Cellphone cost P12,000 new. It is estimated to have a life of 5 years with a salvage value at the end of life of P1,000. Determine the book value at 4th year. a. P3,200 b. P1,733 c. P5,400 d. P8,333
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Cellphone cost P12,000 new. It is estimated to have a life of 5 years with a salvage value at the end of life of P1,000. Determine the book value at 4th year.
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- Mustang Auto Parts, Inc. is considering one oftwo forklift trucks for its assembly plant.• Truck A costs $15,000 and requires $3,000 annually in operating expenses. It will have a $5,000salvage value at the end of its three-year servicelife.• Truck B costs $20,000, but requires only $2,000annually in operating expenses; its service life isfour years, at which time its expected salvage valuewill be $8,000.The firm’s MARR is 12%. Assuming that the trucksare needed for 12 years and that no significantchanges are expected in the future price and functional capacity of each truck, select the most economical truck on the basis of AE analysis.An item's initial cost is P 800,000, and its market worth after 5 years is P 507,630. Determine the equipment's estimated salvage value.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 4 years and 6 years, respectively, but the firm does not expect to need the service of either machine for more than 5 years. The machines have the following expected receipts and disbursements. Item Machine A (USD) Machine B(USD) First cost 325k 425k Service life 4 years 6 years Estimated Salvage Value 30k 50k Annual Opertaing & Maintenance Costs 40k 26k Oil Filter Change every other year 5k NONE Enginer Overhaul 10k every 3 years 14k every 4 years The firm always has another option: To lease a machine at 150k a year, fully maintained by the leasing company. After four years of use, the salvage value for machine B will remain at 50k. How many decision alternatives are there?…
- A6 A special purpose machine is to be acquired by paying a P15,000 initial cash payment plus a debt assumption of P135,000. The machine will generate additional net annual cash inflow of P40,000 for the firm throughout the 10 years of useful life of the asset. At the end of its life, a salvage value of 10% of its initial cost will be realized. Assuming that the MARR is 13.2% per annum, is the project justified using the PW method?A corporate jet costs $1,350,000 and will incur $200,000 per year in maintenance costs. The jet can be sold for $650,000 after 5 years. What is the capital recovery? MARR = 15% a. $506,310 b. $306,310 c. $270,000 d. $650,000 Your company just purchased a bar-code system for $70,000. It has a five-year MACRS class life. The expected market value of the bar-code system in 3 years is $32,000. What is the gain (or loss) when this asset is sold at end year 3? a. $11,120 b. $11,840 c. $5,120 d. -$1,600A Machine costs ₱80,000 and an estimated life of 10 years with a salvage value of ₱5,000. What is the book value after 5 years using Double Declining Balance Method. Answer: BV5=₱26,214.40Show Solution
- Anew forklift truck will require an investment of $30,000 and is expectedto have end-of-year market values and annual expenses as shown in the Table below.If MARR (before tax) is 10% per year, Önd the Economic Service Life of the truck.Market Value Annual ExpensesEnd of year at end of year during year1 $22,500 $3,0002 $16,875 $4,5003 $12,750 $7,0004 $9,750 $10,0005 $7,125 $13,000 please dont use excellYou are considering buying a 10-year-old machine for $280, or a new fuel-efficient machine for$600. The new machine will save you $5 per month on your fuel bill, and you will be able to sellit for $300 in 10 years. The used machine will have no resale value at that time. Assume theinterest rate is 3% per year. According to the information given, which machine will you buy?A harvester was purchased 4 years ago for $100,000. The current market value is $45,000, which will decline as follows over the next 5 years: $40,000, $33,500, $28,000, $24,000, and $17,000. The O & M costs are estimated to be $16,000 this year. These costs are expected to increase by $5000 per year starting year 2. MARR = 10% The foregone interest in year 4 is _______________.
- At 5.4% a bridge cost P 290 M with a life of 19 years. The bridge must be partially rebuilt at a cost of P 80 M at the end of each of the 19 years. Calculate the capitalized cost if an annual maintenance of P 520 000 is required.2.5. An electric cooperative is considering the use of a concrete electric pole in the expansion of its power distribution lines. A concrete pole costs P18,000 each end will last 20 years. The company is presently using creosoted wooden poles which cost P12,000 per pole and will last 10 years. If money is worth 12 per cent, which pole should be used. Assume annual taxes amount to 1 per cent of first cost and zero salvage value in both casesA Machine costs ₱80,000 and an estimated life of 10 years with a salvage value of ₱5,000. What is the book value after 5 years using Sinking Fund Method if i=9% Answer: BV5=₱50,456.44Show Solution