processing plant consumed 600,000 kwh of electric energy annually and pays an average of ₱2.00 per kwh. A study is being made to generate its own power to supply the plant the energy required, and that the power plant installed would cost ₱2,000,000. Annual operation and maintenance, ₱800,000. Other expenses, ₱100,000 per year. Life of power plant is 15 years; salvage value at the end of life is ₱200,000; annual taxes and insurance, 6% of first cost; and rate of interest is 15%. Using the sinking fund method for depreciation, determine if the power plant is justifiable?

Q: A company is planning to purchase a machine that will cost $54,000 with a six-year life and no…

A: Payback period refers to the time period that is required to recover the initial cost. With the help…

Q: Cortino Company is planning to add a new product to its line. To manufacture this product, the…

A: Hey, since there are multiple requirements posted, we will answer first three requirements. If you…

Q: A machine costs Php 500,000 with a salvage value of Php 50,000. Its useful life is six years. The…

A: Depreciation is the decrease in the value of fixed tangible asset due to usage, obsolence or passage…

Q: Adams Company paid $92.000 to purchase a machine on January 1, Year 1. During Year 3, a…

A: An avoidable cost is one that will not be spent if a specific activity is not carried out. Unlike…

Q: Four years ago, an ore-crushing unit was installed at a mine which cost P81,000. Annual operating…

A: Capital Budgeting are the long term decisions an entity needs to take for the maximum benefits from…

Q: It costs P500,000.00 at the end of each year to maintain a section of Kenon Road in Baguio city. If…

A: Here, Current Annual Cost is P500,000 Required Annual Cost is P100,000 Interest Rate is 10%

Q: A retrofitted space-heating system is being considered for a small office building. The system can…

A: MARR = 15% Year Cash Flow  0 -110,000.00 1 30,070.00 2 30,070.00 3 30,070.00 4…

Q: The equipment needed to manufacture a product costs $1,000,000 to purchase. This equipment has a…

A: 1) Statement showing equivalent uniform annual cost associated with this equipment when 10.000 units…

Q: The Manila Gas Corporation is considering the purchase of a power trench digger for laying main…

A: We will be using the break-even analysis as it will help us determine whether the project has the…

Q: A company that sells computers has proposed to a public utility company that it purchase a small…

A: Replacement studies are an analysis involving the comparison of an existing and a proposed…

Q: A clothing plant consumed 600,000 kwh of electrie energy annually and pays an average of P2.05 per…

A: Present value of annuity Annuity is a series of equal payments at equal interval over a specified…

Q: .Calculate the NPV method and discount rate of 12%

A: Net Present Value (NPV) is a capital budgeting technique used for finding the profitability of the…

Q: Two stamping machines are under consideration for purchase by a metal recycling company. The manual…

A: Alternatives can be compared using various kind of analysis like present worth analysis, future…

Q: The Kimchi Company imported a new machine at a peso equivalent of P1,320,000. The company has to pay…

A: Initial cost of new machine = Purchase cost + Import duty + Purchase taxes + Transportation cost +…

Q: The MGC Company has a contract with a hauler to transport its naptha requirements of 3,600,000 liter…

A: `Rate of return shows the return earned by the company on the investment made by them.

Q: The cost of equipment to apply epoxy paint to a warehouse floor is $1400. Materials and supplies…

A: No of square feet that justify the equipment purchase be x.

Q: A 50-kilowatt gas turbine has an investment cost of $40,000. It costs another $14,000 for shipping,…

A: Formula used for (A/P,i%,n) is: Formula used for (A/F,i%,n) is:

Q: A machine costing P 95,000 is expected to produce 10,000 units of a certain products during its…

A: Depreciation on Fixed assets :      Depreciation expense is considered as the charge against the…

Q: A company is considering constructing a plant to manufacture a proposed new product. The land costs…

A: While considering the project, its net present value (NPV) shall be computed by discounting the cash…

Q: A company that sells has proposed to a small public utility company that it purchase a small…

A: Computation:

Q: The MGC Company has a contract with a hauler to transport its Naphtha requirements of 3,600,000…

A: The continual expenses incurred by the routine day-to-day operations of a firm are referred to as…

Q: Four years ago, an ore-crushing unit was installed at a mine which cost P81,000. Annual operating…

A: Computation of Annual cost: ●Old unit: Depreciation=[P26,000 - (81,000*0.12)]/[(1+i)n - 1)/ i]…

Q: YZ Company currently uses four machines to produce 400,000 units annually. The machines were bought…

A: Annual after tax cash flow the operating cash flow available after tax and depreciation.

Q: A small chemical manufacture company needs to replace an old high-shear mixer. Two different models…

A: Equivalent annual cost (EAC) is the estimate of the annual costs that a project incurs during its…

Q: How much is the initial cost of the new machine?

A: According to accounting concepts,  all the incidental expenses incurred to procure any assets should…

Q: Two stamping machines are under consideration for purchase by a metal recycling company. The manual…

A: Present value is the present worth of any sum of money to be received in the future at a specified…

Q: You are evaluating two different silicon wafer milling machines. The Techron I costs $285,000, has a…

A: Given: Techron 1 cost is $285,000 Techron 1 pre tax operating cost is $46,000 Techron 11 cost is…

Q: The Kimchi Company imported a new machine at a peso equivalent of P1,320,000. The company has to pay…

A: The following information given: Purchase price = P1,320,000 Import duties (cost of importing) =…

Q: A machine costs $180,000 and will have an eight-year life, a $20,000 salvage value, and…

A: Accounting rate of return (ARR) for an investment can be calculated as follows:-

Q: A new absorption chiller system costs $360,000 and will save $52,500 in each of the next 12 years.…

A: Net present worth approach is a quantitative analysis tool that helps in evaluating the investment…

Q: manufacturing plant produces 5,000 units per year. The capital investment, annual expenses, salvage…

A: The present value method is an important technique to determine the probability of the projects…

Q: A mixing plant having a capacity of 50 cu. m. every hour costs P2,500,000. It is estimated to…

A: Answer -  Given,  Capacity of mixing plant = 50 cu.m./h Initial cost of Plant = P 2,500,000 Total…

Q: Two stamping machines are under consideration for purchase by a metal recycling company. The manual…

A: Given Information:   Manual Model Computer controlled model Machine Cost…

Q: A processing plant consumed 650,000 kW of electric energy annually and pays an average of P6.50 per…

A: Rate of rerun is the net gain or loss incurred in the investment, expressed as percentage to the…

Q: Determine the total depreciation during the year.Determine the depreciation cost chargeable to each…

A: Given information is: An asphalt and aggregate mixing plant having a capacity of 50 cu.m every hour…

Q: Eight years ago, the Blank Block Building Company installed an automated conveyor system for…

A: Given: The value of the automated conveyor system value is $38,000. The value of the removal is…

Q: Canvas Reproductions, Inc., has spent $4,500 dollars researching a new project. The project requires…

A: Amount spent for research on new product = $4500 Cost of new machinery = $20,000 Installation cost =…

Q: n eight-year life and a P250,000 salvage value. Its annual operating costs will be P800,000. A…

A: Given   Manual Computer Investment cost 1250000 4750000 Cost 8,00,000 5,00,000 Upgradation…

Q: years. One person will operate the machine at a rate of Php24 per hour. The expected output is 8…

A: Given data initial cost 23000 8000 useful life 10year 5year AMC 3500 1500 salvage value 4400 0…

Q: ABC company is considering constructing a plant. The land costs 15,000,000 pesos, the building costs…

A: Generally, there are several methods used in practice and all of them will give equal results. And…

Q: The ML Company imported a new machine at a peso equivalent of $1,320,000. The company has to pay…

A: The cost of the machine is the cost associated with that machine to make it fit for the use of the…

Q: nufacture a product and sell it for $3.00 per unit. Equipment to manufacture the product will cost…

A: The cost is Cost = $200,000 + ($0.25)(no. of units) + ($0.85)(no. of units) + ($0.25)((no. of units)…

Q: An industrial organization studying the relative desirability of two diesel engines proposed for…

A: Relative Desirability : Based on the quantity of investment in one asset in an organization, how…

Q: BW Company has determined that it requires a new treatment facility that would clean polluted water…

A: The decision regarding the acquiring the asset or the construct the asset depends upon the various…

Q: A newly hired Sanitary Engineer was made to evaluate the following conditions; An equipment package…

A: Concept. Equivalent annual cost is annual cost of owning and maintaining asset determined by…

Q: A construction company is evaluating the purchase of a new concrete mixer with hydraulic hopper and…

A: In the given question we are provided with the information of a construction company that is…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.