Please do not give solution in image format thanku X Company must decide whether tocontinue using its current equipment orreplace it with new, more efficientequipment. The following information isavailable for the current and newequipment:CurrentequipmentCurrentsales valueFinalsales valueOperatingcostsNewequipmentPurchasecostFinalsales valueOperatingcostsavings$20,0002,72065,450$170,0002,72027,690The current and new equipment will lastfor 6 years. If X Company replaces thecurrent equipment, what is theapproximate internal rate of return?

Internal rate of return is the modern method of capital budgeting that is used to determine the…

Answered: X Company must decide whether to…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter10: Long-lived Tangible And Intangible Assets

Section: Chapter Questions

Problem 3Q

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A net present value analysis used to evaluate a proposed equipment acquisition indicated a 7,900 net present value. What is tile meaning of the 7,900 as it relates to the desirability of the proposal?
Which one of the following is the proper dollar value of existing equipment to use in replacement analysis? A. Original cost B. Present market value if sold C. Present trade-in value D. Present book value E. Present market value if sold minus removal and selling expenses
The Company provided the following data: Value of biological asset at acquisition cost on 12/31/19, P 600,000 Fair valuation surplus on initial recognition at fair value on 12/31/19 P 700,000 Change in fair value to 12/31/20 due to growth and price fluctuation, P 100,000 Decrease in fair value due to harvest, P 90,000 What is the carrying amount of the biological asset on December 31, 2020? What is the gain from change in fair value of biological assets in 2020?
A company is considering replacing one of its old assets with a new one. The original purchase price of the old asset represents – Group of answer choices Relevant cost Differential cost Sunk cost Opportunity cost
Enter Co. determined the following information for the purpose of testing its investment in associate for impairment: Carrying amount of investment (including ₱100,000 goodwill) 1,600,000 Fair value less costs of disposal (FVLCD) 1,440,000 Value in use (VIU) 1,380,000 How much is the impairment loss? 160,000 b. 220,000 c. 60,000 d. 0
Assume that the capital expenditures to replace and upgrade the production equipment areas given in the original exercise, but that the production and sales quantity is not known. Forwhat production and sales quantity would SS (i) upgrade the equipment or (ii) replace the equipment?
Which ot the following statements is true? a. IFRS requires firms to expense immediately all internal expenditures for R&D costs. b. Under IFRS, the product development portion of R&D is capitalized. c. U.S. standard setters require R&D costs to be expensed because of the uncertainty in judging their future revenue-generating potential. d. GAAP required disclosure of firms’ R&D expenditures assits the investor well. This is particularly true for firms with large R&D expenditures, such as technology firms. Which of the following statements is true? (Select one or more) a. For some transactions U.S. GAAP requires that value changes are recognized on the balance sheet and the income statement when they occur, even if not realized. b. U.S. GAAP allows firms to revalue upward the values of assets whose fair values have increased. c. A write down is necessary if the fair market value (FMV) of equipment is less than the carrying value currently on the books…
Which statement is INCORRECT about subsequent measurement of intangible assets? Q7 Select one: a. When using the cost model an entity should estimate the estimated useful life as well as the estimated residual value if the asset is determined to have an indefinite useful life b. When using the cost model an entity should estimate the estimated useful life as well as the estimated residual value if the asset is determined to have a definite useful life. c. The same model chosen by an entity should be used for all intangible assets in the same class. d. Intangible assets may be measured using either the cost model or the revalued cost model.
Assumethatyouareadvisingthemanagementofafirm thatisabouttodoubleitsassetstoserveitsrapidlygrowingmarket.Itmustchoosebetweenahighlyautomatedproductionprocessandalessautomatedoneanditmustalsochoose a capitalstructure forfinancing the expansion.Should the assetinvestmentandfinancingdecisionsbejointlydetermined?
Costs associated with various intangibles of a company may either be expensed when incurred or capitalized and amortized. Indicate how each of the following costs should be recorded. Options: - Charged to franchise account and amortized - Charged to patent account and amortized - Charged to appropriate asset accounts and amortized - Charged to expense when incurred 1. Initial fee to acquire a franchise 2. Design, construction, and testing of preproduction prototypes and models 3. Legal costs incurred in connection with a successful patent application 4. Laboratory research aimed at discovery of new knowledge 5. Cost of purchased equipment that will be used in a series of R&D projects over a ten-year period 6. Legal costs of the initial incorporation of a business 7. Cost of a long-term lease of land containing mineral deposits 8. Annual service fee paid to the franchiser's headquarters for administrative services rendered to the…
Which of the following research and development costs should always be capitalized? a. costs of intangibles purchased from othersb. costs of materials, equipment, and intangibles with alternative future uses purchased fromothersc. costs of equipment with an expected life greater than three yearsd. costs of contract services purchased from others
1. What is the carrying amount of the biological assets on December 31? а. 3,160,000 b. 2,350,000 c. 2,800,000 d. 2,380,000 What amount should be reported as gain from change in fair value attributable to price change? a. 810,000 b. 450,000 c. 360,000 d. 0. 3. What amount should be reported as gain from change in fair value attributable to physical change? а. 810,000 b. 450,000 c. 360,000 d. 700,000

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