installation costs him P31,000.00 If the life of the equipment with an estimated salvage value of P120,000. What is the bod 8 years using SLM. O P323,000 O P244,000
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- A recapping plant is planning to acquire a new Diesel generating set to replace its resent unitwhich they run during brownouts. The new set would cost ₱ 135,000 with a five (5) year-life,and no estimated salvage value. Variable cost would be ₱ 150,000 a year.The old generating set has a book value of ₱ 75,000 and a remaining life of 5 years. Itsdisposal value now is ₱ 7,500 but it would be zero after 5 years. Variable operating cost wouldbe ₱187,500 a year. Money is worth 10%.Which is profitable, to buy new generator or retain the old set? Support answer using:a) Equivalent Uniform Annual Cost (EUAC) MethodA recapping plant is planning to acquire a new Diesel generating set to replace its resent unitwhich they run during brownouts. The new set would cost ₱ 135,000 with a five (5) year-life,and no estimated salvage value. Variable cost would be ₱ 150,000 a year.The old generating set has a book value of ₱ 75,000 and a remaining life of 5 years. Itsdisposal value now is ₱ 7,500 but it would be zero after 5 years. Variable operating cost wouldbe ₱187,500 a year. Money is worth 10%.Which is profitable, to buy new generator or retain the old set? Support answer using:a) Annual Cost Methodb) Equivalent Uniform Annual Cost Methoduppose that you purchased a HVAC system five years ago for $75, 000. The O&Mcosts are $15, 000 this year and are expected to increase by $1, 000 each year for the next five yearsthen remain the same for the following years.The current salvage value of the system is $15, 000; salvage value after one year is estimated tobe $12, 000; after two years, $11, 000; after three years, $10, 000; after four years, $9, 000; and so on.A new industrial HVAC system is available for purchase at a price of $95, 000, including instal-lation. The market value of the new system will decrease at a rate of 15% each year. The O&Mcosts are expected to be $1, 000 in the first year, and will increase at a rate of 20% each year. Themaximum service life of the new system is 10 years. Assume that your company uses an interestrate of 10% for all project evaluations.(a) Find the remaining economic life of the currently owned asset.(b) What is the economic service life of the new system?(c) Use the…
- Consider a five-year MACRS asset, which can be purchased at $80.000. Thesalvage value of this asset is expected to be $42,000 at the end of three years.What is the amount of gain (or loss) when the asset is disposed of at the end of three years?(a) Gain $11,280(b) Gain $9,860(c) Loss $9,860(d) Gain $18,960A lift truck priced at $38,000 is acquired bytrading in a similar lift truck and paying cash for theM09_PARK9091_06_GE_C09.indd 506 10/22/15 5:16 PMProblems 507remaining balance. Assuming that the trade-in allowance is $9,000 and the book value of the asset tradedin is $7,808, what is the cost basis of the new assetfor the computation of depreciation for tax purposes?Peller machine losses 10% of its value each year. The machine costs P 2,000 originally. Find the book value at the end of 5 years. a. P1,312.20 b. P1,1180.98 c. P1,620.00 d. P1,458.00
- A harvester was purchased 4 years ago for $100,000. The current market value is $45,000, which will decline as follows over the next 5 years: $40,000, $33,500, $28,000, $24,000, and $17,000. The O & M costs are estimated to be $16,000 this year. These costs are expected to increase by $5000 per year starting year 2. MARR = 10% The foregone interest in year 4 is _______________.A printing press was purchased 4 years ago for $100,000. The current market value is $45,000, which will decline as follows over the next 5 years: $40,000, $33,500, $28,000, $24,000, and $17,000. The O & M costs are estimated to be $16,000 this year. These costs are expected to increase by $5000 per year starting year 2. MARR = 10% The marginal cost for defender in year 2 is ____________. A. $34,600 B. $31,500 C. $ 33,875 D. $35,400PLEASE WRITE YOUR SOLUTION ON A PAPER, THANK YOU A Contractor imported a bulldozer for his job, paying P 350,000 to the Manufacturer. Freight andInsurance charges amounted to P 18,000; customs’ broker’s fees and arrastre services, P 8,500;taxes, permits and other expenses, P 35,000. If the contractor estimates the life of the bulldozer tobe 10 years with a salvage value of P 20,000, determine the book value at the end of 8 years, a. using the Double Declining Balance Method. b. using the Declining Balance Method. c. using the Sinking Fund Method, i = 10% d. using the Sum of the Years Method
- A company is considering purchasing a machine for manufacturing that costs $30,000. The salvage value and O&M costs for the next 7 years is given in the following table. The Equivalent Uniform Annual Cost (EUAC) is computed for each year assuming the equipment was sold at the end of that year and a MARR of 6%. What is the optimal economic life of the machine? Yr Salvage Value O&M Costs EUAC 1 $15,000 $1,200 $18,000 2 $14,400 $2,100 $11,909 3 $13,800 $3,000 $10,753 4 $13,200 $3,900 $10.825 5 $12,600 $4,800 $11,382 6 $12,000 $5,700 $12,178 7 $11,400 $6,600 $13,106A new bottle-capping machine costs $45 000, including $5000 for installation. The machine is expected to have a useful life of eight years with no salvage value at that time (assume straight-line depreciation). Operating and maintenance costs are expected to be $3000 for the first year, increasing by $1000 each year thereafter. Interest is 12 percent. What is the economic life of the bottle capper?A Machine costs ₱80,000 and an estimated life of 10 years with a salvage value of ₱5,000. What is the book value after 5 years using Double Declining Balance Method. Answer: BV5=₱26,214.40Show Solution