Chapter 9, Problem 8RQ

A currently owned shredder for use in a refuse-powered electrical generating plant has a present net realizable value of $210,000 and isexpected to have a market value of $10,000 after 4 years. Operating andmaintenance disbursements are $100,000 per year. An equivalent shredder can be leased for $200 per day plus $80 per hour of actual use as determined by an hour meter, with both components assumed to be paid at the end of the year. Actual use is expected to be 1,500 hours and 250 days per year. Using a 4-year planning horizon and a MARR of 15%, determine the preferred alternative using the annual cost criterion. Solve, a. Consider only the above information and use the cash flow approach (insider’s viewpoint approach). b. Consider the additional information that the annual cost of operating without a shredder is $190,000 and use the cash flow approach (insider’s viewpoint approach).

A P650 000.00 - Diesel Electric generator unit is purchased to provide power to a remote town. The shipping cost is P20 000.00 and the cost of installation is P 30 000.00. If the salvage value of the unit at the end of 20 years is expected to be P50 000.00, determine the annual depreciation cost and the book value of the unit after five years using: a) Straight Line Method b) Sinking fund formula with 7% interest rate

A unit welding machine costs ₱45,000 with an estimated life of 5 years. Its salvage value is ₱2,500. Find its depreciation using sinking fund method at 8.5%.

5 The first cost of an electric rebar bender is P306,000 and a salvage value of P49,000 at the end of its life for 5 years. Money is worth 4.3% annually. If there is no salvage value and the annual maintenance cost is P18,000, find the annual cost of perpetual service.   Express your answer in whole number.

A machine cost P80,000 and the salvage value is P20,000 after 10yrs. Calculate the depreciation at year 6. Use Sum of Year's Digit Method.   note: please provide a solution for us to understand how to solve it thank you please don't use computer, please solve it

A dump truck was bought for ₱300,000, six years ago. It will have a salvage value of ₱ 30,000 four years from now, what is its book value now if sinking fund method of depreciation is used at 6% interest per year? A. ₱ 20,484.3487 B. ₱ 142,884.8574 C. ₱ 157,115.1426 D. ₱ 235,689.6667

The purchased price of the equipment is P12,000 and its estimated maintenance costs are P500 for the first year P1,500 for the second year and P2,500 for the third year. After three years of used equipment is replaced, it has no salvage value. Compute the present equivalent cost of the equipment using 10% interest. (capitalized cost with solution)

An Engineering Firm needs additional equipment for the completion of its project. The first   alternative is to purchase a brand new equipment worth P1,500,000 with P400,000 salvage value at   the end of its 15-year life. Daily operating cost using this equipment is P500. Second alternative is to   rent another equipment for P1,500 per day. What must be the minimum number of days per year the   equipment will be used so that purchasing this new equipment is more economical than renting   another if interest rate is 18%.

Show the use formula and please show the step by step solution to get the correct answer! Dont forget the cash flow diagram. Thank you, God bless :) 3. A contractor can buy trucks for P 800,000 each or rent them for P 1,200 per truck per day. The truck has a salvage value of P 100,000 at the end of its useful life of 5 years. The annual maintenance cost is P 20,000 per truck. Using the annual worth method and 14% interest rate, determine the minimum number of days per year that each truck must be used to warrant its purchase.