ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
expand_more
expand_more
format_list_bulleted
Question
Chapter 13, Problem 36P
To determine
To find: The time duration after which the existing asset should be replaced.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
A diamond mining company has just purchased a new crystal extraction machine that cost $5000, and has an estimated salvage value of $1000, at the end of its 8 yeaer useful life, what is its book value in year 5 using the double declining balance methiod?
a) 3750
b) 2800
c) 500
d) 1187
plesae let me know the asnwer
Equipment Depreciation A new piece of equipment cost acompany $15,000. Each year, for tax purposes, the companydepreciates the value by 15%. What value should thecompany give the equipment after 5 years?
VML Industries has need of specialized yarn manufacturingequipment for operations over the next 3 years. The firm could buythe machinery for $95,000 and depreciate it using MACRS. Annualmaintenance would be $7500, and it would have a salvage value of$25,000 after 3 years. Another alternative would be to lease thesame machine for $45,000 per year on an “all costs” inclusive lease(maintenance costs included in lease payment). These leasepayments are due at the beginning of each year. VML Industriesuses an after-tax MARR of 18% and a combined tax rate of 28%. Doan after-tax present worth analysis to determine which option ispreferred.
Chapter 13 Solutions
ENGR.ECONOMIC ANALYSIS
Ch. 13 - Prob. 1QTCCh. 13 - Prob. 2QTCCh. 13 - Prob. 3QTCCh. 13 - Prob. 4QTCCh. 13 - Prob. 5QTCCh. 13 - Prob. 1PCh. 13 - Prob. 2PCh. 13 - Prob. 3PCh. 13 - Prob. 4PCh. 13 - Prob. 5P
Ch. 13 - Prob. 6PCh. 13 - Prob. 7PCh. 13 - Prob. 8PCh. 13 - Prob. 9PCh. 13 - Prob. 10PCh. 13 - Prob. 11PCh. 13 - Prob. 12PCh. 13 - Prob. 13PCh. 13 - Prob. 14PCh. 13 - Prob. 15PCh. 13 - Prob. 16PCh. 13 - Prob. 17PCh. 13 - Prob. 18PCh. 13 - Prob. 19PCh. 13 - Prob. 20PCh. 13 - Prob. 21PCh. 13 - Prob. 22PCh. 13 - Prob. 23PCh. 13 - Prob. 24PCh. 13 - Prob. 25PCh. 13 - Prob. 26PCh. 13 - Prob. 27PCh. 13 - Prob. 28PCh. 13 - Prob. 29PCh. 13 - Prob. 30PCh. 13 - Prob. 31PCh. 13 - Prob. 32PCh. 13 - Prob. 33PCh. 13 - Prob. 34PCh. 13 - Prob. 35PCh. 13 - Prob. 36PCh. 13 - Prob. 37PCh. 13 - Prob. 38PCh. 13 - Prob. 39PCh. 13 - Prob. 40PCh. 13 - Prob. 41PCh. 13 - Prob. 42PCh. 13 - Prob. 43PCh. 13 - Prob. 44PCh. 13 - Prob. 45PCh. 13 - Prob. 46PCh. 13 - Prob. 47PCh. 13 - Prob. 48PCh. 13 - Prob. 49PCh. 13 - Prob. 50PCh. 13 - Prob. 51PCh. 13 - Prob. 52PCh. 13 - Prob. 53PCh. 13 - Prob. 54PCh. 13 - Prob. 55PCh. 13 - Prob. 56P
Knowledge Booster
Similar questions
- A construction equipment costs 700,000 pesos and will have a salvage value of 30% of its original cost when retired at the end of 4 years. What is the first year’s depreciation cost? Use sum of years digit method.need answer in 20 mins sorry for rushing pls heglparrow_forwardA construction equipment costs 700,000 pesos and will have a salvage value of 30% of its original cost when retired at the end of 4 years. What is the first year’s depreciation cost? Use sum of years digit method. need answer in 20 mins sorry for rushing you guys :(arrow_forwardA printing machine initially costs ₱122,000. It can be sold for ₱15,000 at the end of its 5-year useful life.Using the declining balance method , what is the BOOK VALUE of the machine at the end of the second year of its useful life?arrow_forward
- A new machine costs $899,090 and falls in a 29.50% CCA class. The machine will have zero value after 5 years of use but will save $417,680 annually in operating costs before taxes in those five years. Assume a tax rate of 34.17%. Using a required return of 15.11%, what is the equivalent annual cost (EAC) of the machine purchase, considering the annual cash flow, initial purchase, and CCA tax shield? Options $59,682 $61,252 $62,823 $64,393 $65,964arrow_forward1. An equipment has a first cost of P500,000 and the cost of installation is P30,000. If the salvage value is 10% equipment cost at the end of the its useful life of 5 years. Compute the book value at the end of 3rd year. Using: Straight Line Method Sum of Years Digit Method Sinking Fund Method (if money is worth 6% per annum) Declining Balance Method Using Double Declining Balance Methodarrow_forwardA machine has a first cost of P36,000 and a salvage value ofP4,000 after 8 years. Find the annual depreciation rate using straight line method. It's engineering economics questions.arrow_forward
- Ederly Quarry sells a wide variety of cut limestone for residential and commercial building construction. A recent quarry expansion cost $2.9 million and added an estimated 100,000 tons of reserves. (a) Estimate the cost depletion allowance for the next 5 years, using the projections made by the owner, John Ederly. (b) Will the cost depletion in any of the 5 years be limited by law? Why or why not? Year 1 2 3 4 5 Volume, 1000 tons 10 9 15 15 18 Price, $ per ton 75 70 70 75 85arrow_forwardAn engineer bought an equipment for P 500,000. He psent an additional amount of P 30,000 for installation and other expenses. The estimated useful life of the equipment is 10 years. The salvage value is x% of the first cost. Using straight line method of depreciation, the book value at end of 5 years will be P 291,500. What is the value of x?arrow_forwardA project capitalized for ₱45,000 invested in depreciable assets will earn a uniform, annual income of ₱19945 in 10 years. The cost for operation and maintenance total ₱9,000 a year, and annual taxes and insurance will cost 4% of the investment. The company expects its capital to earn 12% before income taxes. Determine the equivalent uniform annual cost (EUAC) of the project?arrow_forward
- Peller machine losses 10% of its value each year. The machine costs P 2,000 originally. Find the book value at the end of 5 years. a. P1,312.20 b. P1,1180.98 c. P1,620.00 d. P1,458.00arrow_forwardurgent A firm can purchase a centrifugal separator (5-year MACRS property) for $17,000. The estimated salvage value is $4,000 after a useful life of six years. Operating and maintenance (O&M) costs for the first year are expected to be$1,700. These O&M costs are projected to increase by $500 per year each year thereafter. The income tax rate is 25% and the MARR is 13% after taxes. What must the uniform annual benefits be for the purchase of the centrifugal separator to be economical on an after-tax basis? The uniform annual benefits should be........... (Round to the nearest dollar.)arrow_forwardThe purchase of a motor for P6000 and a generator for P4000 will allow a company to produce its own energy. The configuration can be assembled for P500. The service will operate for 1600 hrs per year for 10yrs. The maintenance cost is P300 per year and the cost to operate is P0.85/hour for fuel and related costs. Using straight line depreciation, what is the annual cost(P) for the operation? There is P400 in salvage value for the system at the end of 10yrs.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education