Basiclang Company is assessing whether to sell its unused car parts for P27,000. The parts were previously purchased for P100,000. The company will incur refurbishing costs of P15,000 to be able to sell them. Which alternative should the company pursue? O The company is indiferrent O Sell, there is an incremental benefit of P27,000 O Don't sell, it will incur a loss of P73,000 O Sell there is an incremental benefit of P12.000

Basiclang Company is assessing whether to sell its unused car parts for P27,000. The parts were previously purchased for P100,000. The company will incur refurbishing costs of P15,000 to be able to sell them. Which alternative should the company pursue? O The company is indiferrent O Sell, there is an incremental benefit of P27,000 O Don't sell, it will incur a loss of P73,000 O Sell there is an incremental benefit of P12.000

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter12: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 10P: Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6...

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Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6 years, and an estimated salvage value of 800. The replacement machine is eligible for 100% bonus depreciation at the time of purchase- The replacement machine would permit an output expansion, so sales would rise by 1,000 per year; even so, the new machines much greater efficiency would cause operating expenses to decline by 1,500 per year The new machine would require that inventories be increased by 2,000, but accounts payable would simultaneously increase by 500. Dautens marginal federal-plus-state tax rate is 25%, and its WACC is 11%. Should it replace the old machine?
Hanchets Inc. is considering the purchase of a new vehicle for P350,000. The firm's old vehicle has a book value of P85,000, but can only be sold for P60,000. The new vehicle will be depreciated using a 5-year useful life and the straight-line method. It is expected to save P62,000 after taxes from the reduced fuel and maintenance expenses. Tabletop Ranch is in the 34% tax bracket and has a 12% cost of capital. Compute for the accounting rate of return on initial investment.
The Lantern Corporation has 1,000 obsolete lanterns that are carried in inventory at a manufacturing cost of P20,000. If the lanterns are remachined for P5,000, they could be sold for P9,000. Alternatively, the lanterns could be sold for scrap for P1,000. Which alternative is more desirable and what are the total relevant costs for that alternative?
Which is a manufacturer of material handling equipment and machinery, is taking two alternatives into their consideration with regards to an equipment which it needs. Equipment A can be purchased with the cost of P850,000 and have a salvage value of P150,000 at the end of 10 years. It has a daily operating cost of P550. For the other option, the company can just rent the equipment for P1550 per day. At 18% interest, how many days should the equipment be is use if the Equipment A would be chosen to break even?
22. Basiclang Company is assessing whether to sell its unused car parts for P27,000. The parts were previously purchased for P100,000. The company will incur refurbishing costs of P15,000 to be able to sell them. Which alternative should the company pursue? Group of answer choices b. a. The company is indiferrent c. Sell, there is an incremental benefit of P12,000 d. Sell, there is an incremental benefit of P27,000 e. Don’t sell, it will incur a loss of P73,000
Shouldn't we deduct costs to sell the equipment amount of £100,000 from Fair value to get Net Selling Price which will be £540,000 so $40,000 impairment?
Pan Corporation incurs costs of $1.8 million building a custom piece of machinery for one of its customers. The machine is 90% complete when Pan receives notice that the customer has declared bankruptcy. As a result, the customer is not able to accept delivery or pay anything for the machinery it ordered. Due to the custom design of the machine, there are no other potential buyers. Pan can sell the machine as scrap for $80,000 or it can redesign and complete the machine for $900,000, after which it could be sold for $1 million. Given the above information and assuming Pan's cost and revenue estimates pertaining to scrapping or rebuilding the machine are accurate, answer the following questions: 1. Costs irrelevant to this decision total $. 2. If Pan sells the machine as scrap, its incremental income will increase by $. 3. If Pan rebuilds and then sells the machine, its incremental income will increase by $.
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Kando Company incurs a $9 per unit cost for Product A, which it currently manufactures and sells for $13.50 per unit. Instead of manufacturing and selling this product, the company can purchase it for $5 per unit and sell it for $12 per unit. If it does so, unit sales would remain unchanged and $5 of the $9 per unit costs of Product A would be eliminated. Should the company continue to manufacture Product A or purchase it for resale?
Otis Company is considering replacing equipment which originally cost P500,000 and which has P460,000 accumulated depreciation to date. A new machine will cost P790,000. What is the sunk cost in this situation?