A machine has a first cost of PhP 800,000 and a salvage value of PhP 50,000 at the end of its life after 10 years. The annual savings for the use of the machine amounts to PhP 124,900.97. If the annual maintenance cost of the machine is PhP 4,000 and the sinking fund to recover depreciation earns 6% compute the rate of return of investment.
Q: A company expects to earn Rs.4.4 million in 2022, and 50% of this amount or Rs.2.2 million has been ...
A:
Q: Determine the exact simple interest and future worth of P1,500,000 invested for the period from Marc...
A:
Q: At 14 percent interest, how long does it take to quadruple your money?
A: Years = ln(Future value / Present value) / ln(1 + Rate) where, Future value = $4 Present value = $1 ...
Q: What is the WACC for Arnold and Rodgers, a law firm using 65% equity with a required return of 15%, ...
A: WACC = [Cost of debt x (1 - tax rate) x Weight of debt] + (Cost of preferred stock x Weight of prefe...
Q: Peter makes a deposit at the end of every month into a savings account that earns interest at 5.4% c...
A: An annuity is used to make regular payments in exchange for a lump-sum initial payment. It is usuall...
Q: Alpha Ltd wishes to know its overall cost of capital and the management has come to you for assistan...
A: i) Dividend (D) = Sh 5 Share price (P) = Sh 87
Q: Alpha Corporation reported the following financial details for t ncial year 2021. Revenue is $250 mi...
A: The Earning per Share or the EPS are of two types that is the Basic EPS and the Diluted EPS. This me...
Q: Clark borrows P 600,000 at 15% compounded annually agreeing to repay the loan in 15 equal payments. ...
A: Loan amount (PV) = P600,000 Interest rate (r) = 15% Number of payments (n) = 15
Q: 1. In the following cash flow diagram, find the value of P in year 0. Consider an interest rate of i...
A: An annuity is a series of equal cash flows that occur for a certain fixed period of time. When the a...
Q: What is the ‘intrinsic value’ of a stock and what does it tell us?
A: Intrinsic value refers to a company's, stock's, currency's, or product's expected or calculated valu...
Q: A retailer ordered merchandise totaling $127,115.23 with terms 3.5% 10 net 40. What is the effect...
A: Terms 3.5%, 10 net 40 means if the payment is made within 10 days, then there would be discount allo...
Q: Risk return exercise : D2L Assessment #7 DePaul, Inc. You are searching for a stock to add to your c...
A: Given: Year Starting price Ending price 1 $40 $42 2 $42 $47 3 $47 $43 4 $43 $53
Q: Shelby purchases a retirement annuity that will pay her $3,000 at the end of every six months for th...
A: Present value of the money would be price that maximum price that can be paid for that kind of annui...
Q: Which is a better choice in buying a washing machine worth ₱12,700.00? A. Avail of the instalment p...
A: From all options, let's find the interest charged. For option A, n = 18 months Monthly payment (M) =...
Q: If your trust fund promises to pay you RM25,000 on your 24th birthday (6 years from today) and earns...
A: Promised amount (F) = RM 25000 n = 6 years r = 9%
Q: The table below shows the closing monthly stock prices for IBM and Amazon. Calculate the exponential...
A: The exponential three-month moving average for the month of March = (2/3) * Closing stock price of M...
Q: You are looking to buy a $350,000 home Your household has a combined income of $97,000 The interes...
A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first t...
Q: A 58-65-68 asymmetric butterfly spread is constructed using a total of 20 three-month call options. ...
A: An asymmetric butterfly spread involves buying the lowest and highest price calls and selling the ca...
Q: 2. HYZEL Merchandising borrowed Php 300,000 from Partner's Bank at 15% simple interest for one year....
A: Borrowed amount = Php 300,000 Interest rate = 15%
Q: Company leased a new machine from North Company on May 1, 2019, under a lease with the following inf...
A: Right of use of assets is present value of lease payment after deduction of salvage value after 10 y...
Q: How much interest is earned in 5 years on P50,000 deposited in a bank paying 3% interest per annum, ...
A: Compound Interest: It is the interest on a deposit or loan computed based on the initial principal ...
Q: Kelsey deposited $1,100 at the end of every month into an RRSP for 6 years. The interest rate earned...
A: An RRSP is a Canadian retirement plan where money grows at a fixed rate and the final tax on this am...
Q: A wholesale company prices its inventory at $143,483. If the original price of the items was $229,62...
A: Transaction price = $143,483 Original price = $229,622
Q: Calculate the equilibrium interest rate of a 1-year discount bond with a face value of 1000. The dem...
A: Let price = P Quantity = Q Demand: P = - 0.8Q + 1160 Supply: P = Q + 720 Equilibrium interest rate =...
Q: Sally received an invoice dated on 15 February 2020 worth RM4 goods that included a prepaid freight ...
A: Companies gives different kind of discounts to the customers to increase the sales. But the cost to ...
Q: Calculate the Modified Duration of the following securities: 10 % semi-annual coupon maturating in 5...
A: Assume that the face value of the coupon is $1,000. Therefore, the Modified duration for security ...
Q: Calculate the amount of the required monthly payment. (D. whole dollar amount.)
A: Monthly Payment: It is the payment made by the borrower to the lender for taking a loan. These paym...
Q: Ms. Lanz takes out a $9,000 loan to buy a used car for her daughter. She gets a 4-year loan at 8.75%...
A: We can calculate the total repayment of the loan by adding the interest amount and principal amount ...
Q: The Philippine Association of Board Examiners (PABE) desires to award a P1,600 scholarship annually ...
A: To determine up to which year scholarship can be awarded, it is required to calculate the interest e...
Q: Peter makes a deposit at the end of every month into a savings account that earns interest at 5.4% c...
A: A series of equal payments at equal intervals of time is called annuity. Pension payments, mortgage ...
Q: A fixed capital investment of P10 million is required for a proposed manufacturing plant and an esti...
A: Fixed capital investment = 10,000,000 Estimated working capital = 2,000,000 Depreciation rate = 10% ...
Q: What is the monthly payment on a loan of $5,000 at APR = 6% for 4 years.
A: Loan amount (LV) = $5000 Interest rate = 6% Monthly interest rate (r) = 6%/12 = 0.50% Period = 4 Yea...
Q: What is the monthly payment on a loan of $5,000 at APR = 8% for one year.
A: Loan amount (LV) = $5000 Interest rate = 8% Monthly interest rate (i) = 8%/12 = 0.666666666666667% N...
Q: Company manufacturers a product that is packaged and sold. A plate is offered to customers sending i...
A: The distribution cost per plate is P20 and there is a remittance of P10 per plate. we will pass the ...
Q: An ordinary annuity where the first cash flow of the series is not at the end of the first period an...
A: An annuity is a series of equal payments made at regular intervals. When these payments are made at ...
Q: What is the monthly payment on a loan of $5,000 at APR = 6% for 3 years
A: Monthly payment can be calculated by loan amount divided by present value factor of an ordinary annu...
Q: C: 9% Year Cash flows -$1,000 $500 $500 $500
A: Year Cash flow 0 -1000 1 500 2 500 3 500 WACC = 9%
Q: Aunt May Inc.'s business is booming. and it needs to raise more capital. The company purchases suppl...
A: When the effects of compounding over time are considered, an effective annual interest rate is the t...
Q: The table below provides the premiums for one-year European options on an underlying asset with a cu...
A: Current Spot Price is 130 To Create: A butterfly spread using: 120-140 strangle ATM Straddle To Fi...
Q: compute the initial value of the money if the borrower needs deposit the accumulated amount of 59,13...
A: With the application of time value of money, we can compute the initial deposit which will become $ ...
Q: Sharon Bohnette owns 1,300 shares of Northern Chime Company. There are six seats on the board of dir...
A: Voting for the seats on the board of directors can be done using the traditional method or the cumul...
Q: Loans - Loan of $ 12 million at 7.8% nominal interest capitalized monthly; - Loan of $ 5 million at ...
A: 1st Loan $ ...
Q: FastTrack Bikes, Inc. is thinking of developing a new composite road bike. Development will take six...
A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first...
Q: Find a sentence of a semi-annual payment with a periodic value of 300.00 riyals, and it is paid for ...
A: Simple Interest is calculated directly on the principal for the respective period of time. Simple I...
Q: What annuity ou period at 8% int equivalent to a of P100.000?
A: The present value of an annuity due is calculated by utilising the current value of money to calcula...
Q: Houston Tools has expected earnings before interest and taxes of $189,400, an unlevered cost of capi...
A: Value of firm is defined as an economic concept, which helps in reflecting the business value in the...
Q: You have just won the Super Duper Lotto. Although the prize is advertised as $30 million, you actual...
A: Given, the amount received today is $10 million After that $1 million is received every year. Term i...
Q: A man pays 1.5% interest on his loan four times a year. Find the effective annual interest rate. 5. ...
A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only on...
Q: Suppose you are provided with the following table of spot rates of different maturity bonds: Year ...
A: Here, Year Spot rate 1 8% 2 9% 3 7% 4 8% 5 10%
Q: Clayton Moore's Money Fund. Clayton Moore is the manager of an intemational money market fund manage...
A: Here,
Step by step
Solved in 2 steps with 2 images
- A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years. Prepare depreciation schedules reporting the depreciation expense, accumulated depreciation, and book value of the machine for each year under the double-declining-balance and sum-of-the-years-digits methods. For the double-declining-balance method, round the depreciation rate to two decimal places.Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for 120,000 miles. Montello uses the units-of-production depreciation method and in year one it expects to use the truck for 23,000 miles. Calculate the annual depreciation expense.The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to generate net after-tax operating cash flows, including depreciation, of $6,250 per year. The truck has a 5-year expected life. The expected salvage values after tax adjustments for the truck are given here. The company’s cost of capital is 10%. Should the firm operate the truck until the end of its 5-year physical life? If not, then what is its optimal economic life? Would the introduction of salvage values, in addition to operating cash flows, ever reduce the expected NPV and/or IRR of a project?
- Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an estimated useful life of four years or 100,000 hours, and a salvage value of 30,000. This machine will be used 30,000 hours during Year 1, 20,000 hours in Year 2, 40,000 hours in Year 3, and 10,000 hours in Year 4. With DEPREC5 still on the screen, click the Chart sheet tab. This chart shows the accumulated depreciation under all three depreciation methods. Identify below the depreciation method that each represents. Series 1 _____________________ Series 2 _____________________ Series 3 _____________________ When the assignment is complete, close the file without saving it again. Worksheet. The problem thus far has assumed that assets are depreciated a full year in the year acquired. Normally, depreciation begins in the month acquired. For example, an asset acquired at the beginning of April is depreciated for only nine months in the year of acquisition. Modify the DEPREC2 worksheet to include the month of acquisition as an additional item of input. To demonstrate proper handling of this factor on the depreciation schedule, modify the formulas for the first two years. Some of the formulas may not actually need to be revised. Do not modify the formulas for Years 3 through 8 and ignore the numbers shown in those years. Some will be incorrect as will be some of the totals. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as DEPRECT. Hint: Insert the month in row 6 of the Data Section specifying the month by a number (e.g., April is the fourth month of the year). Redo the formulas for Years 1 and 2. For the units of production method, assume no change in the estimated hours for both years. Chart. Using the DEPREC5 file, prepare a line chart or XY chart that plots annual depreciation expense under all three depreciation methods. No Chart Data Table is needed; use the range B29 to E36 on the worksheet as a basis for preparing the chart if you prepare an XY chart. Use C29 to E36 if you prepare a line chart. Enter your name somewhere on the chart. Save the file again as DEPREC5. Print the chart.Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.Montezuma Inc. purchases a delivery truck for $20,000. The truck has a salvage value of $8,000 and is expected to be driven for ten years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After five years of recording depreciation, Montezuma determines that the delivery truck will be useful for another five years (ten years in total, as originally expected) and that the salvage value will increase to $10,000. Determine the depreciation expense for the final five years of the assets life, and create the journal entry for years 6–10 (the entry will be the same for each of the five years).
- Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000 hours, the company expects to sell the asset for 150,000. What is the depreciation rate per hour based on activity?Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After three years of recording depreciation, Montezuma determines that the delivery truck will only be useful for another three years and that the salvage value will increase to $4,000. Determine the depreciation expense for the final three years of the assets life, and create the journal entry for year four.Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the following cash flows over the next five years: $99,000, $88,000, $92,000. $87,000, and $72,000. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return in Excel. see Appendix C.
- Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for ten years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.