An old machine with a book value of P 20,000 was traded in in a new similar machine. The new machine, which had a cash price of P 80,000, was purchased for P 62,000 cash plus the old machine. The cost of the new machine was $ 81,000 $ 82,000 $ 80,000 $ 78,000
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An old machine with a book value of P 20,000 was traded in in a new similar machine. The new machine, which had a cash
The cost of the new machine was
$ 81,000
$ 82,000
$ 80,000
$ 78,000
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- A fire destroys Nancy's laptop that has a replacement value of $3,500 and an Actual cash value of $2000. Under which of the following homeowner policy, the insurer will pay for a maximum of $0 $2,000 $2,500 $3,500Tanaka Industrial Systems Company is trying to decide between two different conveyor belt systems. System A costs $275,000, has a 4-year life, and requires $81,000 in pretax annual operating costs. System B costs $355,000, has a 6-year life, and requires $75,000 in pretax annual operating costs. Both systems are to be depreciated straight-line to zero over their lives and will have zero salvage value. Suppose the company always needs a conveyor belt system; when one wears out, it must be replaced. Assume the tax rate is 22 percent and the discount rate is 9 percent. Calculate the EAC for both conveyor belt systems.An earth moving equipment that cost P 94,822 will have an estimated life of 10 years. Using double-declining balance method, compute the book value at the end of the year 3.
- A highly liquid asset *a. can be converted into a means of payment easily without loss of value.b. is highly leveraged.c. has high transaction costs associated with its sale.d. generally has a very limited market for its resale.An industrial plant bought a generator set for P89,663. Other expenses including installation amounted to P9,618. The generator set is to have a life of 17 years with a salvage value at the end of life of P6,667. Determine the book value at the end of 9 years by the sinking fund method at 12.36%.Chatham Automotive purchased new electric forklifts to move steel automobile parts two years ago. They cost $80,000 each, including the charging stand. In practice, it was found that they did not hold a charge as long as claimed by the manufacturer, so operating costs are very high. As a result, their current salvage value is about $10,000. Chatham is considering replacing them with propane models. New propane forklifts cost $59,000 each. After one year, they have a salvage value of $40,000 and thereafter decline in value at a declining-balance depreciation rate of 20 percent, as does the electric model from this time on. The MARR is 7 percent. Operating costs for the electric model will be $18,000 this year, rising by 12 percent per year. Operating costs for the propane model will initially be $12,000 over the first year, rising by 12 percent per year. Should Chatham Automotive replace the forklifts now? What is the the minimum total EAC for the electric forklifts and…
- A certain copier machine cost P150000 with a trade-in value of P15000 after making 800,000 copies. Using declining balance method. What is the book value when the machine had made 300,000 copies?A small manufacturing firm is considering the purchase of a new machine to modernize one of its current production lines. Two types of machines are available on the market. The lives of Machine A and Machine B are four years and six years, respectively, but the firm does not expect to need the service of either machine for more than five years. The machines have the following expected receipts and disbursements: After four years of use, the salvage value for Machine B will be $1,000. The firm always has another option: to lease a machine at $3,000 per year, fully maintained by the leasing company. The lease payment will be made at the beginning of each year.(a) How many decision alternatives are there?(b) Which decision appears to be the best at i = 10%?An asset costing P20,000 was purchased 3 years ago. At that time it was estimated that it would have a 5 year life and salvage value of P5,000. Consideration is being given to replacing it with a new asset costing P25,000 and a trade in of P6,000 will be allowed on the old one. If straight line depreciation has been used for accounting purpose, what is the sunk costs?