Q: 1
A: Given, Defender Challenger Initial cost 67000 60000 Operational cost 15000 9000 Market…
Q: A machine purchased 3 years ago for $140,000 is now too slow to meet growing demand. The machine can…
A: Annual worth or AW is referred to as the easy way of understanding the annual amount, for instance,…
Q: The Darlington Equipment Company purchased a machine 5 years ago, prior to the TCJA, at a cost of…
A: a. Initial cash flow at Year 0 = - $ 122,000 Book value of the old machine today = $ 45,000 Gain on…
Q: Economic Life Exercises 1. A machine costs $ 10,000 and is expected to be scrapped for $ 1,500 in…
A: initial cost = 10,000 Salvage value = 1,500 Operating cost = 3,500 increases by 400 Operating income…
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: A defender was installed 10 years ago at a capital investment cost of $67,000. It presently has a…
A: For annual worth analysis of costs we take following steps : Derive Cash flow including…
Q: An auto-part manufacturer is faced with the prospect of replacing its old robot, which has been used…
A: Equate of both the machine equivalent value, the required price of the new machine and this can be…
Q: A machine costs $ 10,000 and is expected to be scrapped for $ 1,500 in the moment he retires.…
A: Given:- Cost of machine = $10000 scrap value = $1500 operating expenses at year 1 = $3500 this…
Q: Problem 1: A dump truck was bought for P750,000 three years ago. It will have a salvage value of…
A: Accrued depreciation at end of 3rd year: =(Cost- Salvage)x [(1+i%)3 -1]/[(1+i)5 -1] here i =…
Q: XYZ Company purchased a machine six years ago for $350,000. Last year a replacement study was…
A: the minimum acceptable rate of return, often abbreviated MARR, or hurdle rate is the minimum rate…
Q: Komatsu Cutting Technologies is considering replacing one of its CNC machines with one that is newer…
A: Calculation of cash flows associated with retaining the old machine in years 1 to 2: Initial…
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: Wanting to acquire a new generator set for the plant to replace the unit that they currently use.…
A: Given information New generator set has initial investment=P150000 Production cost per year=P175000…
Q: These are sold for the last time, and these are not for further processing or manufacturing.
A: GDP refers to the value of goods and services that are produced in an economy over a period of time.…
Q: A certain machine has book value of P173,205.08 after 5 years and P82,187.59 after 8 years. The book…
A: Book value refers to the asset value as per the balance sheet account balance. It is the actual…
Q: Determine the original basis of a machine that is used for making spill containment pallets if its…
A: Given information: The book value in year 3 is $25,000.The machine has a 5-year life, thus, the…
Q: Compare the defender and challenger based on the opportunity-cost?
A: Opportunity cost refers to the given up benefit in the process of getting other benefits.
Q: Determine the first cost of a machine that is used for making spill-containment pallets if its book…
A: Depreciation rate can be calculated as follows: Thus, the depreciation rate is 0.4
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: When should the eventual salvage value of an asset be estimated?
A: The salvage value is calculated by using the formula is represented as follows: Here, The original…
Q: The existing asset’s economic life can be found if certain estimates about it can be made. Assuming…
A: The economic life of an asset is the major thing a company is concerned with. If the economic life…
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 company is considering buying a new equipment. They have a choice between two models. The company…
A: Given, Two Models : A and B
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: n equipment costs $120,000 and has an estimated salvage value of S 20000 at the end of 10 years of…
A: Salvage value is the estimated resale value of an asset at the end of its useful life. It is…
Q: 3. A machine costing P 100,000 has an estimated scrap value of P 10, 000 at the end of its economic…
A: * SOLUTION :- As per guidelines we write first problem solution only Rest are re-post please.…
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: 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: A depletable resource has an inverse demand function of P = 80-0.5q and a marginal extraction cost…
A: Given demand Function P=80-0.5Q Marginal Extraction cost=420 Discount rate=10% Available stock=200…
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: A second hand value, or it is the sum of money which the machine will brind when sold to some other…
A: Market value is the value of the asset when sold in the market as second hand. Whereas Salvage…
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 company is currently producing chemical compounds by a process installed 10 years ago at a cost of…
A: The annual cost (AC) of the defender can be calculated as follows. The calculated value shows the…
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: You purchased a machine four years ago at a cost of $5,000. It has a book value of $1,300. It can be…
A: The cost of the machine after 4 years is $5,000 and it has a book value of $1,300. It can be sold…
Q: Briefly explain what is meant by the defender/ challenger concept.
A: According to the replacement analysis, the existing asset is known as the defender, whereas the best…
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: A defender was installed 10 years ago at a capital investment cost of $75,000. It presently has a…
A: PLEASE FIND THE ANSWER BELOW. MARR: A minimum acceptable rate of return (MARR) is the minimum…
Q: An earth moving equipment that cost P 94,822 will have an estimated life of 10 years. Using…
A:
Q: nder was installed 10 years ago at a capital investment cost of $77,000. It presently has a market…
A: *Answer:
Q: The replacement of a laser cutting machine is being considered. The best available machine on market…
A: Given: Annual cost of current machine = 36,000 Interest Rate = 4% Operating Cost = 20,000 Salvage…
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: Define replacement analysis
A: Replacement analysis is a very important analysis in capital budgeting i.e. in the process…
Q: When dealing with infinite life time, the salvage value would be disregarded? True or false?
A: Salvage value is the value of an asset that is realized when it is sold at the end of the asset's…
Q: With the estimates shown below, Sarah needs to determine the trade-in (replacement) value of machine…
A: Given: Interest rate (i)=11% Number of years(n): X=3,Y=5 To find: Replacement Value
How can the economic life of the challenger be determined?
Step by step
Solved in 2 steps
- The existing asset’s economic life can be found if certain estimates about it can be made. Assuming those estimates prove to be exactly correct, one can accurately predict the year when the existing asset should be replaced, even if nothing is known about potential new assets. True or false? Explain.These are sold for the last time, and these are not for further processing or manufacturing.A machine cost P60,000 and the salvage value is 10,000 after 10 years. Find the book value after 7 years Double Declining Balance Method.
- the 50,000 from the deprecation formula, is it the annual profit or is it the salvage value?Do the operating costs differ between the defender and challenger? Explain how?In a replacement study, the correct value to use when determining the purchase price of the challenger is: (a) Its first cost when it was purchased (b) Its first cost minus the trade-in value of the defender (c) Its first cost plus the trade-in value of the defender (d) The book value of the defender