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- ABC Corporation acquired an asset for a purchase price of P1,200,000. This is expected to appreciate every yearby 5%. The entity will be incurring P50,000 cost to dispose the asset by the end of its 20-year investment period. If the cost to finance this investment is 4%, what is the intrinsic value of the asset after accounting for the cost of illiquidity? a. P1,583,626.69 b. P1,430,297.18 c. P8838,969.98 d. P972,129.05 e. None among the other choicesA machine is purchased for P100,000. If the annual maintenance cost is P1,800, determine the capitalized cost of perpetual service with an interest rate of 8%. P325,000 P425,000 P525,000 P625,000On January 1, 2022 Yuji Co. acquired a land containing ore for a total cost of P40,000,000. Other capitalizable cost incurred for the wasting assets amounted to P20,000,000 including a P5,000,000 Future value cost of Rehabilitating the area after the use of the property , applicable present value is as follows, using a Discount Rate of 10% PV of 1 after 10 Years =0.39PV of Ordinary Annuity for 10 Yrs =6.14Estimated Tons to be extracted are as follows: Year 1 = 5,000,000 to DateYear 2 = 4,000,000 LeftYear 3 = 4,500,000 to DateYear 4= 6,000,000 to DateYear 5= 3,000,000 LeftYear 6= No ChangeYear 7= Shut DownYear 8= Shut DownYear 9 = No ChangeYear 10 =5,500,000 to DateYou Audit Findings has revealed that the company regularly quotas a 500,000 Tons per annum and has shown no indication of changing throughout the year Apply 2022 Applicable framework for PPEThe Inspection of the mining machinery revealed the following information:Mining Machinery List Price 4,000,000Mining Machinery Cash…
- What is the capitalized cost of a structure that will require construction costof P1,000,000 immediately and P800,00 each year for the next 4 yearsand annual year –end maintenance of P36,000 plus the expenditure ofP200,000 an the end of each 10-year period for replacement? Assume12% interest rate.Determine the capitalized cost at 15% interest of a structure with an initial cost of P200000 and annual operating and maintenance cost of P40000.A project capitalized for P 50,000 in depreciable assets will earn a uniform annual income of P 19,849 in 10 yrs. The costs for operation and maintenance total P 9,000 each year. If the company expects its capital to earn 12% before income taxes, is the investment worthwhile? Use ROR, annual worth and present worth methods in justifying the investment.
- A certain equipment has a first cost of P 12,000 and a salvage value of P 500 at the end of x years. What is the value of x if the annual depreciation is P 1,567.6 using the Sinking Fund Method at 8%?Please answer immediately. A certain equipment has a first cost of P 12,000 and a salvage value of P 500 at the end of x years. What is the value of x if the annual depreciation is P 1,567.6 using the Sinking Fund Method at 8%?Consider the following financial data for an investment project:• Required capital investment al n = 0: $ 100,000• Project service life: I 0 yea rs• Salvage value at N = I 0: $15,000• Annual revenue: $150.000• Annual O&M costs (not including depreciation): $50.000• Depreciation method for tax purpose: seven-year MACRS• Income tax rate: 40%.Determine the project cash flow at the end of year lO.(a) $69.000(b) $73.000(c) $66.000(d) $67.000
- 36 Determine the capitalized cost of a research laboratory which requires P5,000,000 for original construction; P100,000 at the end of every year for the first 5 years and then P147,980 each year thereafter for operating expenses, and P500,000 every 6 years for replacement of equipment with interest at 12% per annum? A. 6,441,350 B. 6,067,015 C. 6,632,445 D. 6,573,650 E. None of the aboveAn asset with a purchase price of $501,013 falls in the 3-year MACRS asset class. The asset will be sold at the end of a three year project for $180,745. What is the book value of the asset at the end of the project? Round your answer to the nearest dollar. Year Depreciable Allowance 1 33% 2 45 3 15 4 7A project proposal submitted to you for evaluation follow: Investment, including depreciable assets of P495,000 with economic life of six years) - Php 865,000 Annual sales revenue - PhP 750,00 Variable cost of sales - 43.5% Annual cash operating costs - 295,000 Income tax rate - 25% Required: a. Annual cash return, payback period and internal rate of return. b. If the corporate cost of capital is 8%, should the project be implemented ?