Drill Press T Drill Press M Initial Investment S20,000 $30,000 Estimated Life 10 years 10 years Estimated Salvage Value $5,000 $7,000 Annual Operating Cost $12,000 $6,000 Annual Maintenance Cost $2,000 $4,0007
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Two numerically controlled drill presses are being considered by the production department of Zunni’s Manufacturing; one must be selected. Comparison data is shown in the table below. MARR is 10%/year. Solve, a. What is the future worth of each drill press? b. Which drill press should be recommended?
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- 1 An equipment costs P45,000 with an economic life of 18 years. Its salvage value is P12,000. Maintenance cost is done every 5 years for P6000. Operating cost is 4000 annually. Money is worth 12%. Compute for its capitalized cost.3. An Industrial plant bought a generator set for P90,000. Other expenses including installation amounted to P10,000. The generator is to have 17 years with a salvage value at the end of life of P5,000. Determine the book value at the end of 12 years by the following method;Declining balance method:P12,068P14,393P10.118P8,483Sinking fund method at 12% P59.860P53,100P45,529P65.896 SHOW YOUR SOLUTIONS PLEASECost of new equipment: $200,000 Installation: $20,000 Change in Net Operating Working Capital: $50,000 New sales per year: $115,000 New operating costs per year: $50,000 Economic life: 4 years Depreciable life: MACRS 3-year class (33%, 45%, 15%, 7%) Salvage value: $20,000 Tax Rate: 25% WACC: 9% What is the total initial investment outlay (FCF0)? What is the operating cash flow for year 2, or FCF2? (SHOW ALL WORK/STEPS) What are the planned non-operating cash flows in year 4 (i.e. terminal cash flows)? (SHOW ALL WORK/STEPS) What is the book value of the equipment after three years?
- H7. Query Company is considering an investment in machinery with the following information. Initial investment $ 200,000 Materials, labor, and overhead (except depreciation) $ 45,000 Useful life 9 years Depreciation—Machinery 20,000 Salvage value $ 20,000 Selling, general, and administrative expenses 5,000 Expected sales per year 10,000 units Selling price per unit $ 10 (a) Compute the investment’s annual income and annual net cash flow. (b) Compute the investment’s payback period. Please show all step by step calculationConstruct a Cash-flow diagram. An industrial plant bought a generator set for P90,000. Other expenses including installation amounted to P10,000. The generator set is to have a life of 17 years with a salvage value at the end of life of P5,000. Determine the depreciation charge during the 13th year and the book value at the end of 13 years by the (a) declining balance method (b) double declining balance method (c) sinking fund method and (d) SYD method.A firm bought an equipment for P56,000. Other expenses including installation amounted to P4,000. The equipment is expected to have a life of 16 years with a salvage of 10 percent of the original cost. Determine the book value at the end of 12 years by (a) the straight line method and (b) sinking fund method at 12% interest.
- Capitalized Cost 1.Find the capitalized cost of an asset whose cost is P100,000, salvage value is P10,000, life is 15 years at 5%. 2.A bridge that was constructed at a cost of P75,000 is expected to last 30 years, at the end of which time its renewal cost will be P40,000. Annual repairs and maintenance are P3,000. What is the capitalized cost of the bridge at an interest of 6%?Create a units of production depreciation Cargo Van Price $26,000 Machine Price $48,000Salvage value $2,000 Salvage value $3,000Useful life 10 years Useful life 8 yearsTotal miles 90,000 Total hours 13,000Yr 1 miles 12,100 Yr 1 hours 1,250Yr 2 miles 9,400 Yr 2 hours 1,46An industrial plant bought a generator set for P90,000. Other expenses including installation amounted to P10,000. The generator set is to have a life of 17 years with a salvage value at the end of life of P5,000. Determine the depreciation charge during the 13th year and the book value at the end of 13 years by the (a) declining balance method (b) SLM (c) sinking fund method if i=4% and (d) SYD method.
- Lotus contractors construction. Building cost= $13650000. Weighted average accumulated expenditures = $5600000 Actual interest was $562000, and avoidable interest was $272000. If the salvage value is $1150000, and the useful life is 40 years, depreciation expense for the first full year using the straight-line method is A.$319300 B.$348050 C.$326100 D.$459300Q7.Alyoum Newspaper purchased LG printing machine for 100,000. Installation of the machine costs 8,000. The machine is expected to be used for 10 years at end of which the salvage value is expected to be 10,000. DDB method is used. What is the book value at end of year 3? 55,296 51,200 64,000 None of the other answers Q8.Given an asset that has a cost basis of $300,000 and was sold for $350,000. The book value for the asset at the time of sale was $150,000. Assume that the capital gain tax rate is 40% while the ordinary gain tax rate is 20%. What are the net proceeds from this sale? $300,000 $310,000 $270,000 None of the other answers Q9.Consider a 5-year MACRS asset, which was purchased at $140,000. The asset was disposed of at end of year 5 with a salvage value of $50,000. What is amount of gain(or loss) when asset is disposed of ? $33,872 $11,280 $17,744 $16,128An equipment costing P1.8M has a salvage value of P300,000 after 5 years. Calculate the depreciation value (book value) at the end of 3 years using the straight-line method. A. P860,000 B. P750,000 C. P900,000 D. P700,000
