Pears Company purchased a new machine on January 1 of this year for an amount of P90,000, with an estimated useful life of 5 years and a salvage value of P10,000. The machine will be depreciated using the straight-line method. The machine is expected to produce cash flows from operations, net of income taxes of P36,000 a year in each of the next 5 years. The new machine’s salvage value is P20,000 in years 1 and 2, and P15,000 in years 3 and 4. What will be the bail-out period (rounded) for this new machine? 1.4 years 1.9 years 2.2 years 3.4 years
Pears Company purchased a new machine on January 1 of this year for an amount of P90,000, with an estimated useful life of 5 years and a salvage value of P10,000. The machine will be depreciated using the straight-line method. The machine is expected to produce cash flows from operations, net of income taxes of P36,000 a year in each of the next 5 years. The new machine’s salvage value is P20,000 in years 1 and 2, and P15,000 in years 3 and 4. What will be the bail-out period (rounded) for this new machine? 1.4 years 1.9 years 2.2 years 3.4 years
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter9: Depreciation (deprec)
Section: Chapter Questions
Problem 1R: Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an...
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Pears Company purchased a new machine on January 1 of this year for an amount of P90,000, with an estimated useful life of 5 years and a salvage value of P10,000. The machine will be
- 1.4 years
- 1.9 years
- 2.2 years
- 3.4 years
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