A delivery car had a first cost of $30,000, an annual operating cost of $16,000, and an estimated $3500 salvage value after its 6-year life. Due to an economic slowdown, the car will be retained for only 4 years and must be sold now as a used vehicle. At an interest rate of 11% per year, what must the market value of the used vehicle be in order for its AW value to be the same as the AW if it had been kept for its full life cycle? The market value of the used vehicle is determined to be $ .

Q: Kenzie Company purchased a 3-D printer for $318,000. Although this printer is expected to last for…

A: Double declining depreciation rate = Straight line depreciation rate x 2 = (100/3 years) x 2 =…

Q: A company is considering purchasing factory equipment that costs $480,000 and is estimated to have…

A: Annual Operating Income = Annual revenues - Operating Expenses - Depreciation = $135000 - $39000 -…

Q: St. Johns River Shipyards is considering the replacement of an8-year-old riveting machine with a new…

A: Computation:

Q: Perez Freight Company owns a truck that cost $46,000. Currently, the truck's book value is $23,000,…

A: Perez Freight Company   Realizable Value of old truck 15,000   Savings in fuel costs (5,700 x 4)…

Q: A business firm is contemplating to purchase new equipment. The purchase price is 60,000 and its…

A: The question pertains to the concept of capital budgeting tools and time value of money and has been…

Q: A certain corn mill decided to sell its old engine which has been used for 5 years costing P7,200…

A: SOLUTION DEPRECIATION REPRESENTS HOW MUCH OF AN ASSETS VALUE HAS BEEN USED.

Q: Kenzie Company purchased a 3-D printer for $303,000. Although this printer is expected to last for…

A: Straight line depreciation rate=100%Estimated useful life=100%3 years=33.33%

Q: Mwasalat Company wants to renovate one of its existing buses at cost of OMR 200,000 and the Company…

A: a. People’s response to the new bus services in Muscat has been very positive. Passengers are very…

Q: A company is planning to purchase a machine that will cost P240,000, have a six-year life, and be…

A: Net income = P 30000 n = 6 years Initial cost (I) = P 240000 Let r = Rate of return

Q: Aurora is considering the purchase of a new machine. Its invoice price is $250,000, freight charges…

A: Annual Rate of return = Net IncomeInitial Investment   NPV = Present Value of Cash Inflow - Initial…

Q: ne member of a

A: Capitalize Cost = FC + OMi+RC -SV(1 + i)n-1

Q: An old machine has a first cost of P10M and an annual operating cost of P2,023,479 and a useful life…

A: The annual equivalent cost refers to the cost of possessing, operating, painting the machine or the…

Q: Rundle Freight Company owns a truck that cost $39,000. Currently, the truck's book value is $22,000,…

A: Additional fuel cost = Annual fuel costs x no. of years = $6500 x 5 years = $32,500

Q: EAC

A: EAC stands for the equal annum cost or the equivalent annual cost. It is the cost of the asset as…

Q: A delivery car had a first cost of $30,000, an annual operating cost of $15,000, and an estimated…

A: Annual worth analysis is an analysis of value of an investment on an annual basis. It measures the…

Q: The Scampini Supplies Company recently purchased a newdelivery truck. The new truck costs $22,500,…

A: The formula to compute NPV for an abandonment option as follows:

Q: A delivery car had a first cost of $40,000, an annual operating cost of $15,000, and an estimated…

A: The annual operating cost can be considered as an annuity where the future value will be  A =…

Q: A delivery car had a first cost of $30,000, an annual operating cost of $12,000, and an estimated…

A: Present Value of periodic payment= P* (1- (1+r)^-n)/r   So the annual payment is of the present…

Q: Aurora is considering the purchase of a new machine. Its invoice price is $250,000, freight charges…

A: Net present value is the difference of discounted cash outflows and inflows.

Q: in a replacement analysis, the following is known about the challenger: the initial investment is…

A: Economic life of an asset is the period of time during which it remains useful for the owner.

Q: A new barcode reading device has an installed cost basis of $20,670and an estimated service life of…

A: Double declining balance method is a method which is used to determine the value of depreciation…

Q: A company is considering purchasing a machine that costs $480000 and is estimated to have no salvage…

A: Cash payback period = Initial investment/Cash flow per year

Q: Last year, a decision was made to keep the same equipment in lieu of buying new equipment. The old…

A: Calculation of EUAC of the new equipment -

Q: QBS company wishes to replace its current equipment that was purchased 8years ago with the newer…

A: Future worth analysis is a method in which it is required to calculate the equivalent cost of the…

Q: What will the depreciation charge be in year seven​? What will be the book value at the end of year…

A: Formula: Rate of DDB Depreciation= 100%Usefull Life×2 Given: CNC machine ​$35,000 Service life    7…

Q: Adams Freight Company owns a truck that cost $44,000. Currently, the truck's book value is $26,000,…

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Esteez Construction Company has an overhead crane that has an estimated remaining life of 7 years.…

A: As per cash flow approach:   The company should use the old crane because the annual equivalent cost…

Q: Machine A was purchased 5 years ago for $90,000. Its operating cost is higher than expected, so it…

A: Computation of the market value for machine that would make two machines equally attractive is shown…

Q: An asset purchased 5 years ago for $75,000 can be sold today for $15,000. Operating expenses will be…

A: Capital Budgeting: Capital budgeting decisions are the most important decision in corporate…

Q: A conveyor system was purchased three years ago for $60,000 with an expected useful life of 10 years…

A: in this we have to calculate present value of both defender and challenger.

Q: An automated assembly robot that cost $300,000 has a recovery period of five years with an expected…

A: Depreciation recapture- It is a tax provision that powers the IRS to collect taxes on any profitable…

Q: Kenzie Company purchased a 3-D printer for $591,000. Although this printer is expected to last for…

A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…

Q: A delivery car had a first cost of $30,000, an annual operating cost of $12,000, and an estimated…

A: Computation of the market value of two-year-old vehicle be in order for its AW value to be the same…

Q: A delivery car had a first cost of $36,000, an annual operating cost of $16,000, and an estimated…

A: As given in question : Cost of car = $36000 AOC( Annual Operating Cost) = $16000 Salvage value =…

Q: A machine now in use was purchased fouryears ago at a cost of $30,000. It has a book valueof $9,369.…

A: Depreciation is the decrease in the value of fixed tangible asset due to use of asset or due to…

Q: A construction company can purchase a used backhoe for $90,000 and spend $450 per day in operating…

A: Initial cost of alternative 1  = $90,000 Operating cost of alternative 1  = $450 per day Operating…

Q: A company is considering replacing an old machine. The trade-in value of the old machine is curently…

A: To find the equivalent uniform annual cost, we will fist have to determine the NPV of both the…

Q: Granfield Company has a piece of manufacturing equipment with a book value of $41,500 and a…

A: Book value of equipment : $41,500 Remaining useful life : 4 years Salvage Value :  zero Current…

Q: Finch Freight Company owns a truck that cost $46,000. Currently, the truck's book value is $25,000,…

A: Relevant cost is a phrase used in managerial accounting to indicate avoidable expenditures that…

Q: The Darlington Equipment Company purchased a machine 5 years ago, prior to the TCJA, at a cost of…

A: The question is related to Capital Budgeting amd the problem is of replacement decision.

Q: Sunland is considering the purchase of equipment costing $147000. The equipment has a 12- year…

A: The Accounting Rate of Return (ARR) seems to be the projected percentage rate of return on an…

Q: A printing machine initially costs ₱158,000. It can be sold for ₱15,000 at the end of its 10-year…

A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…

Q: Allen Construction purchased a crane 6 years ago for $130,000. It needs a crane of this capacity for…

A: Cash Flow Approach-: Cash Flow is a direct method that determines differences in cash payments and…

Q: Wildhorse Company is considering a purchase of equipment that costs $77700. The equipment has a…

A: Annual depreciation = (Cost - salvage value) / Expected life of the assets = (77700-0)/7 years =…

Q: Rockyford Company must replace some machinery that has zero book value and a current market value of…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.