Which system should the firm choose and why

Q: B2B Co. is considering the purchase of equipment that would allow the company to add a new product…

A: SOLUTION- NET PRESENT VALUE-  IT IS THE DIFFERENCE BETWEEN PRESENT VALUE OF CASH INFLOWS AND PRESENT…

Q: depreciated on the reducing-balance

A: Year Opening book value (A) Depreciation (B =A * 40%) Closing book value or NBV (A - B) 1 RM41,000…

Q: In conducting an EVA analysis for year 2 for a newly introduced product line, Bethune, Inc., which…

A:

Q: The initial cost of a building is $ 125,358, its annual rental income will be $ 17,777 and its…

A: Annual Straight-Line Depreciation Rate: The annual straight-line depreciation rates can be found on…

Q: A cooling water pumping station at a manufacturing plant in Iligan City costs 30,000,000 php to…

A: Depreciation is a systematic reduction in the cost of an asset over its useful life. There are  many…

Q: (a) Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting…

A: Payback period (PBP) refers to the period or duration within which the company is able to recover…

Q: Lusaka Rock buster has recently purchased an item of earth moving plant at a total cost of K24…

A: Depreciation is charged on the assets indicating the decrease in the value of the asset.…

Q: A machinery that costs $100,000, has a service life of 5 years and a salvage value of $10,000 at the…

A: Initial Investment  $   1,00,000.00 Salvage Value  $      10,000.00 Tax Rate  30% MARR After…

Q: A machine can be purchased for $60,000 and used for five years, yielding the following net incomes.…

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

Q: A project under consideration by PHI Inc. is summarized. The company uses straight-line…

A: Cashflows are as follows  At time 0   cash outflow = -$75000 From time 1 to 10,  net after tax cash…

Q: An old machine cost P48,000.00 a year to maintain. What expenditures for a new machine is justified…

A: In order to justify the expenses of the new machine the present value of future maintenance costs…

Q: Which is a manufacturer of material handling equipment and machinery, is taking two alternatives…

A: In this we have to calculate the present value of all cost and than find breakeven point.

Q: A contractor has to choose one of the following alternatives in performing earthmoving contracts: A.…

A: Capital budgeting is a tool or technique that helps to analyze the profitability of the project.

Q: A company is planning to spend P60,000 for a machine which will be depreciated on a straight-line…

A: Introduction: The accounting rate of return (ARR), a capital budgeting metric, is used to determine…

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: Hudson Co. can purchase a machine for $190,000 and use it for five years, yielding the following net…

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

Q: An asset in the five-year MACRS property class cost $100,000 and has a zero estimated salvage value…

A: Present worth is the worth in current time of the amount which is expected to be received in some…

Q: You need to choose between two machines based on the folowing information: Machine 1 has a 4 year…

A: Given that :-  Machine 1 cost = $322,500 ( 4 years life )  Pre tax operating cost = $64,500 Machine…

Q: A special power tool for plastic products costs $400,000 and has a four-year useful life, no salvage…

A: The period in which the cost of asset including working capital investment is fully recovered from…

Q: Fort requires equipment costing $320,000.  It is a  9-year project, and is depreciated straight line…

A: cost of equipment= $320,000 life span of the project= 9 years  Sales generated= $189,000  cost=…

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

A: Capital budgeting: It is a method of evaluating the projects which required huge investments and…

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: 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: A machine costs $600,000 and is expected to yield an after-tax net income of $23,000 each year.…

A: Accounting Rate of Return - It shows the rate of annual return from the investment made by the…

Q: A special power tool for plastic products costs $400,000 and has a 4year useful life, no salvage…

A: Rate of return A net profit/loss of the investment over the specified period is denoted in terms of…

Q: B2B Co. is considering the purchase of equipment that would allow the company to add a new product…

A: Calculation Net present value:

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: QBS company wishes to replace its current equipment that was purchased 8years ago with the newer…

A: Future worth analysis is a method in which it is required to calculate the equivalent cost of the…

Q: A person plans to purchase a model A equipment for Rp. 31,000,000. Another alternative is a model B…

A: Here, To Find: NPV =? IRR =? Tool to choose =?

Q: The possibility of acquiring new machinery at a cost of $ 40,000 is being evaluated, which may be…

A: Solution-Straight line depreciation is the most basic method of depreciation. It includes equal…

Q: Arvada Co. is considering the purchase of equipment that would allow the company to add a new…

A: Capital budgeting is used to evaluate the projects. With the help of capital budgeting, the…

Q: Agranary has two options for a conveyor used in the manufacture of grain for transporting, filling,…

A: Annual worth is calculated by present value of annuity formula. Present value of cash flows from the…

Q: TransITRI is a transportation company with a recent need of a new construction equipment at a first…

A: Present worth of an investment is the present value of all the cash flows for the investments, it…

Q: TransITRI is a transportation company with a recent need of a new construction equipment at a first…

A: The machine has an economic life of 7 years.The MARR is 16%.The below table shows the calculation of…

Q: TransITRI is a transportation company with a recent need of a new construction equipment at a first…

A: The machine has a economic life of 8 years.The function given for cash flow before tax can be used…

Q: As a member of UA Corporation's financial staff, you must estimate the Year 1 cash flow for a…

A: Operating cash flow of the project helps in understanding if the business is able to generate…

Q: The ABC Company imported an equipment at a peso equivalent to P330,000. The company has to pay…

A: Solution: Initial cost of the Machine = Imported purchase price + Import duties + Non refundable…

Q: A machine costs $600,000 and is expected to yield an after-tax net income of $23,000 each year.…

A: calculation of above requirement are as follows

Q: Abbott placed into service a flexible manufacturing cell costing $850,000 early this year for…

A: Taxable income is the amount on which the tax is to be paid. It is the amount after considering all…

Q: The year-end operating and maintenance costs of a certain machine are estimated to be P12,000 the…

A: Equivalent annual cost (EAC) is the annual cost of owning and maintaining an asset determined by…

Q: A mining project requires the purchase of new drilling equipment at a cost of $69750. A further…

A: The revenue expenditure can be claimed as tax deductible expenditure. Accordingly, tax benefit can…

Q: The net investment of decision is P276,200 which includes P247,500 capitalizable cost of machine and…

A: Hi there, thanks for posting the questions. But as per our Q&A guidelines, we must answer the…

Q: B2B Company is considering the purchase of equipment that would allow the company to add a new…

A: The principal tools and implements utilized in the running of the firm are referred to as equipment…

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

A: Hi, since you have posted a question with multiple sub parts, as per the guidelines we will solve…

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.