Suppose that you purchase a car for P 1,000,000.00. The scrap value of the car after its useful life is P 200,000.00 and the useful life of the car is 5 years. Determine the book value at the end of the third yea Use the straight-line method. O a. P520,000.00 O b. P521,000.00 O c. P530,000.00 O d. P520,100.00
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- Most businesses replace their computers every two to three years. Assume that a computer costs $2,000 and that it fully depreciates in 3 years, at which point it has no resale value and is thrown away. Suppose the computer did not fully depreciate but still had a $250 value at the time it was replaced. What is the minimum annual cash flow that a computer must generate to be worth the purchase? The minimum annual cash flow must be at least $A machine has an initial cost of P 50,000.00 and a salvage value of P 10,000.00 after 10 years. What is the book value after 5 years using straight line method? O a. P25,000.00 O b. P30,000.00 О с. P15000.00 O d. P20,000.00The cost of equipment is P 500,000.00 and the cost of installation is P 30,000.00. If the salvage value is 10% of the cost of equipment at the end of 5 years, determine the book value at the end of the fourth year. Use straight line method. O a. P146,000.00 O b. P142,000.00 O c. P146,010.00 O d. P156,000.00
- Peller machine losses 10% of its value each year. The machine costs P 2,000 originally. Find the book value at the end of 5 years. a. P1,312.20 b. P1,1180.98 c. P1,620.00 d. P1,458.00You are considering purchasing a dump truck.The truck will cost $75,000 and have operating andmaintenance costs that start at $18,000 the first yearand increases by $2,000 per year. Assume that thesalvage value at the end of five years is $22,000 andinterest rate is 12%. What is the equivalent annualcost of owning and operating the truck?12. A recapping plant is planning to acquire a new diesel engine set to replace its present unit which they run during power interruptions. The new diesel set would cost $135,000 with a five years life and zero residual value. Annual operating cost would be $150,000. On the other hand, the present generating set has a remaining life of 5 years. Its present value is $7,500 but has a zero residual value after 5 years. Annual operating costs is placed at $187,500. If MARR=10%, which is more profitable – to buy the new generator set or retain the present set? Calculate the difference in annual costs between the two alternatives. mpanu ic conridering two alternatives with regards to an eguinment which it needs The
- 6) A company is considering the purchase of a new automated assembly machine to increase its production capacity. The initial cost of the machine is $480,000. It is expected to increase the company's annual revenue by $200,000. The annual O&M costs are estimated to be $40,000. The machine's estimated salvage value at the end of its useful life of 4 years is expected be $72,000. This new machine is a MACRS- GDS 3-vear property for calculating depreciation deductions. The effective tax rate is 35%. a) For this new machine, determine the after-tax cash flow for each year of operation. (Round off values to the nearest dollar) EOY BTCF Tax 0 1 2 3 4 MACRS-GDS Deduction Taxable Income ATCF b) If the after-tax MARR is 10% per year compounded annually, compute the PW of the after-tax cash flows. Based on this PW, would you recommend the purchase of this new machine?PLEASE WRITE YOUR SOLUTION ON A PAPER, THANK YOU A Contractor imported a bulldozer for his job, paying P 350,000 to the Manufacturer. Freight andInsurance charges amounted to P 18,000; customs’ broker’s fees and arrastre services, P 8,500;taxes, permits and other expenses, P 35,000. If the contractor estimates the life of the bulldozer tobe 10 years with a salvage value of P 20,000, determine the book value at the end of 8 years, a. using the Double Declining Balance Method. b. using the Declining Balance Method. c. using the Sinking Fund Method, i = 10% d. using the Sum of the Years Method101 Use the following information to answer the question which immediately follows Y = 2,000, GT-200, Cd=400 +0.9(Y-T) - 600r, 1200-80r, L-0.5Y 500, M-5000, P-7.35, n² = 0.02 What is the value of r? Select one a 0.58 Ob. 0.45 OC 0.62 Od 0.38 13
- Mr Roque bought an equipment which cost P524,000.00. Freight and installation costs him P31,000.00 If the life of the equipment is 15 years with an estimated salvage value of P120,000. What is the book value after 8 years using SLM. O P323,000 O P244,000 9,000 O P296,000 O P325,00013,000 6. The Imperial Chemical Company is considering purchasing a chemical analysis machine worth $13,000. Although the purchase of this machine will not produce any increase in sales revenues, it will result in a reduction of labour costs. In order to operate the machine properly, it must be calibrated each year. The machine has an expected life of 6 years, after which it will have no salvage value. The following table summarizes the annual savings in labour cost and the annual maintenance costs in calibration over 6 years: Year (n) Net Cash Flow ($) 0 Costs ($) Savings ($) -13,000 1 2 3 4 2,300 6,000 3,700 2,300 7,000 4,700 2,300 9,000 6,700 2,300 9,000 6,700 5 2,300 9,000 6,700 6 2,300 9,000 6,700 Find the internal rate of return for this project. [6]Show your complete solution. 19. A machine cost 7,350 has a life of 8 years and has a salvage value of 350 at the end of a years. Determine its book value at the end of 4 years using Constant- Percentage of Declining Value.