ABC company purchased a machine use to their business whose first cost is P 500,000 with an estimated life of 10 years. The estimated salvage value of the equipment at the end of its lifetime is P 25,000. Determine the depreciation charge and book value at the end of various years using the straight line method of depreciation.

ABC company purchased a machine use to their business whose first cost is P 500,000 with an estimated life of 10 years. The estimated salvage value of the equipment at the end of its lifetime is P 25,000. Determine the depreciation charge and book value at the end of various years using the straight line method of depreciation.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter10: Introduction To Simulation Modeling

Section: Chapter Questions

Problem 41P: At the beginning of each week, a machine is in one of four conditions: 1 = excellent; 2 = good; 3 =...

See similar textbooks

Similar questions

At the beginning of each week, a machine is in one of four conditions: 1 = excellent; 2 = good; 3 = average; 4 = bad. The weekly revenue earned by a machine in state 1, 2, 3, or 4 is 100, 90, 50, or 10, respectively. After observing the condition of the machine at the beginning of the week, the company has the option, for a cost of 200, of instantaneously replacing the machine with an excellent machine. The quality of the machine deteriorates over time, as shown in the file P10 41.xlsx. Four maintenance policies are under consideration: Policy 1: Never replace a machine. Policy 2: Immediately replace a bad machine. Policy 3: Immediately replace a bad or average machine. Policy 4: Immediately replace a bad, average, or good machine. Simulate each of these policies for 50 weeks (using at least 250 iterations each) to determine the policy that maximizes expected weekly profit. Assume that the machine at the beginning of week 1 is excellent.
Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?
Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?
The Tinkan Company produces one-pound cans for the Canadian salmon industry. Each year the salmon spawn during a 24-hour period and must be canned immediately. Tinkan has the following agreement with the salmon industry. The company can deliver as many cans as it chooses. Then the salmon are caught. For each can by which Tinkan falls short of the salmon industrys needs, the company pays the industry a 2 penalty. Cans cost Tinkan 1 to produce and are sold by Tinkan for 2 per can. If any cans are left over, they are returned to Tinkan and the company reimburses the industry 2 for each extra can. These extra cans are put in storage for next year. Each year a can is held in storage, a carrying cost equal to 20% of the cans production cost is incurred. It is well known that the number of salmon harvested during a year is strongly related to the number of salmon harvested the previous year. In fact, using past data, Tinkan estimates that the harvest size in year t, Ht (measured in the number of cans required), is related to the harvest size in the previous year, Ht1, by the equation Ht = Ht1et where et is normally distributed with mean 1.02 and standard deviation 0.10. Tinkan plans to use the following production strategy. For some value of x, it produces enough cans at the beginning of year t to bring its inventory up to x+Ht, where Ht is the predicted harvest size in year t. Then it delivers these cans to the salmon industry. For example, if it uses x = 100,000, the predicted harvest size is 500,000 cans, and 80,000 cans are already in inventory, then Tinkan produces and delivers 520,000 cans. Given that the harvest size for the previous year was 550,000 cans, use simulation to help Tinkan develop a production strategy that maximizes its expected profit over the next 20 years. Assume that the company begins year 1 with an initial inventory of 300,000 cans.
A rural cooperative purchased a trencher at a cost of P230,500.00. It is estimated that the trencher will have a salvage value of P25,000.00 after digging 300,000 meters of irrigation canals. Determine the book value of the trencher after two years, if it was used to dig 50,000 meters on the first year and 75,000 meters on the second year. (Ans. P144,875.00)
ABC Inc. must purchase a welding machine. The following is known about the machine and about possible cash flows. p=.40 p=.30 p=.30 First cost $40,000 $40,000 $40,000 Annual savings 2,000 5,000 8,000 Annual costs 12,000 8,000 6,000 Actual salvage value 4,000 5,000 6,500 The machine is expected to have a useful life of 8 years. The company has a MARR of 7%. Determine the NPW of the machine.
Paul is the owner of a sport store that specialises in extreme sports such as paragliding and wakeboarding. To entice customers to spend more he has recently launched store credit, subject to approval. Which one of the following is a cost of granting credit that Paul must be aware of? Select one: a. Loss of interest b. Insurance cost c. The loss of customer goodwill d. Loss of flexibility
ABC Corporation has recently given out a nine-month contract to a construction subcontractor. At the end of the first month, it becomes obvious that the subcontractor is not reporting costs according to an appropriate WBS level. ABC Corporation asks the subcontractor to change its cost reporting procedures. The subcontractor states that this cannot be done without additional funding. This problem has occurred with other subcontractors as well. What can ABC Corporation do about this?
An airline studied the data from their passenger records and noted that their customers turn up only about 95% of the time. A flight can accommodate 40 passengers and each seat costs 4,000 Php. Suppose each passenger books a ticket independently and the airline decides to sell 42 tickets for the flight. If more than 40 show up for the flight , then the extra passengers will be compensated PhP10,000 for rebooking and other expenses. 5. If Profit = Ticket sales-Compensation of Bumped passenger(s). What is the profit if 42 customers show up?
A hospital in a rural community operates the ambulance service. The hospital purchases a new ambulance for $150,000. They estimate a useful life of 10 years and a salvage value of $20,000. What is the annual charge for depreciation on this asset?
A manager is going to purchase new processing equipment and must decide on the number ofspare parts to order with the new equipment. The spares cost $200 each, and any unused spareswill have an expected salvage value of $50 each. The probability of usage can be described by thisdistribution:Number 0 1 2 3Probability .10 .50 .25 .15If a part fails and a spare is not available, two days will be needed to obtain a replacementand install it. The cost for idle equipment is $500 per day. What quantity of spares should beordered?a. Use the ratio method.b. Use the tabular method (see Table 13.3).
A machine can be purchased at t = 0 for $20,000. The estimated life is 5 years, with an estimated salvage value of zero at that time. The average annual operating and maintenance expenses are expected to be $5,500. If MARR = 10%, what must the average annual revenues be in order to be indifferent between (a) purchasing the machine or (b) doing nothing?