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A: Opportunity cost refers to the given up benefit in the process of getting other benefits.
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Q: When WTA, Inc. purchased rights to extract silver from a mine for a total price of $2.1 million 3…
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Q: 5. The physical life is always greater than all the other “life" factors under replacement analysis.
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A: Initial Cost = 10,000
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Q: 1-)According to replacement analysis, determine the number of years that the defender should be used…
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Q: Lombard Company is contemplating the purchase of a new high-speed widget grinder to replace the…
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Q: Define replacement analysis
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Q: What are the Replacement Decisions when required Service Life Is long?
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A: Given: Equipment cost=P 60000 Salvage value=P 20000 Life of asset=6 years
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Q: How are the Depreciation expenses calculated?
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Q: What are three depreciable costs that are included in an asset’s basis?
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Which are the three aspects of the replacement problem?
Replacement problem is important to understand as one needs to realize the cost at which asset is being replaced. It helps to minimize the wastage and get the best returns while replacing an asset. That is why it is important to understand the aspects of the replacement problem.
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- Performing replacement studies requires knowledge of the depreciation schedule and of taxable e gains or losses at disposal. True or false?why?When WTA, Inc. purchased rights to extract silver from a mine for a total price of $2.1 million 3 years ago, the estimated 350,000 ounces of silver was to be removed over the next 10 years. A total of 175,000 ounces has been removed and sold thus far. (a) What is the total cost depletion allowed over the 3 years? (b) New exploratory tests indicate that only an estimated 100,000 ounces remain in the veins of the mine. What is the cost depletion factor applicable for the next year?How can we determine the Market value of the defender?
- Define replacement analysisdate period In Santa Barbara, the sales tax is 7.55%. What would be the final cost of a surfboard if it was being sold for $1,200 ?Lombard Company is contemplating the purchase of a new high-speed widget grinder to replace the existing grinder. The existing grinder was purchased 2 years ago at an installed cost of $57,400; it was being depreciated under MACRS using a 5-year recovery period. The existing grinder is expected to have a usable life of 5 more years. The new grinder costs $103,300 and requires $5,200 in installation costs; it has a 5-year usable life and would be depreciated under MACRS using a 5-year recovery period. Lombard can currently sell the existing grinder for $69,900 without incurring any removal or cleanup costs. To support the increased business resulting from purchase of the new grinder, accounts receivable would increase by $40,800, inventories by $29,900, and accounts payable by $57,900. At the end of 5 years, the existing grinder would have a market value of zero; the new grinder would be sold to net $28,600after removal and cleanup costs and before taxes. The firm is subject…
- 9.1 The Arkansas Division of ADM, a large agricultural products corporation, pur- chased a state-of-the-art ground-leveling system for rice field preparation 3 years ago for $120,000. When purchased, it had an expected service life of 10 years, an estimated salvage of $25,000 after 10 years, and AOC of $30,000. Current account book value is $80,000. The system is deteriorating rapidly; 3 more years of use and then salvaging it for $10,000 on the international used farm equip- ment network are now the expectations. The AOC is averaging $30,000. A substantially improved, laser-guided model is offered today for $100,000 with a trade-in of $70,000 for the current system. The price goes up next week to $110,000 with a trade-in of $70,000. The ADM division engineer estimates the laser-guided system to have a useful life of 10 years, a salvage of $20,000, and an AOC of $20,000. A $70,000 market value appraisal of the current sys- tem was made today. If no further…A manufacturer purchased and installed a shrink-wrap machine 4 years ago at a cost of $4,000. A new machine is now needed, and one is available for $7,000 less a $1,000 trade-in allowance for the old machine. The market value of the old machine without trade-in on a new model is $500. Which of the four dollar values above is a sunk cost that is irrelevant in a pre-tax engineering economic analysis? Group of answer choices $7,000 $1,000 $4,000 $500 Flag question: Question 8Consider two basic approaches to analyzing replacement problems: the cash flow approach?