When comparıng the two machines shown below using Capital Recovery method if MARR is 8%? What is the capital recovery for machine B? Machine A Machine B 1st Cost $12,000 8000 Operating cost/Yr 3500 2500 Salvage Value 3500 1000 Life 10 5 O a. $-1833.22 O b. $-1465.25 O. S-1546.80 1588 21
Q: 2. The following are the relevant data of two alternative machines are shown in the table below.…
A: Capital budgeting is used by the business firms to determines the gains from different capital…
Q: TransITRI is a transportation company with a recent need of a new construction equipment at a first…
A: The calculation of different cashflows for different years is shown in below table:
Q: A certain equipment costs P 250,000, lasts 10 years with a salvage value of P25.000. Money is worth…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Krostel Company is planning to acquire a machine costing P 500,000 with a useful life of 3 years…
A: Accounting rate of return = Average Annual Income/ Average Investment Accounting rate of return = P…
Q: ntenance cost will total P5,000,000.00 for 10 years. Use 10% as worth of money or interest rate.…
A: As per rule, allowed to answer one question at a time and post the remaining in the next submission.
Q: Wright Corp. Is considering the purchase of a new plece of equipment, which would have an Initial…
A: The question is based on the concept of Financial Management. Payback period is the period in which…
Q: DEPRECIATION Other BV1 BV2 BV7 BV10 МЕТНODS Unknowns SL Method d15 = DB Method R = SF Method (i =…
A: Depreciation: It is the decrease of the cost of an asset in a methodical way until the worth of…
Q: 1. A Machine costs P80,000 and an estimated life of 10 years with a salvage value of P5,000. What is…
A: Note:Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: Equipment will be purchased at a cost of P250,000. It will have no salvage value. The cash flows are…
A: Solution: Cumulative cash flows needs to be computed as under: Year cash flows Cumulative cash…
Q: CLO-7) Company would lke to buy a machine in 202. The ife of the machine is 15 years with salvage…
A: Asset refers to any economic value resource for an individual, corporation or a country. It…
Q: Given the two machines' data Machine A Machine B First Cost P8,000.00 P14,000.00 Salvage value…
A: Equivalent annual cost refers to the annualized cost of owning, operating and maintaining an asset…
Q: . Determine the capitalized cost of a small public market if the structure has a fir. ost of P20M, a…
A: Capitalized cost is the technique of recognizing the amount incurred as an expenditure which is…
Q: Consider the following net cash flow of a new machine whose useful life is 5 years and is 5,000 $. 1…
A: Rate of return is annual income earned on the investment. That should be sufficient to satisfy the…
Q: you are given the following information about a machine : Investment costs $ 200,000 Salvage Value $…
A: Capital recovery analysis is done before the purchase of a new machine or an asset. Capital recovery…
Q: Zulu Ltd have made an investment of R400 000 in a machine. Further details: Expected useful life 5…
A: Here, Salvage Value is R120,000 Cost of Capital is 10% Depreciation Method is Straight Line Method…
Q: 2. A company is considering two types of equipment for its manufacturing plant. Capital is at least…
A: PWM: It is the present worth method of capital budgeting. It is the current value of cash flows that…
Q: Determine the capitalized cost of a large-format printer that has a first cost of P1.20 million an…
A: Capitalized Cost- Capitalized cost is defined as an expense that is capitalized, i.e. added to the…
Q: a state of the art prodaction equipment that will Cost 2, 00,000 pesos. The amount of Shipping is G9…
A: Solution Given Purchase price 2000000 Shipping charge 60000 Installation cost…
Q: Given the two machines' data Machine A Machine B First Cost P8.000.00 P14,000.00 Salvage value…
A: Equivalent uniform annual Cost=Initial CostPresent Value Annuity Factor+Annual Cost
Q: The ABC company is planning to purchase a machine known as machine X. Machine X would cost $40. 000…
A: Payback period means the period when we get back our investment amount. Formula for payback period…
Q: Xavier Co. wants to purchase a machine for $37,400 with a four-year life and a $1,100 salvage value.…
A: The difference between the present value of cash inflows and present value of cash outflows is net…
Q: Original Machine Sinitial cost = 94210 SAnnual depreciation = 10876 SPurchased 5 years ago SBook…
A: The question is replacement problem of capital budgeting. The details of both the machine are given…
Q: The concrete pavemen requires $15,000 of repair during years 12, 25 and 40. The asphalt pavement…
A: Concept of PWF and LCC
Q: A machine cost P 1,800,000.00. It has a salvage value of P 300,000.00 at the end of 5 years. If…
A: The depreciation is a method to allocate the cost of the asset over its useful life. The…
Q: 1. A Machine costs P80,000 and an estimated life of 10 years with a salvage value of P5,000. What is…
A: Depreciation can be defined as the reduction in the value due to wear and tear in asset over a…
Q: years for P6000. Operating cost is 4000 annually. Money is worth 12%. Compute for its capitalized…
A: On a company's balance sheet, a capitalised cost is an item that is added to the cost base of a…
Q: Choose from the two machines which is more economical: Machine A P12,000 Machine B 14000 P2,000…
A: Equivalent uniform annual cost method is method in which equivalent annual cost is calculated which…
Q: A company purchase a piece of manutacturing equipment for rental purposes. The expected annual…
A: The current value of a projected amount of money or stream of cash flows with a predetermined rate…
Q: The management of NUBD Co. is considering the purchase of a new machien costing P400,000 with a…
A: Average rate of return or accounting rate of return is technique in capital budgeting which is used…
Q: Given the two machines' data Machine A Machine B First Cost P8,000.00 P14,000.00 Salvage value…
A: Equivalent uniform annual cost refers to cost of owning, operating and maintaining an asset over its…
Q: Given the following data of equipment A and B. B A P 50 000 P 150 000 2000 First Cost Salvage Value…
A: Rate of return shows the net return that is the gain or loss over a specified time frame of an asset…
Q: The constant percentage method will be used to depreciation a machine with an initial cost of P 1.2…
A: Depreciation refers to the method which results in decrease in the value of the asset over the…
Q: Vista Limited intends purchasing a new machine and has a choice between the following two machines:…
A: At IRR, NPV =0 i.e. At IRR, Present value of cash inflows =Initial cash outflows
Q: he net investment of decision is P276,200 which includes P247,500 capitalizable cost of machine and…
A: Net Investment = P276,200 Cost of machine = P247,500 Additional net working capital = P50,000 Time…
Q: The alternatives shown on the basis of their capitalized costs using an interest rate of 10% per…
A: Capitalized cost can be computed using the following formula: CC=First cost(A/P,i,n)+Annual…
Q: Cost of an Xray-machine is 1,500,000.00that has a useful life of 10 years, salvage value of 20,000…
A: Depreciation using the double-declining balance method. In this depreciation method, the assets are…
Q: Donair company is interested in purchasing a new piece of equipment. It will not replace an old…
A: The branch of financial management dealing with evaluation and selecting of new projects for a…
Q: Given the two machines' data Machine A Machine B First Cost P8,000.00 P14,000.00 Salvage value…
A: Entity have two option to buy machine, machine A and machine B Following is the calculation
Q: Using equivalent uniform annual cost method, determine the value of alternative A and alternative B:
A: Total cost is the cost incurred in the total production of a unit. It includes all direct and…
Q: |МАCHINE A MACHINE B FIRST COST |11,000 18,408 ANNUAL OPERATING COST 3,500 3,162 SALVAGE VALUE…
A: Concept. Annual worth method is commonly used for comparing alternatives. In this method, all the…
Q: XYZ company has A piece of new equipment will cost $70,000. The equipment will provide a cost…
A: Net present value is the value of any asset of all future income has been discounted back to present…
Q: Machine A Machine B R100 000 R110 000 Initial cost 5 years 5 years Expected economic life R10 000 0.…
A: Payback period- It represents the time period required for recovery of the initial investment made…
Q: An equipment costs P45,000 with an economic life of 18 years. Its salvage value is P12,000.…
A: Capitalized cost is present value of all cost including maintenance and operating.
Q: RLC Manufacturing is planning to purchase a cutting equipment. Information are as follows:…
A: PV is the current worth of cash flows that are expected to occur in the future.
Q: Determine the capitalized cost of a large-format printer that has a first cost of P1.20 million and…
A: Capitalized cost is defined as an expense that is capitalized, i.e. added to the asset's value, and…
Q: A company received from a dealer who wishes to offer a new generator to power their industrial hoist…
A: The question should be solved by the use of the net present worth (NPW)method. The NPW is calculated…
Q: An equipment was purchased now at P10,000,000.00 prevailing interest rate is 10% per year. Solve the…
A: “Since you have posted a question with multiple sub-parts, we will solve the first subpart for you.…
Q: Your company must replace an old machine. There are two offers: Purchase price Variable unit cost…
A: Cost of capital is the need return required to ready a capital budgeting project, such as building a…
i need the answer soon please
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- An auto repair company needs a new machine that will check for defective sensors. The machine has an Initial investment of $224,000. Incremental revenues, including cost savings, are $120,000, and Incremental expenses, including depreciation, are $50,000. There is no salvage value. What is the accounting rate of return (ARR)?Vista Limited intends purchasing a new machine and has a choice between the following two machines:Equipment AEquipment BInitial costR220 000R240 000Expected useful life5 years5 yearsScrap valueNilNilExpected net cash inflows:RREnd of:Year 155 00070 000Year 260 00070 000Year 362 00070 000Year 460 00070 000Year 570 00070 000The company estimates that its cost of capital is 12%. Required:2.1 Calculate the Payback Period of both equipment. (Answers must be expressed in years, months and days). 2.2 Calculate the Accounting Rate of Return (on initial investment) for both equipment A and B. (Answers must be expressed to 2 decimal places). 2.3 Calculate the Net Present Value of each equipment. (Round off amounts to the nearest Rand.) 2.4 Calculate the Internal Rate of Return of Equipment B.Vista Limited intends purchasing a new machine and has a choice between the following two machines:Equipment AEquipment BInitial costR220 000R240 000Expected useful life5 years5 yearsScrap valueNilNilExpected net cash inflows:RREnd of:Year 155 00070 000Year 260 00070 000Year 362 00070 000Year 460 00070 000Year 570 00070 000The company estimates that its cost of capital is 12%. Calculate the Internal Rate of Return of Equipment B.
- 1. Use the information below for the next two questions. Leaky Pipe Inc. is considering a new machine for its largest product line. The cash flows Lastalled Purchase Price S40, 000 Roduced Cost of Materials S 6,000 per year Labor Savings S9, 000 per year locrease in Working Capital $5, 000 (for Year 0 and I only) Depreciable Life (zero salvage value) 4 years Economic Life 8 years Required Return 12% Tax Rate 40% a . What is the NPV of this machine if it does not replace any other?. b. Suppose the machine replaces another machine with the following characteristics: Book Value of Old Machine $6.000 Market Value of Old Machine $4,000 Remaining Depreciable Life of Old Machine 6years Assume the old machine was not expected to have any salvage value and compute the NPV of the New Machine.The cash flow after taxes for two machineries A and B are given in the table below.Year wise Cash flow A B1 22000 70002 25000 50003 28000 45004 5000 280005 4500 250006 7000 22000The estimated useful life of the machines is 6 years and the discount rate is 11%. The cost of each machine is Rs60000 1. Discuss the steps of application of the concept of NPV to the given situation. Determine the NPV of Machine A . 2. Determine the NPV of the Machine B. Discuss, which machinery should be acquired and why?A project is estimated to cost P120T, last 8 years & have a salvage value of P20T. The annual gross income is expected to average P50k & annual expenses is P5T. If capital is earning 10% determine if this is a desirable investment using annual cost method, what is the net cost. : a. 24,255.598 b. P24,756.951 c. 25,245.598 d. P27,535.412
- 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% 2) Calculate the accounting rate of return (on average investment) for Machine A. (answer rounded offto 2 decimal places).Given the following information, what is the financial break-even point? Initial investment = $250,000; variable cost = $95; fixed cost = $58,000; price = $130; life = 6 years; required return = 12%; SL depreciation; before-tax salvage value of assets = $28,000; initial net working capital investment = $35,000, and tax rate is 21%. Do It correctly I'll rateCalculate the conventional benefit-cost ratio for the alternative: Initial Investment 150000 Revenues 50000 Costs 20000 Salvage Value 50000 Useful life 10 MARR 0.1 Select one: a. 1.2114 b. 1.3130 c. 1.4659 d. 1.3681 e. 1.2960
- TransITRI is a transportation company with a recent need of a new construction equipment at a first cost of $78,000 (Equation (1)), zero salvage value, and a cash flow before taxes (CFBT) per year t that follows Equation (2). CFBT = $30,000 – 3,000t (for t = 1, 2, … T) (1) CFBT = - $78,000 (for t =0) (2) Plot the cash flow diagram from year 0 (t=0) to year 9 (t=9)Given the following information, what is the financial break-even point? Initial investment = $250,000; variable cost = $95; fixed cost = $58,000; price = $130; life = 6 years; required return = 12%; SL depreciation; before-tax salvage value of assets = $28,000; initial net working capital investment = $35,000, and tax rate is 21%. Correct answer needed.The following present value factors are provided for use in this problem. Periods Present Valueof $1 at 11% Present Value of anAnnuity of $1 at 11% 1 0.9009 0.9009 2 0.8116 1.7125 3 0.7312 2.4437 4 0.6587 3.1024 Cliff Co. wants to purchase a machine for $62,000, but needs to earn a return of 11%. The expected year-end net cash flows are $24,000 in each of the first three years, and $28,000 in the fourth year. What is the machine's net present value? Multiple Choice $(3,351). $15,093. $77,093. $(43,556). $100,000.