Answered: First Cost - P5M First cost -…

First Cost - P5M First cost - P8,914,223 Annual operating cost - PO.2M Annual operating cost - P281,740 Service life - 5 years Service life - 6 years Salvage value - P5OT Salvege value - P174.071

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 17EA: Gardner Denver Company is considering the purchase of a new piece of factory equipment that will...

See similar textbooks

Related questions

Q: How does an investment appraisal technique help companies move in the right direction regarding an…

A: Investment evaluation is significant for brokers since it is a type of principal examination and,…

Q: a. Calculate AstroTurf’s EBITDA. Provide a step-by-step explanation for how you arrived at your…

A: Earnings before interest, taxes, depreciation, and amortization, or EBITDA, is a measure of a…

Q: Use the following to answer questions 34 – 39 ST reports the following income statement results:…

A: "Since you have posted a question with multiple sub parts, we will solve first three sub parts for…

Q: On December 31, 2020, Sack Port Ventures Inc. borrowed $103,000 by signing a four-year, 8.0%…

A: Installment Notes is an Financial instrument which is used to borrow money from financial…

Q: 4/3 Paid the Gazette $200 to place an employment advertisement for an accounting clerk. how to solve…

A: The journal entries are prepared to keep the record of day to day transactions of the business. The…

Q: CP9-1 (Algo) Computing Acquisition Cost and Recording Depreciation under Three Alternative Methods…

A: Straight Line Depreciation = (Cost of Assets - Estimated Residual Value) / Estimated useful Life

Q: QUESTION 5 A password text box hides text entered by the user. O True O False

A: Password protects the user information as it convert the input into encrypted data which is not…

Q: The appropriate asset value reported in the balance sheet by the lessee for an operating lease is:

A: GIVEN The appropriate asset value reported in the balance sheet by the lessee for an operating…

Q: Chan Company received a bill totaling $3,700 for machine parts used in maintaining factory…

A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Q: Assets Cash Accounts receivables 34,000 Liabilities and Equity Accounts Payable Wages Payable Income…

A: Calculation of ending balance of Cash Amount Beginning Balance of Cash $ 10,000…

Q: Marin Leasing Company signs an agreement on January 1, 2020, to lease equipment to Cole Company. The…

A: Note:- Since the lessor's desired rate of return on its investment is missing in the question,…

Q: Judy Company uses the retail inventory method to approximate its ending inventory. The following…

A: It is one of the inventory valuation method to determine the value of inventory at store. This…

Q: Given the following list of accounts with normal balances, what are the trial balance totals of the…

A: A trial balance is a statement that contains ledger balances. The sum of debit and credit of the…

Q: Isabelle's hourly rate is $21.25. She worked 40 hours. Her deduction for federal income tax is based…

A: Gross pay= 40 hours * $ 21.25 = $ 850

Q: considering purchasing the following spa equipment: Laser Hair Removal Machines Microdermabrasion…

A: NPV = Present Value of Annual Cash Flows + Present Value of Residual Value - Initial Cost Present…

Q: What is the production budgeted for the third quarter? Company policy is to have a finished goods…

A: A budget is a statement prepared by the companies, government, and individuals by making an estimate…

Q: . The payroll register of Seaside Architecture Company indicates $970 of social security and $257 of…

A: Lets understand the basics. Journal is required to make to record event and transaction that…

Q: Calculating Transfer PriceBurt Inc. has a number of divisions, including the Indian Division, a…

A: Answer 1) If the company has a policy to transfer at full cost, the transfer price will be $ 540…

Q: Which office maintains accounts of financial transactions of all national government offices,…

A: Government Accounting is a process of recording, classifying, analysing and communicating all the…

Q: 5. Ericson bought a new motorcycle worth P1.220 million. What is the estimated scrap value of the…

A: Depreciation is the fall in the value of a tangible asset over time due to normal wear and tear,…

Q: The management of Springer plc is considering next year’s production and purchase budget. One of…

A: GIVEN The management of Springer plc is considering next year’s production and purchase budget.…

Q: erris Company began January with 8,000 units of its principal product. The cost of each unit is $7.…

A: Inventory valuation is based on the flow of exemption used by the company. There are many methods…

Q: Assets Cash Liabilities and Equity Accounts Payable Wages Payable Income Tax Payable Notes Payables…

A: Note:- Since you have posted a question with multiple sub-parts, we will solve the first three…

Q: The chief financial officer of Laurent Ltd has asked you to calculate the taxable income and prepare…

A: Calculation of taxable income Particular Case 1 Case 2 Case 3 Case 4 Pre - tax accounting…

Q: Compute diluted earnings per share for 2022.

A: Answer:

Q: Q4. T&T produces product 'X' as a part of its main product. Each year, the company produces 75,000…

A: Solution Concept While taking a make or Buy decision , the total cost of making a product and buying…

Q: ATC 8-6 Spreadsheet Assignment Using Excel Irvine Publications established the following standard…

Q: laxpayer has the following data • Wages $250,000 • Dividends $50,000 • Investrment Interest $5,000 •…

A: Individuals, estates, and trust with income over the legal threshold amounts are liable to the…

Q: 4/2 Purchased three computers and a printer from Best Buy for $2,000 how to solve this problem? with…

A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Q: Garda purchased $700,000 of merchandise in August and budgets merchandise purchases of $720,000 in…

A: A cash budget is prepared to estimate the total cash received and total cash payment for the…

Q: To measure the financial viability of a proposed business, which is the more powerful measure-…

A: Ratio analysis involves evaluation of various operational aspects of the business such as liquidity,…

Q: Reliance Corporation sold 4,900 units of its product at a price of $24 per unit. Total variable cost…

A: Contribution margin is the firm's ability to cover its variable cost with the sales or revenue. The…

Q: Dominador's Pizza Inc. enters into a franchise agreement on December 31, 20x7 giving Doming Corp.…

A: Franchise Revenue To recognize the franchise revenue is one of the important task of the franchise…

Q: Ferris Company began January with 8,000 units of its principal product. The cost of each unit is $7.…

A: This question deals with the calculation of inventory and COGS using LIFO basis. In last in first…

Q: Federated Manufacturing Incorporated (FMl) produces electronic components in three divisions:…

A: Unit Cost from Internal Sale=Price to outside buyers+Contribution margin lost per unit

Q: itor needs to obtain an understanding of the overall internal control of a company, the auditor…

A: Auditor refers to the individual or an entity whose job is to check and collect all the data and…

Q: Botella Company produces plastic bottles. The unit for costing purposes is a case of 18 bottles.The…

A: Calculation of Material Price variance Material price variance = (Standard price per lb. of material…

Q: Required information [The following information applies to the questions displayed below.] Dain's…

A: Solution Depreciation means a reduction in the value of a tangible assets i.e building , plant &…

Q: a. On 5/15/2020, purchased 4,000 shares of its own common stock at $20 per share. b. On 7/10/2020,…

A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Q: Accounts payable S 1,200 Miscellaneous expense S 480 Accounts receivable 12,340 Office expense 440…

A: Formula: Net income = Revenues - Expenses

Q: CCC Partnership borrowed $100,000 on a five-year recourse note from a local bank. It also purchased…

A: A form of business under which two or more partners are ready to start their business and also able…

Q: on relates to this agreement. rchase the equipment for $16, at Jan Way will exercise this o 120,000…

A: The journal entry is given as,

Q: $12,000 $10,500 Accounts payable. $3,900 Equipment.. Salarles expense Accounts recelvable. V.…

A: Formula: Net income = Total revenues - Total expenses

Q: On January 1, 2019, Penn Incorporated paid $350,000 for 70% of Sylvania Company's outstanding…

A: “Since you have posted a question with many sub-parts, we will solve three sub-parts for you. To get…

Q: The amount of subjectivity involved in establishing fair value estimates can be complex for…

A: GIVEN The amount of subjectivity involved in establishing fair value estimates can be complex for…

Q: entxies JOUnal Green Company sells goods to Thumb Inc. on account on January 1, 2017.The goods have…

A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Q: IFRS11-1 On May 10, Romano Corporation issues 1,000 shares of $10 par value ordinary shares for cash…

A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Q: Which of the following is an indirect cost?a. The cost of denim in a jeans factoryb. The cost of…

A: Indirect costs would be those that cannot be linked to a specific cost object or cost source. Costs…

Q: Marital Aid Inc, owned by four individual shareholders, shows the following result for the year just…

A: In this question, we calculate the Personal Holding Company Income for Marital.

Q: On December 31, 2020, Sack Port Ventures Inc. borrowed $103,000 by signing a four-year, 8.0%…

A: Formula: Amount of principal in each payment = Total borrowed amount / Number of years of the note

Question

correct answer: 12,490,317

A firm has two alternatives for the improvement of its current production system. The data are as follows:
Machlne A
Machine B
First Cost - P5M First cost - P8,914,223
Annual operating cost - PO.2M Annual operating cost - P281,740
Service life - 5 years
Service life - 6 years
Salvage value - P50T
Salvage value - P174,071
Using the Present Value (PV) Method and with the firm's interest rate of 24% cpd. annually, what is the PV
of Machine B?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

how did u get that answer in the table? the present value? please solve

Solution

by Bartleby Expert

SEE SOLUTION

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

A company is spending 70,000 per year for inspecting, 60,000 per year for purchasing, and 56,000 per year for reworking products. What is a good estimate of non-value-added costs? a. 126,000 b. 70,000 c. 56,000 d. 130,000
The production of a new product required Zion Manufacturing Co. to lease additional plant facilities. Based on studies, the following data have been made available: Estimated annual sales24,000 units Selling expenses are expected to be 5% of sales, and net income is to amount to 2.00 per unit. Required: 1. Calculate the selling price per unit. (Hint: Let X equal the selling price and express selling expense as a percentage of X.) 2. Prepare an absorption costing income statement for the year ended December 31, 2016. 3. Calculate the break-even point expressed in dollars and in units, assuming that administrative expense and factory overhead are all fixed but other costs are fully variable.
Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000 for reworking products. A good estimate of nonvalue-added costs would be a. 70,000. b. 130,000. c. 40,000. d. 90,000. e. 100,000.
Average rate of returncost savings Maui Fabricators Inc. is considering an investment in equipment that will replace direct labor. The equipment has a cost of 125,000 with a 15,000 residual value and an eight-year life. The equipment will replace one employee who has an average wage of 28,000 per year. In addition, the equipment will have operating and energy costs of 5,150 per year. Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment.
Gardner Denver Company is considering the purchase of a new piece of factory equipment that will cost $420,000 and will generate $95,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further Instructions on internal rate of return in Excel, see Appendix C.
Caduceus Company is considering the purchase of a new piece of factory equipment that will cost $565,000 and will generate $135,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return In Excel, see Appendix C.
Home Garden Inc. is considering the construction of a distribution warehouse in West Virginia to service its east coast stores based on the following estimates: a. Determine the net present value of building the warehouse, assuming a construction cost of 20,000,000, an annual net cost savings of 4,000,000, and a desired rate of return of 14%. Use the present value tables provided in Appendix A. b. Determine the net present value of building the warehouse, assuming a construction cost of 25,000,000, an annual net cost savings of 2,500,000, and a desired rate of return of 14%. Use the present value tables provided in Appendix A. c. Interpret the results of parts (a) and (b).
Choose the correct letter of answer: The following price and cost data are given for Company E: Selling price per unit P25.00, Variable cost per unit P10.00 and Fixed Operating Costs P30,000.00. Calculate the break-even point and the the cash break-even point, assuming P5,000.00 of the firm's fixed cost is for depreciation. a. 500 units and 467 unitsb. 1000 units and 857 unitsc. 1500 units and 1287 unitsd. 2000 units and 1,667 unitse. 2500 units and 2187 units
‏A firm is considering three mutually exclusive alternatives as part of a production improvement program . The alternatives are : Alternative A ( i = 12 % ) B ( i = 10 % ) C ( i = 15 % ) Installation Cost ( U ) 200,000 270,000 190,000 Uniform Annual 30,750 40,500 30,250 Benefit ( U ) Useful life in years 12 15 14 Which of the above should be chosen
SOWSEY Company is considering the addition of a new product to its current product lines. The expected cost and revenue data for the new product are as follows: Annual Sales 2,500 units Selling Price per unit P304 Variable Costs per unit: Production P125 Selling P49 Avoidable fixed costs per year: Production P50,000 Selling P75,000 Allocated common corporate costs per year P55,000 If the new product is added, the combined contribution margin of the other existing products lines is expected to drop P65,000 per year. Total common corporate costs would be unaffected by the decision of whether to add the new product. What is the lowest selling price per unit that could be charged for the new product line and still make an additional P2 income per unit?
Mowbot's management is evaluating new proposals for production machines from three companies: Brawn Up front cost Annual cost saving Life (years) $ $ Apex (150,000) $ 63,000 $ 4 (200,000) $ 81,000 $ Cameo (250,000)102,000 4 4 Use incremental present worth analysis to decide which alternative should be recommended. MARR is 18%.
EXCEL, an equipment costing $100,000 has a useful life of 6 years. It has a resale value of $8,000. Annual costs will be $7,000 for each of the year. Another equipment, APLUS costing $120,000 has a useful life of eight years, after which time its estimated resale value will be $25,000. Annual costs will be $5,000 for the first three years and then $8,000 for each of the next five years. Compute the annual equivalent cost for each equipment using a discount rate of 10%. Which equipment will be your choice and why? Round your answers to 2 decimal points.