Specialized bits (costing $50,000) used in the mining industry have a useful life of 5000 hours of operation and can be traded in when a new bit is purchased for 10% of first cost. The drilling machine that uses the bit is used 1000 hours per year. What is the equivalent uniform annual cost of these bits at 2.5%? (a) $8559 (b) $9510 (c) $9828 (d) $10,920

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: A company is planning to purchase a machine that will cost $42,000 with a six-year life and no…

A: Introduction Payback Period The acceptability of a project is determined by a variety of factors,…

Q: A machine purchased 1 year ago for $85,000 costs more to operate than anticipated. When purchased,…

A: Value of P: P = 85000 - 10000 P = $ 75000.   Value of N = 5 years.

Q: If a trenching machine has an estimated life span of 7500 hours and a yearly operating cost of…

A: Hourly cost can be calculated using the formula given below. Hourly cost = Total cost in One year /…

Q: E24-6 BSU Inc. wants to purchase a new machine for $29,300, excluding $1,500 of instal- lation…

A: Payback period is the amount of time to recover the initial investment. It can be calculated Payback…

Q: A manufacturing company leases a building for $100,000 per year for its manufacturing facilities. In…

A: Annual profit: It can be defined as the amount of profit earned by a company during an accounting…

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: 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: An £80,000 machine to manufacture recycled paper was purchased by the XYZ company two years ago. The…

A: To determine the best time, we have to compute the annual worth of the machine for each year,and…

Q: Two years ago, Toshiba Electronics made a $15 million investment in newassembly line machinery. It…

A: AW stands for the annual worth of a project. It is important to calculate AW in case of replacement…

Q: below: The initial cost is $500,000. The tire cost is $20,000, and the estimate tire life is 4,000…

A: This is the expense of repairing and maintaining construction equipment that has been subjected to…

Q: processing plant consumed 600,000 kwh of electric energy annually and pays an average of ₱2.00 per…

A: Annual cost for electriic energy = 6,00,000KWh (P2.00/kWh) = P1,200,000 Annual cost for power plant:…

Q: Marigold Inc. is planning to invest in new manufacturing equipment to make a new garden tool. The…

A: Answer- Working Note :   Cost to Manufacture = DL + DM + VFOH  = 8.80+ 28.90+ 4.50  = $ 42.20

Q: A company with a MARR = 10% expects the costs to operate and maintain a particular piece of…

A: Equivalent annual cost (EAC) is the annual cost of owning, operating, and maintaining an asset over…

Q: EXCEL, an equipment costing $100,000 has a useful life of 6 years. It has a resale value of $8,000.…

A: given information equipment costing = $100,000 useful life= 6 years resale value = 8000 annual cost…

Q: A piece of new equipment has been proposed by engineers to increase the productivity of a certain…

A: Present Worth or Net present Value refers to the difference between the discounted value of cash…

Q: sewage pump equipment initially costs P95,000. Annual maintenance costs are P1850. The equipment’s…

A: Here we need to find the equivalent annual cost (EAC). EAC, essentially, is the annual cost of…

Q: The project to convert the infrastructure into an office complex that will generate annual revenues…

A: Cash flow considers only the cash dealt items. Since depreciation is a non-cash item, so the impact…

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: A company is considering the purchase of a new machine for $87,000. Management predicts that the…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: A company is considering the purchase of a new machine for $54,000. Management predicts that the…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: A machine purchased a year ago for $85,000 costs more to operate than anticipated. At the time of…

A: Present value (PV) is the current value of a future sum of money or a stream of cash flows, given a…

Q: A machine with an eight-year life and $5000 salvage is purchased for $40,000. Annual costs of…

A: As the tax rate is not given in the question, Tax affect on depreciation and salvage value can be…

Q: Dragoo Building Inc. has a crane with a book value of $240,000 and a four-year remaining life. A new…

A: 1. Book Value = 240,000 ( Not relevant for calculation of Net benefit) 2. Outflow on purchase of new…

Q: Another Company has just invested in a new Machining Center that cost $550,000. The company believes…

A: It is given that :cost of machine - $ 550,000 Life -10yrs Salvage value - $75000 MARR – 10% Annual…

Q: The William Company has been offered a seven year contract to haul iron ore. Since this contract…

A: Net present value(NPV) is the difference between present value of cash inflows and initial…

Q: Calculate the hourly operating cost (under average conditions) for a 180- horsepower motor grader…

A: The operating cost that those costs are incurred to run the operations of the business. The per-hour…

Q: A certain engine lathe can be purchased for $150,000 and depreciated over three years to a zero…

A: Actual Dollar & Constant Dollar are two values that are used to perform project analysis. In…

Q: Machine A was purchased last year for $20,000 and had an estimated MV of $2,000 at the end of its…

A: Annual Worth(AW) refers to equivalent annualized cost that will be incurred on machine considering…

Q: A company is considering replacing an old piece of machinery, which cost $400,000 and has $175,000…

A: Sunk cost means the cost incurred in past and do not have any effect on the current decision-making…

Q: A packing equipment that cost P 500,000 will last for 20 years and have a scrap value at that time…

A: Equipment cost = P500000 Scrap value = P50000 Repair per year = P30000 Operating expenses includes…

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: Inc. uses fine-tuned equipment to produce electronic products. Each one of its machines costs…

A: Equivalent annual cost: It is the annual cost of operating, owning, and maintaining an asset over…

Q: An assembly operation at a software company currently requires $100,000 per year in labor costs. A…

A: IRR method provides a benchmark return for equating future worth and present worth.

Q: West River Company is considering purchasing a machine (Class 8, CCA rate 20%) that will cost…

A: Decision regarding replacement of an existing asset with another is based on the net present value…

Q: A Company has just invested in a new Machining Center that cost $150,000. The company believes that…

A: Capital recovery is the equivalent annual amount that an asset must earn every year in order to…

Q: ABC Company has purchased a new machine costing $49,000 and the machine is expected to reduce the…

A: Net Present Value:-The Difference between the present value of cash inflow and outflow over a period…

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: Metallic Peripherals, Inc., has received a production contract for a new product. The contract lasts…

A: Introduction: Equivalent uniform annual cost or EUAC is an approach which converts the upfront costs…

Q: To make an item inhouse, equipment costing $250,000 must be purchased. It will have a life of 4…

A: Cost of equipments=$250000n=4 yearsAnnual cost=$80000Cost per unit to manufacture=$40Cost for buying…

Q: At i = 10% per year, a machine has a first cost of $9,000 and estimated operating costs and year-end…

A: Solution:- Given, i = 10% per year First machine cost = $9,000

Q: replacing an old piece of machinery, which cost $168,000 and has $88,000 of accumulated depreciation…

A: Depreciation: It refers to the gradual decrease in the value of an asset due to normal wear and tear…