A new airconditioning unit costs P150,000 and will have a salvage value of P15,000 after 5 years. Electrical cost per kWh is P1.25. Calculate the annual savings in terms of electrical savings if MARR is 15% per ye

A new airconditioning unit costs P150,000 and will have a salvage value of P15,000 after 5 years. Electrical cost per kWh is P1.25. Calculate the annual savings in terms of electrical savings if MARR is 15% per ye

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 13EA: Jullo Company is considering the purchase of a new bubble packaging machine. If the machine will...

See similar textbooks

Related questions

Q: Prepare adjusting entry for October 31. Show computation. A bank loan amounting to P100,000 was obta...

A: Adjusting entries are prepared by management to ensure the accrual basis accounting system. It is pr...

Q: Why is it important to prepare a financial budget?

A: Budget refers to the expenses as well as revenue estimation over the particular time period or durat...

Q: CASE 5 Cool Stuff, Inc. uses 800 units of a product per year on a continuous basis. The product has ...

A: The ordering costs and quantities of company is determined using several factors such a the Economi...

Q: What is PV ratio? How do you calculate it?(explain with an example)

A: PV ratio is the ratio that represents the function of sales and contribution. This shows the contrib...

Q: Timpano Communications Inc. reported the following shareholder's equity information on December 31, ...

A: Stock transactions are an important part which comprises of the changes in the capital structure (al...

Q: Cost method consolidation entries (controlling investment in affiliate, fair value differs from book...

A: Common stock is a type of security that represents a company's ownership. The board of directors is ...

Q: According to the FDIC, they would like to see fewer banks in the future. What will be the outcome an...

A: FDIC mentions in its latest report that they will see lesser banks in the future , the explanation o...

Q: The following data relate to store equipment of ABC Company for 2021: · Store Equipment at co...

A: Ending accumulated depreciation = Opening balance + depreciation expense for the period - accumulate...

Q: Delicious Dinners (DD) is a business entity which offers online cooking classes. Customers pay an an...

A: Intangible assets are assets involving intellectual properties like patents, trademarks, customer li...

Q: In 2021, Cream company reported cash basis income of P 7,800,000. Tracing back its records, accounts...

A: Accrual basis: Under accrual basis accounting, revenue and expenses are recognized when they are inc...

Q: 2. If a company sells goods that cost P70,000 for P82,000, the firm will: a. reduce Finished-Goods I...

A: Since you have asked multiple question, we will solve the first question for you. If you want any sp...

Q: The accountant at Fidel Trading has received the November 2010 bank statement. She immediately inves...

A: Journal entry - It refers to the process where the business transactions are recorded in the books o...

Q: In a multiple-step income statement, interest expense usually is not classified as an operating expe...

A: A multi-step income statement is the type of income statement that presents revenues and expenses as...

Q: LZS Bhd produces a single product called MY2.5 which is being exported to Indonesia. You are the man...

A: Sales variance = Actual sales - budgeted sales = RM 551,000 - (9,500 Units * 60 RM) = RM 19,000 (UNF...

Q: A, B and C are partners sharing profits and losses in the ratio of 3:2:1 after the bonus (20% of net...

A: A, B ,and C are the partners sharing profits and losses in the ratio of 3:2:1. So, A's Share of pro...

Q: FINANCIAL STATEMENTS Refer to the trial balance in Problem 3-13A and to the analysis of the change i...

A: Ledger refers to the book under which the accounting transactions are reported and the amounts are p...

Q: The post-closing trial balance of Wildhorse Corporation at December 31, 2022, contains the following...

Q: Required A Required B Required C Compute Mr. Jackson's taxable estate. (Consider intermediate calcul...

A: FMV of the property owned include Cash & current or non-current assets 50% of property if owned...

Q: Conclude and explain, with reference to the IPPF (code of ethics or standards) whether it is permiss...

A: Here given the details of the Professional codes and conduct which are insisted by the International...

Q: Bruce bought a bank bill with a face value of $1 million, priced to yield 3.30 per cent per annum ov...

A: Face value of the bill $1,000,000 Yield per annum 3.30% Monthly yield 3.30% / 12 months = 0.275...

Q: 58. On July 1, 2022, Kim Seok-jin Company purchased a machinery from a dealer paying P2,310,000 cash...

A: Historical cost of machinery is the cost incurred to purchase the machine and preparing it ready for...

Q: 1. There are a few errors in the annual income statement for Mayfare Plumb- ing, owned by James Fare...

A: Income statement means the statement which show the cost of goods sold and selling price and give ou...

Q: Saturn Company reported that the financial statements contained the following errors: ...

A: The ending inventory of last year becomes the beginning inventory of current year. If ending invent...

Q: uit buying vendor coffee for one year $4,483.97 and decided to contribute $2,400 (you saved $200 per...

A: The value of the money at retirement is the future value of the savings.

Q: What tax is to be paid by Stacy on this benefit for the year of assessment 2021?

A: Benefits are actually the perquisites which the employee receives from the employer during the year ...

Q: Given the two machines' data Machine A Machine B First Cost P8.000.00 P14,000.00 Salvage value 2.000...

A: Equivalent uniform annual Cost=Initial CostPresent Value Annuity Factor+Annual Cost

Q: Krepps Corporation produces a single product. Last year, Krepps manufactured 25,000 units and sold 2...

A: Under absorption costing, fixed manufacturing overhead is treated as product cost. Under variable co...

Q: a fired aset, h aa conputer, was phased an lanary i fer 1.419 wth timated Me ot aandasae or u v .e j...

A: Monthly depreciation expense using straight line depreciation = (Cost - salvage value)/useful life i...

Q: nciples (GAAP) and are audited by CPA firms. Do investors need to worry about the validity of those ...

A: GAAP = generally accepted accounting principles When CPA firms are audited they take all types of me...

Q: The master budget at Western Company last period called for sales of 240,000 units at $8.00 each. Th...

A: Flexible budget is prepared for the actual units of activity . Formula Variable cost = actual ...

Q: Entity A publishes quarterly interim financial reports. Entity A’s annual depreciation for items of...

A: Solution: Total amount of expense to be recognized in Entity A’s first quarter statement of profit o...

Q: Assuming World Data is a resident foreign corporation, what is the income tax payable for the curren...

A: A tax is a compulsory charge paid to the government by everyone who is generating any kind of income...

Q: ermin company had 200,000 ordinary shares outstanding on January 1. In addition, as of January 1, t...

A: Solution Concept Basic earning per share =net income for common shareholder / weight...

Q: total tax expense?

A: Tax rate 30 % for 2020 year And 25 % for 2021 year Total tax expense as follows

Q: Use the following information to prepare, in good form, an income statement, a statement of changes ...

A: An income statement is a statement that shows the income and expenses of a company. It also shows w...

Q: F2 Use the following information for questions 20-23: You are provided with the following informatio...

A: Net Income =Total Revenue -Total Expense. Income Statement Sales 56800 Less: Cost of goods sol...

Q: For the current year, Spiderman Company received a donation of 3,000 shares with a par value of P20 ...

A: Shareholders Equity: Shareholders' equity (also known as corporate net worth) is a measure of how mu...

Q: An entity reported the following data for the current year. What amount should be reported as income...

A: Income from continuing operations refers to the net income which is distinguishable in the income st...

Q: On January 1, the company’s account receivable and accounts payable were P1,200,000 and P1,500,000, ...

A: Calculation of Gross Sales Gross Sales = Ending balance of Accounts Receivable + Cash Received from ...

Q: A jeans maker is designing a new line of jeans called Slams. Slams will sell for $320 per unit and c...

Q: Eve is a physician who earns $400,000 from her practice during the current year. This year, she acqu...

A: solution concept If the modified adjusted gross income is $100000 or less , the maximum allowed dedu...

Q: X Corporation allows its sales manager to incur expenses subject to reimbursements, as follows: Elec...

A: 1. Amount subject to fringe benefit tax Electricity 70% borne by Company 14000 Water - 70% in ...

Q: Yeontan Company is engaged in a small export business. The company maintain limited records. Most of...

A: Purchases Purchases is considered to be important part in the business entity which was used for the...

Q: Mumford Corporation invested $30,000 in marketable securities at various times during the year. On D...

Q: 4.) Mr. Ali has been in business for some years. The following trial balance has been extracted from...

A: Financial statement is prepared from the trial balance which include :- Profit and loss and oth...

Q: Cash received from long-term notes payable Purchase of investments $ 44,000 11,100 Cash dividends pa...

A: Cash flow from financing activity includes transactions concerned with the funds available in the en...

Q: My Kitchen Delights (MKD) is considering two newsuppliers for the jars used in the production proces...

A: EOQ termed as Economic order quantity states the evaluation which business perform as it represent t...

Q: For each of the following, record the transaction entry made during the month of December (record de...

A: Sno Account Titles and Explanation Debit Credit 1 Supplies $ 3,300 Cash $ 3,300 ...

Q: The balance of an unearned revenue account:

A: The balance sheet shows the financial position of the company that includes the assets, liabilities,...

Q: June 1 – Hazel prepaid for insurance for the remaining 7 months of the year. The total premium paid ...

A: Journal Entry The purpose of preparing the journal entry to enter the required transaction into debi...

Question

A new airconditioning unit costs P150,000
and will have a salvage value of P15,000
after 5 years. Electrical cost per kWh is
P1.25. Calculate the annual savings in terms
of electrical savings if MARR is 15% per year.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Calculating the required part.

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Caduceus Company is considering the purchase of a new piece of factory equipment that will cost $565,000 and will generate $135,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return In Excel, see Appendix C.
A restaurant is considering the purchase of new tables and chairs for their dining room with an initial investment cost of $515,000, and the restaurant expects an annual net cash flow of $103,000 per year. What is the payback period?
Conestoga Plumbing plans to invest in a new pump that is anticipated to provide annual savings for 10 years of $50,000. The pump can be sold at the end of the period for $100,000. What is the present value of the investment in the pump at a 9% interest rate given that savings are realized at year end?
Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated revenue producing life of 4 years. Falkland has a cost of capital of 8%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?
If a copy center is considering the purchase of a new copy machine with an initial investment cost of $150,000 and the center expects an annual net cash flow of $20,000 per year, what is the payback period?
A grocery store is considering the purchase of a new refrigeration unit with an Initial Investment of $412,000, and the store expects a return of $100,000 in year one, $72000 in years two and three, $65,000 in years four and five, and $38,000 in year six and beyond, what is the payback period?
Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated revenue producing lite of 4 years. Mason has a required rate of return that is 12% and a cost of capital of 11%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?
The Ham and Egg Restaurant is considering an investment in a new oven that has a cost of $60,000, with annual net cash flows of $9,950 for 8 years. The required rate of return is 6%. Compute the net present value of this investment to determine whether or not you would recommend that Ham and Egg invest in this oven.
Consolidated Aluminum is considering the purchase of a new machine that will cost $308,000 and provide the following cash flows over the next five years: $88,000, 92,000, $91,000, $72,000, and $71,000. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return in Excel, see Appendix C.
Your company is planning to purchase a new log splitter for is lawn and garden business. The new splitter has an initial investment of $180,000. It is expected to generate $25,000 of annual cash flows, provide incremental cash revenues of $150,000, and incur incremental cash expenses of $100,000 annually. What is the payback period and accounting rate of return (ARR)?
How much must be invested now to receive $50,000 for 8 years if the first $50,000 is received in one year and the rate is 10%?
Jullo Company is considering the purchase of a new bubble packaging machine. If the machine will provide $20,000 annual savings for 10 years and can be sold for $50,000 at the end of the period, what is the present value of the machine investment at a 9% interest rate with savings realized at year end?