P 175,000 before taxes. Income taxes are 20% each year, What is the payback reciprocal? 32% P 33% 34% 35% What is the payback period? 3.125 years 3.152 years 3.512 years 3,521 yearsUse Service-Output Method. A Machine costs ₱80,000 and an estimated life of 10 years with a salvage value of ₱5,000. Assuming that the total service of the machine is 1,497,600 hours and the number of working days per year is 260 days. What is the book value after 4 years if the machine production time a is 24 hours? Answer: BV4 = P 78,750.00Show Solution
- Your company is planning to purchase a new loader for $20,937. If the company keeps the old loader, it will have $1,959 additional maintenance cost for the first year and increases $308 each year till the eighth year. Given the company's minimum attractive rate of return (MARR) is 6%, what is the present cost of keeping the old loader? 6% 1 2 3 4 5 879 6 9 Single Payment Compound Present Amount Worth Factor Factor Find F Find P Given F Given P F/P P/F 1.060 1.124 1.191 1.262 1.338 1.419 1.504 1.594 1689 .9434 .8900 .8396 .7921 .7473 .7050 .6651 .6274 5919 Sinking Fund Factor Find A Given F A/F 1.0000 .4854 3141 .2286 .1774 .1434 .1191 1010 0870 Compound Interest Factors Uniform Payment Series Capital Recovery Factor Find A Given P A/P 1.0600 .5454 .3741 .2886 2374 2034 .1791 1610 1470 Compound Amount Factor Find F Given A F/A 1.000 2.060 3.184 4.375 5.637 6.975 8.394 9.897 11 491 Present Worth Factor Find P Given A P/A 0.943 1.833 2.673 3.465 4.212 4.917 5.582 6.210 6.802 Arithmetic…6. A contractor can buy dump trucks for P800,000.00 each(surplus) or rent them for P1,189 per truck per day. The truck has a salvage value of P100,000 at the end of its useful life of 5 years. Annual cost of maintenance is P20,000.00. If money is worth 14% per annum, determine the number of days per year a truck must be used to warrant the purchase of the truck. A. 200. B. 199 C. 145 D. 1021. Use the information below for the next two questions. Leaky Pipe Inc. is considering a new machine for its largest product line. The cash flows Lastalled Purchase Price S40, 000 Roduced Cost of Materials S 6,000 per year Labor Savings S9, 000 per year locrease in Working Capital $5, 000 (for Year 0 and I only) Depreciable Life (zero salvage value) 4 years Economic Life 8 years Required Return 12% Tax Rate 40% a . What is the NPV of this machine if it does not replace any other?. b. Suppose the machine replaces another machine with the following characteristics: Book Value of Old Machine $6.000 Market Value of Old Machine $4,000 Remaining Depreciable Life of Old Machine 6years Assume the old machine was not expected to have any salvage value and compute the NPV of the New Machine.