Q: A machine that has been used for 8 years has a market value of $2,500 now, which decreases by $100…
A: Given information Current market value of machine=$2500 Depreciation =$100 each year for next 5 year…
Q: Which are the three aspects of the replacement problem?
A: Replacement problem is important to understand as one needs to realize the cost at which asset is…
Q: A replacement analysis is most objectively conducted from the viewpoint of: (a) An outsider (b) A…
A: Replacement analysis is done in order to compare and chose among two options: defender and the…
Q: A Contractor imported a bulldozer for his job, paying P 350,000 to the Manufacturer. Freight and…
A: Given The contractor pays to manufacturer = P350,000 Freight and insurance charge =P18000 Broker's…
Q: If the actual reserves are given as 11,000 and the required reserves are given as 9000 find the…
A: Generally in the given question Actual reserves are stated as = 11000 Required reserves = 9000…
Q: A 5 year-old tooling kit that was purchased new for $9000 has a current market value of $4000 and…
A: Equivalent annual cost (AEC) can be calculated by using the following formula.
Q: Explain the annual-equivalent worth (AE) criterion?
A: Annual equivalent work criterion provides a measuring basis of investment worth through an annual…
Q: The economic service life of an asset is:a. the length of time required to recover the first cost of…
A: The economic service life of an asset is the period of time in which the asset is useful for the…
Q: ⦁ ABC Company has a product that sells for $400 per unit and its variable cost per unit is $260.…
A: sales per unit = $400 cost per unit = $260 Company’s fixed cost = $840,000
Q: Find the EUAC over a 5-year period for a $10,000 overhaul in year 3. Let i = 10%.
A: Given information: Cash flow (C) = $10,000 Interest rate (i) = 10% Number of years (n) = 5 years The…
Q: What are the three aspects of the replacement problem?
A: Replacement problem is important to understand as one needs to realize the cost at which asset is…
Q: A machine that was used for 8 years has a market value of $2500 now, which decreases by $100 each…
A: Given information Current market value of machine=$2500 Depreciation =$100 each year for next 5 year…
Q: A certain equipment costs P X now and has a salvage value of P 40,000 at the end of 23,000 hours of…
A: Given the information:; Equipment cost = X Salvage value = 40000 Book value after one year = 360000…
Q: The first cost of a machine is P1,800,000 with a salvage value of P300,000 at the end of its life of…
A: Following is the given information: First cost of machine = P1800000 Salvage value = P300000 Time =…
Q: In replacement analysis, the "economic lifetime" of a capital equipment is A. the service life that…
A: The time value of money refers to the concept that cash received today has a higher value than cash…
Q: e following data shows the different sizes of pipes which a company wishes to use as a replacement…
A: Initial Cost 1800000 Annual Cost 88000 Operating Cost 240000 r 10%
Q: What is the Break-Even Analysis?
A: The break even analysis analyzes the short-run relationship between the change in total sales…
Q: You, an engineer, and an attorney friend, Rob, started a small business 3 years ago to do energy…
A: Cost of new equipment = $20,000 Book value = $10,000 Difference in cost of new equipment and value…
Q: Consider two basic approaches to analyzing replacement problems: the cash flow approach?
A: The cash flow approach: It considers cash-flows impact while replacement of alternatives. In this,…
Q: How can we calculate the Economic Service Life for Defender?
A: The economic service life of a defender is a period in which the annual equivalent cost is minimum.…
Q: A commercial 3D printer is purchased for $320,000. The salvage value of the printer decreases by 45%…
A: T A=(-A)x (1-45%) B=(-A)-A C D=B+C Year Asset value at the beginning of the year Depreciation…
Q: An old machine with a book value of P 20,000 was traded in in a new similar machine. The new…
A: Classification of Costs Fixes and operating costs are included in the machine rate, but this isn't…
Q: A replacement analysis is most objectively conducted from the viewpoint of:a. an outsider.b. a…
A: In this case, the viewpoint of non owner is who owns nothing in the estimation is of greatest…
Q: Task 2 (Replacement Analysis - Defender/Challenger Scenario) Hadeel Majan Industries purchased a…
A: Equivalent Annual Cost (EAC) gives the cost of owning and maintaining an asset annually.
Q: In a replacement study, the correct value to use when determining the purchase price of the…
A: According to the replacement study, the purchase price of the challenger is determined by the first…
Q: Three years ago, Witt Gas Controls purchased equipment for $80,000 that was expected to have a…
A:
Q: How can we determine the economic service life of the asset?
A: The asset is the any useful or valuable commodity that is owned by an individual in the economy. The…
Q: 5. The physical life is always greater than all the other “life" factors under replacement analysis.
A: Physical life of an assets is the full life span of an asset, where market value of assets is 0 that…
Q: 3000 this year and increasing 10% each year. Determine the marginal cost of extending the service…
A: Given : Market Value==$60000 Drop in market value each year=$2000 Maintenance cost for 4 years=$3000…
Q: An equipment has a first cost of 20,000 and salvage value of 1,000 at the end of 10yrs. Determine…
A: First Cost = 20,000 Salvage Value = 1,000 n = 10 years Book Value after 6 years = ?
Q: The economic service life of an asset is the number of years at which the EUAC is _____________.…
A: # The remaining useful life of an asset is refered to be as the economic service life. It results in…
Q: A machine cost P60,000 and the salvage value is 10,000 after 10 years. Find the book value after 7…
A: Depreciation refers to the loss in value of an asset over a period of time. Book value is the value…
Q: Use the replacement analysis to justify whether the existing equipment is required to be replaced…
A:
Q: A piece of certain equipment has the first cost of ₱90,000 and a salvage value of ₱4,500 at the end…
A: Given : Initial Cost (V) = 90,000 Salvage Value (Vs) = 4,500 Useful life (n) = 10 years Straight…
Q: Increasing the magnitude of the initial investment tends to __________ the optimum replacement…
A: Optimum replacement internal is the frequency of replacement which minimizes the effective uniform…
Q: Can we take the Replacement Decisions when the required service period is long?
A: Replacement: Replacement analysis refers to a crucial analysis in capital budgeting when the asset…
Q: 1-)According to replacement analysis, determine the number of years that the defender should be used…
A: Replacement analysis involves research into the planning, justification, and execution of a…
Q: Green Management Company is consideringthe acquisition of a new eighteen-wheeler.• The truck’s base…
A: Year saving Dep profit tax cash profit terminal value Net cash flow PV factor (15%) Discounted cash…
Q: Do the operating costs differ between the defender and challenger? Explain how?
A: Yes, the operating costs differ between the defender and challenger.
Q: A machine cost P7350 has asalvage value of P 350at the end of the useful life of 8 years. Determine…
A: Matheson's Formula is also known as the Declining Value Method.
Q: Describe the Break-Even Analysis?
A: A Break-Even analysis helps to know at what point the company or a product will be profitable. So,…
Q: nder was installed 10 years ago at a capital investment cost of $77,000. It presently has a market…
A: *Answer:
Q: DBS Builders Pte Ltd purchased an asphalt paver eight years ago for $280,000. The estimated…
A: To make a replacement decision we need to compare the EUAC of old asphalt for the years it can be…
Q: In a replacement study, the correct value for the first cost of the challenger is:a. the cost when…
A: In a replacement study, the correct value for the first cost of the challenger is
Q: A 5 year-old tooling kit that was purchased new for $9000 has a current market value of $4000 and…
A: Equivalent annual cost (AEC) can be calculated by using the following formula.
Q: Outdoor Sports is considering adding a putt putt golf course to its facility. The course would cost…
A:
Q: One year ago, a machine was purchased at a cost of $2,000, to be used for 6 years. However, the…
A: * SOLUTION :- (2) Given that , Old mechine:- Cost = 2000 Life =6 annual cost = 500 New mechine…
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- A replacement analysis is most objectively conducted from the viewpoint of:a. an outsider.b. a consultant.c. a non-owner.d. any of the above.A replacement analysis is most objectively conducted from the viewpoint of: (a) An outsider (b) A consultant (c) A nonowner (d) Any of the aboveDo the operating costs differ between the defender and challenger? Explain how?
- A process plant making 5000 kg/day of a product selling for $1.75/kg has annual variable production cost of $2M at 100 % capacity and fixed costs of $700,000. What is the fixed cost per kg at the break even point ? If the selling price of the product is increased by 10%, what is the dollar increase in net profit at full capacity if the income tax rate is 35% of the gross earnings?Show your complete solution. 19. A machine cost 7,350 has a life of 8 years and has a salvage value of 350 at the end of a years. Determine its book value at the end of 4 years using Constant- Percentage of Declining Value.Chanveida finds a home listed for $48k. Similar homes in good condition sell for $60k (market value). She pays $35k. Closing costs are $2k, estimated fix-up is $7k, and holding costs are $3k. She ‘flips’ the property after 3 months for $58k. Her closing costs upon sale are 7% of the sell price. Her overall tax rate is 30%. Assume no financing is used and there is no depreciation taken. Determine the Adjusted Cost Basis. (Do not show a decimal or cents in your answer)
- 8 years ago a company installed a robot that today has a market value of $ 60,000 and each year it drops $ 2000. For example, at the end of the first year the market value will be $ 58,000 and so it continues to decline. Maintenance costs for the next 4 years are estimated at $ 3000 this year and increasing 10% each year. Determine the marginal cost of extending the service for one year, for the next 4 years if the MARR is 12%. Fill in the blanks with the results. Calculate: a) The loss of market value in year 1 is $ b) Loss in interest in year 1 $ c) The Marginal Cost in year 1 is Show all the procedure for your answer thank youNuclear safety devices installed several years ago have been depreciated from a first cost of $200,000 to zero using the Modified Accelerated Cost Recovery System (MACRS). The devices can be sold on the used equipment market for an estimated $15,000, or they can be retained in service for 5 more years with a $9000 upgrade now and an operating expenses (OE) of $6000 per year. The upgrade investment will be depreciated over 3 years with no salvage value. The challenger is a replacement with newer technology at a first cost of $40,000, n = 5 years, and S = 0. The new units will have operating expenses of $7000 per year. Use a 5-year study period, an effective tax rate of 41%, an after-tax minimum acceptable rate of return (MARR) of 18% per year, and an assumption of classical straight line depreciation (no half-year convention) to perform an after-tax AW-based replacement study. The annual worth of the defender is determined to be $ . The annual worth of the challenger is…A commercial 3D printer is purchased for $ 380,000. The salvage value of the printer decreases by 35% each year that it is held. The cost to operate and maintain the machine the first year it is used is $ 12,500; these costs increase by $ 4,000 each year. What is the optimal replacement interval and minimum EUAC for the printer, assuming a MARR of 10% is used?
- If an asset has a cost of 6,000, a salvage value of 1,500, and the annual straight line method depreciation expense is 1,125, what is the useful life of the asset?Eads Industrial Systems Company (EISC) is trying to decide between two different conveyor belt systems. System A costs $427,000, has a 6-year life, and requires $115,000 in pretax annual operating costs. System B costs $502,000, has an 8-year life, and requires $79,000 in pretax annual operating costs. Both systems are to be depreciated straight-line to zero over their lives and will have a zero salvage value. Whichever system is chosen, it will not be replaced when it wears out. The tax rate is 33 percent and the discount rate is 24 percent. Which system should the firm choose and why? a.No option is correct b.System A because its net present value is -$588,792 c.System B because its net present value is -$612,240 d.System A because its net present value is $211,516You, an engineer, and an attorney friend, Rob, started a small business 3 years ago to do energy audits for small businesses. A piece of equipment that costs $25,000 then has become prematurely obsolete and needs to be replaced with a solid state version that has a purchase price of $20,000 and the current equipment has a nil salvage value. Your company accountant shows the book value of the equipment to be $10,000. (a) If you buy the solid state equipment, how should the difference between the cost of the new equipment and the value of the old equipment be considered? (b) Your partner thinks of this difference as an added cost to the new equipment, effectively making its purchase price $30,000. Is she correct?