In anticipation of a much bigger volume of business after 10 years, a fabrication company purchased an adjacent lot for its expansion program where it hopes to put up a building projected to cost P4,000,000 when it will be constructed 10 years after. To provide for the required capital expense, it plans to put up a sinking fund for the purpose. How much must the company deposit each year if the interest to be earned is computed at 15%

Q: A newly-built business property, containing space for a store and two offices, can be purchased for…

A: a. Annual revenue = P458,460Annual cost:Depreciation = (P1,200,000 - P700,000) / (F/A, 20%,10) =…

Q: EU Corporation plans to construct its own building at the end of 10 years for an estimated cost of…

A: The concept of the time value of money (TVM) states that money accessible now is valued more than a…

Q: A carpetmanufacturer inGeorgia plans to expand its plant for a capital investment of $500,000. The…

A: In this case , we will  calculate the production at zero NPV . It means it is break even point of…

Q: On August 1, Rantoul Stores Inc. is considering leasing a building and purchasing the necessary…

A: Solution 1: Differential Analysis -  Rantoul Stores Inc. Operate Retail (Alt 1) or Invest in…

Q: An investment of $ 170,000 was made 6 years ago for a construction machine. Annual revenue from the…

A: Given: Initial cost $170000 Annual revemuw = $40000 Annual maintenance and repair expense would…

Q: Baird Bros. Construction is considering the purchase of a machine at a cost of $202,000. The machine…

A: Answer a) Calculation of Net Present Value of Cash Flows Net Present Value = Present value of cash…

Q: ELJ Corporation plans to construct its own building at the end of 10 years for an estimated cost of…

A: Given: Years =10 Cost = P15,000,000 Interest rate = 13% Future value = P24,000,000

Q: Recent sales of some real estate and record profits make it possible for a manufacturer to set aside…

A: Present value of fund (PV) = $ 1,100,000 Interest rate = 6.3% Semi annual rate (r) = 6.3%/2 = 3.15%…

Q: A reactor will be purchased for $ 30,000 for use in a chemical process. The life of the reactor is…

A: Depreciation is a decrease in cost of an equipment or machine due to obsolescence or passage of…

Q: engineering company expects to expand its plant facilities in 6 years at an estimated cost of…

A: a) Solved using Financial Calculator  N = 6 years * 4 = 24 I/Y = 10%/4 = 2.5% FV = 68,000 CPT PMT =…

Q: On July 1, Coastal Distribution Company is considering leasing a building and buying the…

A:

Q: re to made to the fund

A: Money Required (Future Value) = 40,000 Present Value (value at start) = 0 N = 3 years Quarterly…

Q: or the first 6 years and then P130,000 each year thereafter for operating expenses with interest at…

A: Present worth is present value of future cost.

Q: Simon Machine Tools Company is considering the purchase of a new set ofmachine tools to process…

A:

Q: A company, XYZ, bought a machine for BD 250,000 which has a useful life of 10 years and can be sold…

A: Machine has a fixed useful life after which it has to be dismantled. The value of asset can be…

Q: A company needs 60,000 in five years to buy a new equipment. In order to accumulate this, s a…

A: Given information : Expected amount 60000 Time period 5 Number of payments 3 Interest rate…

Q: Armor Investment Company is considering the acquisition of a heavily depreciated building on 10…

A: Given: The building gets depreciated on 10 acres of land. The cash flow is $100,000 Rate of interest…

Q: wagger Manufacturing Corporation (SMC) is planning to invest in new machinery to produce a new…

A: Capital Budgeting involves long-term planning and monitoring of capital expenditure, besides…

Q: A manufacturing company has determined that it will need $700,000 in 6 years for a new roof on its…

A: A sinking fund can be referred to as a type of fund specially created to pay off debts. It is a fund…

Q: Minolta Machine Shop just purchased a computer-controlled vertical drillpress for $100,000. The…

A:

Q: J&M Manufacturing plans on purchasing a new assembly machine for $32,000 to automate one of its…

A: Part (a): Calculation of payback period (investment plus installment costs): Answer: Payback period…

Q: Rooney, Incorporated is considering the purchase of a new machine costing $700,000. The machine's…

A: Rooney is considering the purchase of new machine. The decision as to whether the machine should be…

Q: On July 1, Coastal Distribution Company is considering leasing a building and buying the necessary…

A: In differential analysis, the differential revenue that could be gained or differential cost that…

Q: A company needs 60,000 in five years to buy a new equipment. In order to accumulate this, sum a…

A: Accumulated amount needed = 60000 after 5 years Let the annual payment = A r = 18%

Q: An injection molding machine can be purchased and installed for $90,000. It is in the seven-year GDS…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: A project requires an initial investment of $150,000, to be depreciated straight-line over 3 years…

A: NPV computes the existing value of future benefits by discounting future worth with a stated…

Q: a. The Payback Period. b. The Accounting Rate of Return. c. The Net Present Value. d. The…

A:

Q: CC Company invested in a project which required an investment of P10,000 with a salvage value of…

A: GIVEN   CC Company invested in a project which required an investment of P10,000 with a salvage…

Q: Pads Corp. is contemplating the purchase of a large stamping machine which will cost Php 500.000.…

A: The question is based on the concept of Depreciation Accounting.

Q: In anticipation of a much bigger volume of business after 10 years, a fabrication company purchased…

A: Annuity is the fixed sum of money paid to a bank or a financial institution each for the rest of…

Q: A business set up a sinking fund so they will have a 62,000.00 to pay for a replacement piece of…

A: Please refer to the image below.

Q: De La Salle University buys a steam generator for P250,000. The shipping and installation fees…

A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…

Q: Abc plans to construct an adiitional building at the end of 10 years at an estimated cost of…

A: first calculate the payments for the first 5 years N = 10, FV = 5,000,000, rate = 13%, PV = 0 use…

Q: The management of a condominium association anticipates a capital expenditure of $150,000 in 3 years…

A: Given that, Required Capital Expenditure (FV)=$1,50,000 Duration (n)=3*12=36 Rate of…

Q: Robert Cooper is considering purchasing apiece of business rental property containing storesand…

A: The property belongs to a 39-year real-property class of MACRS. The property will be in use for a…

Q: Tyu plans to construct an adiitional building at the end of 10 years at an estimated cost of…

A: Use PMT function in Excel with the following inputs N = 10, PV = 0, FV = 5000000, rate = 13% annual…

Q: XYZ plans to construct an additional building at the end of 10 years fo an estimated cost of…

A: Here we will use the concept of time value of money. As per the concept of time value of money it is…

Q: On August 1, Rantoul Stores Inc. is considering leasing a building and purchasing the necessary…

A: Revenue from Operate Retail Store = $300,000*6 years + $400,000*9 years…

Q: a company plans to build a new office building in 5 years. How much should they set aside now to…

A: Answer 1) Calculation of amount to be set aside today if rate of return is 5% Amount to be invested…

Q: Grover Contracting, Inc., is considering the purchase of a new cement truck costing $150,000. Grover…

A: Given: Year Increase in income Increase in net cash flows 0 -$150,000 -$150,000 1 $10,000…

Q: A company, XYZ, bought a machine for BD 250,000 which has a useful life of 10 years and can be sold…

A: Sinking fund: A sinking fund is a fund that is set aside for future repayment purposes of debt or…

Q: An injection molding machine can be purchased and installed for $90,000. It is in the seven-year GDS…

A: Purchase and installment cost=$90000 MARR= 15%/year Income tax rate= 40% Amount=$15000

Q: A small research device can be purchased for $10,000 and depreciated by 5-year MACRS depreciation.…

A: NPV: NPV means net present value it defines a difference of a certain time period between cash…

Q: A project requires an initial investment of $150,000, to be depreciated straight-line over 3 years…

A: Given Data: Project cost $1,50,000.00 Life(years) 3 Revenue $1,50,000.00 Expenses $ 85,000…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.