A motorcycle costs P50,000 and has an expected life of 10 years. The salvage value is estimated to be P2,000 and annual operating cost is estimated at P1,000. What is the appropriate rate of return on the investment if the annual revenue is P10,000?

Q: A new drill press costs $12,000. It would potentially produce an additional $4,000 of revenue per…

A: Costs = $12,000 Revenue = $4,000 Operating Expenses = $1,200 Time period = 8 years  Rate = 10%

Q: The plant manager at a company would like to perform an analysis for a new $250,000 machine. If she…

A: Payback period method is a traditional method used in capital budgeting decisions which is used to…

Q: Annual maintenance costs for a rotary kiln is P2,000. The placement if a new refractory would reduce…

A: Annual savings for first 5 years = P 700 Annual savings for next 5  years = P 1200 Annual interest…

Q: The equipment needed to manufacture a product costs $1,000,000 to purchase.  This equipment has a…

A: SOLUTION- BREAK EVEN POINT  IS THE POINT AT WHICH TOTAL REVENUE EQUALS TO TOTAL COST OR EXPENSES.

Q: A new production system for a factory is to be purchased and installed for $175,812. This system…

A: Equivalent annual worth  The annual cost of owning and sustaining an asset is determined by dividing…

Q: life of 7 years. The annual maintenance cost is P6,000. While not in use by the firm, the equipment…

A: In annual worth method we try to find annual equivalent cost of of equipment and see whether it is…

Q: A certain machine costs GH¢25000 and lasts 6 years, after which time it has a scrap value of…

A: A capitalized cost of an asset is the cost incurred on an asset to put it to use. Capitalized cost…

Q: The equipment needed to manufacture a product costs $1,000,000 to purchase. This equipment has a…

A: 1) Statement showing equivalent uniform annual cost associated with this equipment when 10.000 units…

Q: A bulldozer was bought for ₱ 0.50M and have an estimated useful life of 10 years after which it will…

A: Straight-line depreciation expense=Cost of Asset-Scrap ValueUseful Life

Q: An existing machine in a factory has an annual maintenance cost of Php 40,000. A new and more…

A: An existing machine in a factory has an annual maintenance cost of Php 40,000. If same cost to be…

Q: Master Machine Berhad is considering a four-year project to improve its production efficiency.…

A: Net present value is difference between present value of cash outflow and present value of…

Q: A remotely situated fuel cell has an installed cost of BD2,000 and will reduce the existing expen:…

A: Salvage value is the book value of an asset (like an equipment or a machinery) after all…

Q: You are considering a manufacturing equipment that has a cost of $100,000. The equipment is expected…

A: Equivalent Savings per hour refers to amount of saving adjusted with time value factor is saved by…

Q: Amachine has an initial cost of P 40 000 and an annual maintenance cost of P 5 000. Its useful life…

A: Benefit cost ratio is a method used to determine the relationship between costs and the benefit of a…

Q: An underwater camera costs $1000. It has an expected life of 12 years, at the end of which the…

A: The depreciation expense is charged on fixed assets as reduction in the value of fixed assets with…

Q: Colaw Company is considering buying equipment for $240,000 with a useful life of five years and an…

A: THE AVERAGE INVESTMENT METHOD DIVIDES THE AVERAGE INFLOW OR INCOME EXPECTED FROM THE PROJECT BY THE…

Q: A firm is considering purchasing equipment that will reduce cost by P 400, 000. The equipment costs…

A: Present worth method is one of a valuation method used in capital budgeting. It is calculated by…

Q: A new production system for a factory is to be purchased and installed for $115,042. This system…

A: Initial investment =  115,042 Annual dollar savings = Savings in electricity consumption * cost per…

Q: You are considering a four-year project to improve production efficiency of your press. Buying a new…

A: Frist you need to calculate deperciation on machine and tax saving on sale of sale. Depreciation…

Q: Use the PW method. Show the cash flow diagram if necessary and complete solution. Do not use excel…

A: i)  Present worthIt is not worthwhile to purchase the new machine because its present worth is less…

Q: One of two methods must be used to produce expansion anchors. Method A costs $80,000 initially and…

A: Given information is: Method A costs $80,000 initially and will have a $15,000 salvage value after 3…

Q: A machine costs $10,000, has a useful life of 7 years and a salvage value of $1000.00 at the end of…

A: The formula for EUAC = r*NPV/(1-(1+r)^(-n)) Let us first find the NPV. Rate = 9.8% compounded…

Q: A delivery truck has a book value of $8,000 in year 5. The purchase price of the truck is $40,000.…

A: annuity factor = 1/(1+r)n                                   —-———…

Q: The estimated cost of a completely installed and ready-to-operate 40-kilowatt generator is $30,000.…

A: The calculation is:

Q: New equipment costs $847,000 and is expected to last for five years with the salvage value of 10% of…

A: The formula for the calculation of PVCCATS is as follows: PVCCATS=CdTd+k×1+0.5k1+k-SdTd+k×11+kn C is…

Q: Two processes can be used for producing a new engine. Process A will have a first cost of P750,000,…

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

Q: The initial investment cost of machine A is 9,000 TL, the useful life of the machine is 6 years and…

A: Time value tells that money received today is of more value than that of receiving exact value later…

Q: worthwhile to invest in the insulation? What is the payback period of the investment?

A: Reduction in fuel = P190000 × 20% = P38000  Less: Annual cost of taxes and insurance = 5% of P120000…

Q: A semi-tractor costs $230,000. The driver of the truck plans to use the truck for 4 years, after…

A: Here, Cost is $230,000 Time Period is 4 years Salvage Value is $35,000 Cost to operate and Maintain…

Q: New manufacturing equipment costs $225,000, salvage value is $25,000, and average annual earnings of…

A: a) Average annual rate of return = Average Annual Earning per year / Investment value

Q: A truck can be purchased for $55,000. Annual O&M costs are expected to increase by $1,800 every…

A: A) Replacement Interval Optimal (1) Equivalent estimated cost of a new machine- a)New machine cost =…

Q: per year for the first 10 years and $1000 per year, for the 10 years past the initial maintenance…

A: The current value of a future sum of money or stream of cash flows, given a specified rate of…

Q: A bulldozer was bought for P 0.50M and have an estimated useful life of 10 years after which it will…

A: Straight Line Depreciation Expense=Cost of Asset-Salvage ValueUseful Life

Q: A "standard" model of a dozer costs $20,000 and has an annual operating expense of $450. The dozer…

A: Opportunity cost = 5% As per information Calculation  of present value of each option Year…

Q: Some equipment is needed for a 4-year project. It can be leased for $15,000 annually, or it can be…

A: In order to find the rate of return one has to know the purchased amount and the amount for it was…

Q: Packaging equipment for Xi Cling Wrap costs $60,000 and is expected to result in end-of-year net…

A: MARR is used as a hurdle rate in the capital budgeting projects. It is that minimum rate which an…

Q: A particular service can be purchased for $100 per unit. The same service can be provided by…

A: Internal Rate of return is a capital budgeting techniques which help in knowing the actual rate of…

Q: A company is considering purchasing equipment costing $92,000. The equipment is expected to reduce…

A: IRR is the rate at which NPV is zero

Q: 100,000 TL is priced by a machine dealer. The purchaser of the machine estimates that the useful…

A: Present Value(PV) is current value of amount to be transacted in future. It is computed by…

Q: An industrial firefighting truck costs $100,000. Savings in insurance premiums and uninsured losses…

A: Time value of money states that the money present now is of a greater value than the sum of money…

Q: $500,000 is invested in equipment having a negligible salvage value regardless of the number of…

A: Present value computes the existing value of future benefits by discounting future worth with a…

Q: An industrial machine costing $14,000 will produce net cash savings of $5,000 per year. The machine…

A:

Q: Two techniques can be used to produce expansion anchors. Technique A costs $90,000 initially and…

A: Present worth analysis:Project A:Computation of present worth is as follows:-Initial cost+Salvage…

Q: An industrial organization studying the relative desirability of two diesel engines proposed for…

A: Relative Desirability : Based on the quantity of investment in one asset in an organization, how…

Q: XYZ Company is looking to invest in some new machinery to replace its current malfunctioning one.…

A: Annual Depreciation (straight line method) = (Cost of the assets - Residual value) / Expected life…

Q: A factory has the following alternative: buy a used machine at a price of $10,000.00 or a new…

A: The equivalent annual cost method involves the following steps: Step 1 – Calculate the net present…

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.