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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- An auto repair company needs a new machine that will check for defective sensors. The machine has an Initial investment of $224,000. Incremental revenues, including cost savings, are $120,000, and Incremental expenses, including depreciation, are $50,000. There is no salvage value. What is the accounting rate of return (ARR)?TransITRI is a transportation company with a recent need of a new construction equipment at a first cost of $78,000 (Equation (1)), zero salvage value, and a cash flow before taxes (CFBT) per year t that follows Equation (2). CFBT = $30,000 – 3,000t (for t = 1, 2, … T) (1) CFBT = - $78,000 (for t =0) (2) Calculate the PW if the economic life of similar machinery is 8 years, while the MARR is 16%, 20%, and 24%The LJB Company must replace a freezer and is trying to decide betweenthe following two alternatives:Item Freezer A Freezer BInvestment required ($29,000) ($25,000)Annual electrical bill (3,000) (4,000)Salvage value 6,000 5,000Project life in years 11 11The LJB Company’s cost of capital is 8 percent.Which investment provides LJB with the lowest total cost?
- A 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/CMio is going to buy a new machine for manufacturing its product: Machine A has a first cost of P50,000; annual maintenance P6,000; life 12 years and salvage value of P2,000. Machine B has a first cost of P140,000; annual maintenance P2,500, life 36 years and salvage value P10,000. Money is worth 9% .Compute the annual cost of machine AThe overall cost of the machine is P1,200,370. Molemi Group has P900,000 in the bank. The useful life of the machine is estimated to be 10 years and the policy is depreciated using diminishing balance at 10%. Let's say Molemi Group chooses to construct an office and shop with the money they have, which would cost the same as the machine above, and borrows the remainder from the bank at 7% interest over two years. The money is invested at 5% per year six months before construction starts. How would it be shown in the first year's financial statements?
- Horner Company buys a delivery van with a list price of $3,000,000. The dealer grants a 15% reduction in list price and an additional 2% cash discount on the net price if payment is made in 30 days. Irrevocable taxes amount to $40,000 and the company paid an extra $30,000 to have a special horn installed. What should be the recorded cost of the van? a. 2,539,000 b. 2,564,500 c. 2,499,000 d. 2,569,000New Style Corporation is a company that manufactures and sells chairs. On 1/1/20, the company purchases a piece of manufacturing equipment for $3,100,000 cash. The expected residual value is $200,000 and the useful life is 5 years. The company expects to produce 5,000,000 chairs with the equipment – 1,200,000 chairs in 2020; 1,400,000 chairs in 2021; 1,000,000 chairs in 2022; and 600,000 chairs 2023; and 800,000 chairs in 2024. Show your work. Round per unit to the nearest cent. Assume that New Style Corporation uses the Units-of-Activity method of depreciation.New Style Corporation is a company that manufactures and sells chairs. On 1/1/20, the company purchases a piece of manufacturing equipment for $3,100,000 cash. The expected residual value is $200,000 and the useful life is 5 years. The company expects to produce 5,000,000 chairs with the equipment – 1,200,000 chairs in 2020; 1,400,000 chairs in 2021; 1,000,000 chairs in 2022; and 600,000 chairs 2023; and 800,000 chairs in 2024. Show your work. Round per unit to the nearest cent. Assume that New Style Corporation uses the Straight-Line method of depreciation.
- New Style Corporation is a company that manufactures and sells chairs. On 1/1/20, the company purchases a piece of manufacturing equipment for $3,100,000 cash. The expected residual value is $200,000 and the useful life is 5 years. The company expects to produce 5,000,000 chairs with the equipment – 1,200,000 chairs in 2020; 1,400,000 chairs in 2021; 1,000,000 chairs in 2022; and 600,000 chairs 2023; and 800,000 chairs in 2024. Show your work. Round per unit to the nearest cent. Assume that New Style Corporation uses the Double-Declining-Balance method of depreciation.A person plans to purchase a model A equipment for Rp. 31,000,000. Another alternative is a model B for Rp. 35,000,000.- At the end of its economic life (8 years), both tools sell for Rp. 2,500,000,- and Rp. 3,000,000. , Model B's annual operating income is Rp. 16,000,000,- and model A Rp. 14,500,000,- The cost for operation and maintenance per year for model A and model B is Rp. 6,500,000, If i = 15% per year. Which tool to choose?A company buys a machine for $180,000 that has an expected life of nine years and no salvage value. The company expects an annual net income (after taxes of 30%) of $8,550. What is the accounting rate of return? a. 4.75% c. 2.85% e. 6.65% b. 42.75% d. 9.50%