A machine purchased for #919866 has a depreciable life of 7 years, and it has a terminal book (salvage) value of $28588 at the end of its depreciable life. With the straight-line method of depreciation, what is the asset's book value at the end of year 5? Round your answer to 2 decimal places.
Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…
A: Annual cash inflow for 3 years = $5.14 million Upfront setup cost = $8.11 million Discount rate =…
Q: What is the difference between a flexible budget and a static budget? Which one do you believe works…
A: Flexible budget- This budget is prepared in a way that it allows changes in the assumption to be…
Q: Consider a zero-coupon bond with a $1,000 face value and 10 years to maturity. The price this bond…
A: Z = Maturity value or face value i.e. $1000 r = Yield to maturity i.e. 0.071 p = Maturity period…
Q: A call option for a P5,000,000-face value bond has a strike price of 101. If the market value of the…
A: Strike price = $5,000,000 * 1.01 = $5,050,000 (i.e. Face value * priced at) Market value =…
Q: Determine the monthly payment for the installment loan. Amount financed (P): $900 Annual Percentage…
A: P = $900 R = 0.075 or 7.5% Monthly rate (i) = 0.00625 (i.e. 0.075 / 12) Monthly period (p) = 36…
Q: 1. Murdoch Pty Ltd is considering three mutually exclusive projects. The initial cash outflow and…
A: Here,
Q: At the end of 2020 and the beginning of 2021, coupon rates on long-term T-notes and T-bonds were…
A: T notes and T bonds are the government secured investment wherein the fixed rate of return is…
Q: Your company has earnings per share of $4. It has 1 million shares outstanding, each of which has a…
A: Mergers and acquisitions: When one company (acquirer) buys at least 51% of the shares of another…
Q: BQ, Incorporated, is considering making an offer to purchase iReport Publications. The vice…
A: iReport Information Price earning ratio = Market Price / Earnings Price earning ratio = 8.80…
Q: What would you expect the nominal rate of interest to be if the real rate is 4.2% and the expected…
A: Solution:- Nominal rate of interest means rate of interest after the effect of inflation in real…
Q: In 1988, your Grandmother left you a trust fund with $10,000 in the account that has been earning 8%…
A: We will use the concept of time value of money here. As per the concept of time value of money the…
Q: You deposit $400 each month into an account earning 3% interest compounded monthly. Round to the…
A: Monthly deposit (m) = $400 Monthly interest rate (r) = 0.0025 (i.e. 0.03 / 12) Monthly period (p) =…
Q: a. Calculate the value of the bond. b. How does the value change if the market's required yield…
A: Information Provided: Coupon payment = $120 Par value = $1000 Maturity = 15 Yield to maturity = 10%…
Q: Natsam Corporation has $291 million of excess cash. The firm has no debt and 526 million shares…
A: A firm is at liberty to take a decision on how to disburse the excess cash at hand. It may decide…
Q: to trade at par? A company releases a five-year bond with a face value of $1000 and coupons paid…
A: Face value or maturity value = Q = $1,000 Semiannual YTM = YTM = 0.03 (i.e. 0.06 / 2) Semiannual…
Q: You are given the following data for a project that is to be evaluated using the APV method. Year 3…
A:
Q: 7) EmKay, Inc. is considering an investment in a new production equipment to boost its revenue. For…
A: A loan is a contract between two parties where one receives an amount of money from another in…
Q: What is the expected annual capital gain yield for Orange Corp stock, based on the Constant Dividend…
A: Dividend in one year (D1) = $5.97 Annual growth rate (g) = 0.1024 or 10.24% Required rate of return…
Q: An investment of P40,000 has a revenue of X pesos at the end of the first and second year. Given a…
A: When net present worth is zero that means present value of cash flow is equal to initial investment…
Q: Project A - 10,000 5000 4000 3000 Project B - 10,000 4000 3000 10,000 Project C - 10,000 3000 4000…
A: Mutually Exclusive projects are reflective of all such projects which are substitutes of each other…
Q: What is the percentage change in a 5-year zero-coupon bond with a duration of 5 years, when interest…
A: To calculate the percentage change in bond price we will use the below formula Change in bond…
Q: Identify an example of a systematic risk faced by QANTAS Ltd. from the scenarios below. Select…
A: Systematic risk is a very important concept in finance. It is that risk which is inherent to the…
Q: A bond is selling at $1075.12. It has 10 years to maturity and annual coupon payments. Yield is 8%.…
A: Price of bond (P) = $1075.12 Years to maturity (n) = 10 Years Yield rate (r) = 8% Face value (FV) =…
Q: Courtney purchased a house for $475,000. She made a down payment of 25.00% of the value of the house…
A: Here, To Find: Part 1. Monthly payment =? Part 2. Principal Balance at the end of 3 years =? Part…
Q: An efficient portfolio is one that: Select one: a. maximises return for a given level of…
A: Efficient Portfolio is the Portfolio or group of stocks invested which maximises the expected rate…
Q: Find the future value, using the future value formula and a calculator. (Round your answer to the…
A: The FV is the actual value of an investment that the investor receives at maturity. It helps…
Q: 1. Evaluate the following. a) Calculate the simple interest earned after investing $1000 at 8%…
A: To calculate the simple interest we will use the below formula Simple interest = P*r*t Where P -…
Q: ABC Corporation has the following information to estimate its liquidation value. Cash = 50,000…
A: Net liquidation value of the corporation will be the difference between all realised assets and net…
Q: A6) Finance A 3% acquisition fee is paid by investors on mutual funds worth $100,000,000. The mutual…
A: Acquisition fee is also known as purchase fees that is paid while buying the mutual fund. This fees…
Q: Tan Company purchased a large server for $23,000. The company paid 40.00% of the value as a…
A: The concept in the question is of Annuity. Annuity is a stream of equal payments/receipts made at…
Q: Much concern has been noted on declining housing prices recently brought about by the increase in…
A: Interest rate: The amount of investment in the economy is influenced by the interest rate. Greater…
Q: What is the most we should pay for a bond with a par value of $1000, coupon rate of 4.6% paid…
A: To calculate the price of bond we will use the below formula Value of bond =…
Q: Pybus, Inc. is considering issuing bonds that will mature in 23years with an annual coupon rate of 9…
A: A bond is a debt instrument issued by a company. The value of a bond is the present value of all…
Q: Cash discount versus loan The Wood Connection decides to offer cash discounts to its regular credit…
A: The company also makes sales of goods and services on account to increase the sale. The company uses…
Q: TargetCo has earnings per share of $5.50, 4 million shares, and a price per share of $55. If…
A: Expected Market price = PE multiple * Earnings per share = 15 * 5.5 = 82.5
Q: The down payment or equity needed for this investment is $60,000 (outflow) Cash Flow $15,000 5,000…
A: MIRR: By assuming that profits are reinvested at the company's cost of capital and that cash…
Q: Share repurchase proposal: Currently, the firm has available capital (cash and net income) of…
A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…
Q: The down payment or equity needed for this investment is $60,000 (outflow) Cash Flow $15,000 5,000…
A: Investment $ 60,000.00 Saving Rate 1.50% Loan Rate 8%
Q: Stinson Corporation borrowed $85,000 at 8% compounded quarterly to buy a warehouse. Monthly payments…
A: Here, To Find: Amortization schedule showing last 2 payments =? Total amount paid to settle the…
Q: Achieve 225,500 at 8.35% compound continously for 8 years 135 days
A: Compound interest can be calculated annually, semi annually,quarterly monthly or daily. In these…
Q: Calculate the ROI and calculate the Economic Profit.
A: Return on investment can be calculated with the formula ROI = Net IncomeInvestment=16,000100,000=…
Q: Balloons By Sunset (BBS) is considering the purchase of two new hot air balloons so that it can…
A: Hi There, As per the honor code of Bartleby we are bound to give the answer of first three sub…
Q: How did you find the taxable income in part a
A: Taxable income is the income that is subjected to tax. It is the amount of sales as reduced by cost…
Q: Assume that in the market for reserves, the discount rate is 8% and the federal funds rate is 4.5%.…
A: Federal Reserve System the central banking system of USA. It is not the federal government part, but…
Q: BQ, Incorporated, is considering making an offer to purchase iReport Publications. The vice…
A: Answer - Part 1 - Calculation of the value of iReport to BQ now - The price earning growth ratio…
Q: You purchase a bond with an invoice price of $1,041. The bond has a coupon rate of 5.63 percent, it…
A: Accrued Interest = Par value * coupon interest rate/2 * (6-time to next coupon payment )/ 6 =…
Q: Alpha Industries is considering a project with an initial cost of $8.1 million. The project will…
A: Dear Student, As per the Bartleby policy, In case of multiple questions and all questions are…
Q: Discuss the following topic(s) in the forum and submit proof of your participation in the online…
A: The following qualitative criteria should be taken into account when assessing the company's…
Q: The payback method measures: The profitability of an investment. The net cash inflow from an…
A: Pay back period is most popular method of capital budgeting decisions and is quite simple to use and…
Q: How much would $2,875 due in 50 years be worth today if the discount rate were 7.5%? Select the…
A: Present value factor can be calculated as follows = 1/(1+i) + 1/(1+i)^2 + 1/(1+i)^3 + 1/(1+i)^n…
Step by step
Solved in 2 steps
- 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.Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.Grandorf Company replaced the engine in a truck for 8,000 and expects the new engine will extend the life of the truck two years beyond the original estimated life. Related information is provided below. Cost of truck 65,000 Salvage value 5,000 Original estimated life 6 years The truck was purchased on January 1, 20-1. The engine was replaced on January 1, 20-6. Using straight-line depreciation, compute depreciation expense for 20-6.
- 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 it expects to use the truck for 26,000 miles. Calculate the annual depreciation expense.IMPACT OF IMPROVEMENTS AND REPLACEMENTS ON THE CALCULATION OF DEPRECIATION On January 1, 20-1, Dans Demolition purchased two jackhammers for 2,500 each with a salvage value of 100 each and estimated useful lives of four years. On January 1, 20-2, a stronger blade to improve performance was installed in Jackhammer A for 800 cash and the compressor was replaced in Jackhammer B for 200 cash. The compressor is expected to extend the life of Jackhammer B one year beyond the original estimate. REQUIRED 1. Using the straight-line method, prepare general journal entries for depreciation on December 31, 20-1, for Jackhammers A and B. 2. Enter the transactions for January 20-2 in a general journal. 3. Assuming no other additions, improvements, or replacements, calculate the depreciation expense for each jackhammer for 20-2 through 20-4.
- To test your formulas, assume the machine purchased had an estimated useful life of three years (20,000, 30,000, and 50,000 hours, respectively). Enter the new information in the Data Section of the worksheet. Does your depreciation total 320,000 under all three methods? There are three common errors made by students completing this worksheet. Lets clear up two of them. One, an asset that has a three-year life should have no depreciation claimed in Year 4. This can be corrected using an =IF statement in Year 4. For example, the correct formula in cell C32 is =IF(B32D9,0,(D7D8)/D9) or =IF(B32D9, 0, SLN(D7, D8, D9)). You may wish to edit what you have already entered rather than retype it. Two, as mentioned in requirement 2, the double-declining-balance calculation needs to be modified in the last year of the assets life. Assuming you have already modified the formula for Year 4 (per instructions in step 2), alter the formula for Year 3 also. If you corrected any formulas, test their correctness by trying different estimated useful lives (between 3 and 8) in cell E9. Then reset the Data Section to the original values, save the revised file as DEPREC2, and reprint the worksheet to show the correct formulas. The third common error doesnt need to be corrected in this problem. The general form of the double-declining-balance formula needs to be modified to check the net book value of the asset each year to make sure it does not go below salvage value. =DDB does this automatically, but if you are writing your own formulas, this gets very complicated and is beyond the scope of the problem.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.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. Dunedin buys equipment frequently and wants to print a depreciation schedule for each assets life. Review the worksheet called DEPREC that follows these requirements. Since some assets acquired are depreciated by straight-line, others by units of production, and others by double-declining balance, DEPREC shows all three methods. You are to use this worksheet to prepare depreciation schedules for the new machine.
- Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000A truck was recently purchased for 75,000 with a salvage value of 5,000 and an estimated useful life of eight years or 150,000 miles (24,000 miles per year for the first five years and 10,000 miles per year after that). Enter the new information in the Data Section of the worksheet. Again, make sure the totals for all three methods are in agreement. Print the worksheet. Save this new data as DEPREC5.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.
