Machine A Machine B First cost, $ - 15,000 -25,000 Annual operating cost, $ per year Salvage value, $ Life, years -1,600 -400 3,000 6,000 3 6
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For the cash flows shown and in preparation for a PW-based
for (a) year 0, (b) year 3, and (c) year 6.
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- Given the two machines’ data Machine A Machine B First Cost P8,000.00 P14,000.00 Salvage value 0 2,000.00 Annual operation 3,000.00 2,400.00 Annual maintenance 1,200.00 1,000.00 Taxes and insurance 3% 3% Life, years 10 15 Money is worth at least 16% Using equivalent uniform annual cost method, determine the value of alternative A and alternative B:Conduits made of Steel First Cost Php 80,331 Estimated Life 40 years Scrap Value none Annual Maintenance Php 237 Interest 0.074 What is the Capitalized Cost? *4 decimal points*Service Output MethodGiven:FC = 800,000.00 pesosSV = 200,000.00 pesosn = 5 yearsOutput in year 1 = 300 unitsTotal output in 5 yrs = 1000 unitsa. Depreciation per unit = ?b. Book Value at year 1= ?
- 1 An equipment costs P45,000 with an economic life of 18 years. Its salvage value is P12,000. Maintenance cost is done every 5 years for P6000. Operating cost is 4000 annually. Money is worth 12%. Compute for its capitalized cost.RLC Manufacturing is planning to purchase a cutting equipment. Information are as follows: Equipment 1 Equipment 2 First Cost P 12,000 P 18,000 Salvage Value P 600 P 2,000 Annual Operation P 3,200 P 2,500 Annual Maintenance P 1,200 P 1,000 Taxes & Insurance 3% 3% Life, years 10 15 Money is worth at least 16%. Which equipment should be selected? Use: Annual Cost Method. Ataxanddutyfreeimportationofa30-horsepowersandmillforpaint manufacturing costs P360,000, CIF Manila. Bank charges, arrester and brokerage cost P5,000. Foundation and installation costs were P25,000. Other incidental expenses amount to P20,000. Salvage value of the mill is estimated to be P60,000 after 20 years. Find the appraisal value of the mill using straight-line depreciation at the end of: a.) 10 years b.) 15 years
- Given the problem: Conduits made of Timber First Cost $ 50,025.34 Estimated Life 13 years Scrap Value $ 2,992 Annual Maintenance $ 1,301 Interest 0.086 What is the Capitalized Cost?24). from the following facts,for the sum of years digits what is given: cost : $15,000 residual value : $4000 est useful life: 4 years required: what is accumulated depreciation for the end of year 3original cost $425000, useful fife 5 years, current useful life 2years, remaining useful life 3 years, accumulated depreciation 195000,current book value 230,000 current disposal 120000, final disposal for the 3years is 0. what is the depreciation expense for year 1
- The equipment of DEF Company has the following data:Cost 1,100,000Salvage value 100,000Useful life 4 years20,000 units10,000 hoursDate acquired 01/01/x1Required: Determine the depreciation expense in 20x1 under the following methods:1. Sum-of-the-years’ digits method.2. Double declining balance method.3. Units of input method (DEF used 3,000 working hours for the product it manufactured for the year 20x1).4. Units of output method (DEF used 2,000 units of the product for the year 20x1).MACHINE A MACHINE B INITIAL COST R100 000 R110 000 EXPECTED ECONOMIC LIFE 5 YEARS 5 YEARS EXPECTED DISPOSAL/RESIDUAL VALUE R10 000 EXPECTED NET CASH INFLOWS R R END OF: YEAR 1 34 000 33 000 YEAR 2 27 000 33 000 YEAR 3 32 000 33 000 YEAR 4 30 000 33 000 YEAR 5 26 000 33 000 DEPRECIATION PER YEAR 18 000 22 000 COMPANY ESTIMATES COST CAPITAL = 14% 3)Calculate the net present value of each machineSum-of-the-year's-digits. Jon Seceda Furnace Corp. purchased machinery for $315,000 on May 1, 2020. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 240,000 units, and working hours of 25,000. During 2021, Seceda Corp. uses the machinery for 2,650 hours, and the machinery produces 25,500 units My understanding of the equation is (Cost-Salvage Value) x Depreciation Fraction = Depreciation Charge. My calculation: ($315,000-$15,000) x 10/55 = 54,545.45 Bartely's answer (which is correct): ($315,000-$15,000) x 10/55 x 4/12 = 18,181.81 ($315,000-$15,000) x 9/55 x 8/12 = 32,727.27 Sum-of-the-Years'-digits = 50,909.08 (add 18,181.81 and 32,727.27) My question is where does the fractions (4/12 and 8/12) come from?