In conducting an EVA analysis for year 2 for new equipment on its primary product line, Analogy, Inc., manufacturers of preassembled blower packages and other water treatment components, determined the EVA to be $28,000. Analogy uses an after-tax interest rate of 14% per year and its Te is 35%. The new equipment had a first cost of $550,000 and was MACRS depreciated using a 3-year recovery period. Since the company CEO knew that the GI was $500,000, he asked you to determine the operating expenses (OE) associated with the equipment in year 2.

Q: An industrial plant bought a generator set for P90,000. Other expenses including installation…

A: * SOLUTION :-       The given data is,

Q: An industrial plant bought a generator set for P90,000. Other expenses including installation…

A: cost of Generator = 90,000 Installation Cost = 10,000 Therefore Book Value at starting = 90,000 +…

Q: An asset with a first cost of $9000 is depreciated using 5-year MACRS recovery. The CFBT is…

A: The cash flow after tax can be calculated using spreadsheet as follows:

Q: An asset purchased for $100,000 with S = $20,000 after 5 years was depreciated using the 5-year…

A: Option a: When the book value is less than the selling value of the depreciable asset, depreciation…

Q: Estimate the after-tax ROR for a project that has a before-tax ROR of 24%. Assume the company is in…

A: The rate of return after tax (RORAT) can be calculated by using the formula given below:

Q: An in-place machine with B = $120,000 was depreciated by MACRS over a 3-year period. The machine was…

A: The recovery rate for year 1 (RR1) is 0.3333 and year 2 (RR2) is 0.4445.

Q: Four years ago, Sierra Instruments of Monterey, California, spent $200,000 for equipment for…

A: (a) Spending (SP) is $200,000. Recovery rate for year 4 (RR4) is 0.0741. Gross income (GI) is…

Q: An asset with a first cost of $300,000 is depreciated by the MACRS method using a 5-year recovery…

A: The economic value added (EVA) is a measure along with market value added to evaluate management’s…

Q: After 8 years of use, the heavy-truck engineoverhaul equipment at Pete’s Truck Repair was evaluated…

A: Time period is denoted by ‘N’ and NAAR is denoted by ‘i’. Annual value of defender is $1,200. The…

Q: A piece of machinery at a maunfacturing plant has a cost basis of $50,000, and a salvage value of…

A: Salvage value is the expected book value of an asset after depreciation has been applied, depending…

Q: Equipment associated with manufacturing small railcars had the first cost of $170,000 with an…

A: MACRS: It means the current tax depreciation system in the United States.

Q: All of the following statements about the Alternative Depreciation System (ADS) are true, except:…

A: Que. All of the following statements about the AlternativeDepreciation System (ADS) are true,…

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: Depreciation refers to the fall in values of the assets with the passage of time. The concept sets…

Q: A gas-powered electric generator is purchased by a public utility as part of an expansion program.…

A: During the useful life of a physical asset, the asset's cost is depreciated using an accounting…

Q: A wood products company has decided to purchase new logging equipment for $100,000 with a trade-in…

A: Here we calculate the depreciable  life and choose the correct option by using the given information…

Q: Last month, HighPower, which specializes in wind power plant design and engineering, made a capital…

A: The taxable income increases to the equal value of DR, since the MACRS book value at year 5 becomes…

Q: A piece of equipment purchased at a cost $25 000 generated new income of $80,000 per year, witha…

A: Depreciation means a continuous fall in the value of an asset due to its use, wear and tear.

Q: A plant manager for a fiber optics cable manufacturing company knows that the remaining capital…

A: The first cost (FC) is $80,000. Depreciation lifer (n) is 5. Salvage value (SV) is 25 percent to the…

Q: Raytheon wishes to use an automated environmental chamber in the manufacture of electronic…

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

Q: A manufacturing company purchased a new equipment for ₱53,000 and paid ₱1,500 for freight and…

A:

Q: A certain office equipment has a first cost of PhP 20,00 and has a salvage value of PhP 1,000 at the…

A: First Cost = 20,000 Salvage value = 1,000 Time period = 10

Q: The market value of a presently owned machine lin a wind turbine manufacturing plant is $130,000. It…

A: * SOLUTION :-  (2) Given that , The market value is  = $130000. Annual operating cost is = $63000.…

Q: A machine is purchased for P600,000 with a salvage value of P 85,000 after 25 years. What is the…

A: Machine cost = 600000 Salvage value = 85000 Life of asset = 25 years Depreciation = cost  - salvage…

Q: An energy production company has the following information regarding the acquisition of new gas-…

A: Introduction: An energy production company has the following information

Q: A new industrial vacuum for electronic factory activities has a purchased value of $50, 000 and…

A: The declining balance method refers to an accelerated depreciation method that records larger…

Q: Halcrow Yolles purchased equipment for new highway construction in Manitoba, Canada, costing…

A: Purchase price = 500,000 Salvage value = 50,000 N = 5years SL method, Depreciation = (Purchasing…

Q: A wood products company has decided to purchase new logging equipment for $100,000 with a trade-in…

A: The MACRS, or, Modified Accelerated Cost Recovery System is defined as the system of depreciation…

Q: Your self-employed friend tells you that he is able to legally use depreciation write-off on his…

A: Depreciation is a reduction in the fixed assets' book value. Depreciation is the process by which…

Q: Reliant Electric Company has erected a large portable building with a first cost of $255,000 and an…

A: a. First cost (FC) is $255,000. Salvage value (SV) is $50,000. Time period (n) is 25. The book value…

Q: A certain newly created company installed a 10,000kW electric generating plant at a cost of P430 per…

A: Depreciation can be characterized as a proceeding, long-lasting and slow decline in the book value…

Q: An after-tax analysis for a new $50,000 machine proposed for a fiber optics manufacturing line is in…

A: To find the MACR for 6 year period , yearly depreciation rates used are : Year  Dep % 0 0 1…

Q: has a cost of $53,600, lasts 9 years with no salvage value, and costs $150,000 per year in operating…

A:

Q: A manufacturing company makes it a policy that for every new equipment purchased, the annual…

A: The largest change of depreciation using the SYD method: d1=(C0-Cn)nΣ years0.25C0=C0nΣ yearsΣ years…

Q: The after-tax analysis for a $60,000 investment with associated gross income minus expenses (GI - E)…

A: If initial value, P and salvage value, S is nil, then the equation is : CFAT = (GI-E) - [(GI-E)-D] x…

Q: quipment associated with manufacturing small railcars had a first cost of $170,000 with an expected…

A: Depreciation as per straight line method =[cost-salvage]/useful life                             = […

Q: An asset that is book-depreciated over a 5-year period by the straight line method has C3 = P…

A:

Q: Hempstead Industries has a new milling machine with B = $110,000, n = 10 years, and S = $10,000.…

A: The book value refers to the value at which the asset is posted in the company’s financial…

Q: Bison Gear and Engineering of St Charles, IL, makes sensorless and brushless dc gear motors suited…

A: Depreciation rate under 5-year recovery period:

Q: Youngblood Shipbuilding Yard just purchased $1 million in capital equipment for ship repairing…

A: a. Cost (C) is $1,000,000. Salvage value (S) is $150,000. The recovery rate (RR) for year 3 is…

Q: A piece of machinery at a maunfacturing plant has a cost basis of $44,000, and a salvage value of…

A: A continuous, permanent, and steady reduction in the book value of fixed assets is referred to as…

Q: A contractor imported a bulldozer paying P350k to the manufacturer, freight & insurance charges…

A:

Q: Freeman Engineering paid $40,000 for specialized equipment for use with their new global positioning…

A: A depreciation scheme used for tax reasons in the United States is the modified accelerated cost…

Q: A machine that had a first cost of $120,000 was depreciated by the MACRS method over a 3-year…

A: Given, A machine that had a first cost of $120,000  was depreciated by using Modified Accelerated…

Q: An asset is purchased for 108882. It is estimated life is 10 years, after which it will be sold for…

A: Under the SYD method, the depreciation rate percentage for each year is calculated as the number of…

Q: Rayonier Forrest Resources purchased a small tract of timberland for $70,000 that contained 25,000…

A: The formula for calculating depletion deduction for year 1 is shown below.

Q: Alpha Tec h has decided to purchase a new drilling equipment for $550.000. The equipment will be…

A: Straight-line method: Under the straight-line method of depreciation, the same amount of…

Q: Kobi Technologies book-depreciated an asset at $27,500 per year for 4 years using the straight line…

A: a. Salvage value can be calculated by using the following formula:

Q: Cebu Pacific purchased a new aircraft engine diagnostics equipment for its maintenance support…

A: Depreciation refers to two aspects of the one concept: first, is the actual decrease in fair value…