A concrete and rock crusher for demolition work has been purchased for $67,000, and it has an estimated SV of $12,000 at the end of its five-year life. Engineers have estimated that the following units of production (inmở of crushed material) will be contracted aver the next five years. Using the units of production depreciation method, what is the depreciation allowance in year three, and what is the BV at the end of year three?EOY23m15,00022,00037,00016,00010,000The depreciation allowance in year three is $ - (Round to the nearest dollar.)The BV at the end of year three is $. (Round to the nearest dollar.)

Here we calculate the depreciation allowance in year three and book value (BV) at the end of year…

A concrete and rock crusher for demolition work has been purchased for S67,000, and it has an estimated SV of $12,000 at the end of its five-year life. Engineers have estimated that the fallowing units of production (in m of crushed material) will be contracted aver the next five years. Using the units of praduction depreciation method, what is the depreciation allowance in year three, and what is the BV at the end of year three? EOY 2 m 15,000 22,000 37,000 16,000 10,000 The depreciation allowance in year three is S (Round to the nearest dollar.) The BV at the end of year three is S (Round to the nearest dollar.)

A concrete and rock crusher for demolition work has been purchased for S67,000, and it has an estimated SV of $12,000 at the end of its five-year life. Engineers have estimated that the fallowing units of production (in m of crushed material) will be contracted aver the next five years. Using the units of praduction depreciation method, what is the depreciation allowance in year three, and what is the BV at the end of year three? EOY 2 m 15,000 22,000 37,000 16,000 10,000 The depreciation allowance in year three is S (Round to the nearest dollar.) The BV at the end of year three is S (Round to the nearest dollar.)

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 1E: A firm has the opportunity to invest in a project having an initial outlay of $20,000. Net cash...

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A firm has the opportunity to invest in a project having an initial outlay of $20,000. Net cash inflows (before depreciation and taxes) are expected to be $5,000 per year for five years. The firm uses the straight-line depreciation method with a zero salvage value and has a (marginal) income tax rate of 40 percent. The firms cost of capital is 12 percent. Compute the IRR and the NPV. Should the firm accept or reject the project?
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