Machine M Machine N $ 25,000 5 years $3,000 $25,000 4 years $4,000 $11,000 $3,500 Initial Cost Estimated Life Salvage Value Annual Receipts $10,000 $3,500 Annual Disbursements
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Which of the two machines must be selected? Why? (i=10%)
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- 3. An Industrial plant bought a generator set for P90,000. Other expenses including installation amounted to P10,000. The generator is to have 17 years with a salvage value at the end of life of P5,000. Determine the book value at the end of 12 years by the following method;Declining balance method:P12,068P14,393P10.118P8,483Sinking fund method at 12% P59.860P53,100P45,529P65.896 SHOW YOUR SOLUTIONS PLEASE1 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.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 machine
- Problem 6Four, Inc. provided the following balances at the end of the current year:Wasting asset, at cost P20,000,000Accumulated depletion 2,500,000Share capital 50,000,000Capital liquidated 1,800,000Retained earnings 1,500,000Depletion based on 50,000 units at P20 per unit 1,000,000Inventory of resource deposit 100,000Required:a. Compute the maximum dividend that can be declared.b. Prepare the journal entry to record the declaration of P2,000,000 dividend.A P1, 500, 000.00 equipment has an estimated life of 20 years with a book value of P 250, 000.00 at the end of the period. What is the depreciation charge and its book value after 10 years using the sinking fund method? i= 8% Given: Required: Solution: refer to this textbook: https://drive.google.com/file/d/16J6M6RHBZ22NDaog_9DSXMgYb4qFu7T3/view?usp=sharingAir handling equipment that costs P12, 000 has a life of eight years with a P2, 000 salvage value. Assume interest at 4.5% compounded annually. The book value at the end of three years is P6, 166.67. What method was used to calculate the book value? Double Declining Balance Method Sum of Year's Digit Method Sinking Fund Method Declining Balance Method
- A company bought an equipment fee for P56,000. Other expenses including installation amounted to P4.000. The equipment is expected to have a life of 16 years with a salvage value of 10% of the original cost. Determine the book value at the end of 12 years by straight line methods and sinking fund methods at 12% interest.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% 1) Calculate the payback period for Machine A and B (answers must be expressed in years, monthsand days).An industrial plant bought a generator set for P90,000. Other expenses including installation amounted to P10,000. The generator set is to have a life of 17 years with a salvage value at the end of life of P5,000. Determine the depreciation charge during the 13th year and the book value at the end of 13 years by the (a) declining balance method (b) SLM (c) sinking fund method if i=4% and (d) SYD method.
- 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: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= ?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*
