A lessor made an investment of ₱550,000 in equipment with an expected life of 5 years. He determined that he will incur the following annual costs: Costs of sales₱120,000; Marketing, admin, and maintenance ₱150,000. Tax rate is 25%. Annual depreciation is ₱110,000. Cost of capital is 11%. The breakeven lease per year would be? ₱ 460,000 ₱ 503,717 ₱ 521,756 ₱ 468,203 ₱ 436,127 ₱ 324,846

Q: A company is considering purchasing a new piece of machinery at a cost $50,000. It is expected to…

A: Economic Value Added Economic value added is referred to as the economic profit which is calculated…

Q: A corporation expects to receive $32,000 each year for 15 years from the sale of a product. There…

A: Rate of return is the annual income in percentage earned from an investment.

Q: What is the capitalized cost of a Sugar Mill Plant w/c requires Php 5,000,000 for construction ,Php…

A: Construction cost = Php 5,000,000 Operating expense for first 7 years = Php 100,000 Operating…

Q: Beemer Construction Company is considering selling excess machinery with a book value of $280,000…

A: Cost of selling=Sale value×Brokerage=$221,000×5%=$11,050

Q: An asset costs $630,000 and will be depreciated in a straight-line manner over its three- year life.…

A: NAL(Net Advantage of Leasing) shows amount saved by company by leasing an fixed asset instead of…

Q: A lessor made an investment of ₱550,000 in equipment with an expected life of 5 years. He expects…

A: The NPV is calculated as difference of present value of cash inflows and initial investment

Q: A company plans to purchase a piece of equipment that costs $192,000 and qualifies for five-year…

A:

Q: Keating Co. is considering disposing of equipment with a cost of $74,000 and accumulated…

A: Preparation of income statement helps the business entity in determining how much amount of gross…

Q: ABC, Inc. purchased an equipment at time=0 for $135,077. The shipping and installation costs were…

A: Calculation of Cash Flow in Year 4:The cash flow in year 4 is $123,123.96.Excel Spreadsheet:

Q: Antonio, Inc., has invested in new production equipment at a cost of $24,000. The equipment has an…

A: The payback period (PBP) is the amount of time that is expected to recover the investment costs…

Q: ABC, Inc. purchased an equipment at time=0 for $84,362. The shipping and installation costs were…

A: Calculation of Cash Flow in Year 3:The cash flow in year 3 is $64,637.16.Excel Spreadsheet:

Q: A local delivery company has purchased a delivery truck for $15,000. The truck will be depreciated…

A: Computation:

Q: A lessor made an investment in an asset with net cost of investment of ₱800,000 and intends to lease…

A: The question is related to Breakeven lease. The details are given below.

Q: Burlington Construction Company is considering selling excess machinery with a book value of…

A: Income statement includes revenues, expenses and net income or loss for the company.

Q: A man invests in a project that requires a fixed capital of P 2.5 M with no salvage, and life of 12…

A: Here, Initial Investment is P2,500,000 Salvage Value is 0 Life is 12 years Annual Maintenance Cost…

Q: John Walker Company is planning to buy a new machine costing Php2,000,000 with a useful life of five…

A: 1) Payback period = Initial investment                                   -------------------…

Q: Inman Industries is considering selling excess machinery with a book value of $279,700 (original…

A: Commission on sale = Proceeds from sale x % commisson = $276,200 x 6% = $16,572

Q: A division is considering the acquisition of a new asset that will cost $730,000 and have a cash…

A: Given the following information Cost of the new asset: $730,000 Annual Cashflow: $281,500 Life of…

Q: A company needs to decide whether to buy or lease new equipment. The equipment can be purchased for…

A: Lease payment means those payments which are paid for the purpose of taking an asset on lease. These…

Q: Certain new machinery, when placed in service, is estimated to cost $180,000. It is expected to…

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Q: Hammer Corporation wants to purchase a new machine for $387,000. Management predicts that the…

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Q: 2. What is the capitalized cost of a Sugar MilI Plant w/c requires Php 5,000,000 for construction…

A: Expense The cost that an organization incurs for revenue generation is known as an expense. Accrual…

Q: A lessor made an investment of ₱550,000 in equipment with an expected life of 5 years. He expects…

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Q: ucky Cement wants to evaluate an acquisition of an equipment worth Rs 300,000. Its marginal tax rate…

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Q: The project to convert the infrastructure into an office complex that will generate annual revenues…

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Q: A potential investment has a cost of $542,500 and a useful life of 7 years. Annual cash sales from…

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Q: A local delivery company has purchased adelivery truck for $15,000. The truck will be depreciated…

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Q: An investment of $1,250,000 is made in 7-year MACRS-GDS equipment. The investment yields annual…

A: Present Worth analysis is the estimation of the discounted value of future cash flows. It is used to…

Q: An asset was purchased for P66,000. The asset is expected to last for 6 years and will have a…

A: Net income = income before tax - tax = 7200- 7200*0.30 = 5040

Q: Harper Corporation has the following information about the purchase of a new piece of equipment:…

A: Gross profit is $50,000 per year Cost of equipment is  $130,000 Salvage value at the end of the 8 th…

Q: company is considering constructing a plant to manufacture a proposed new pre 0,000.00, the…

A: In this we have to calculate initial investment in projects and than calculate the payback…

Q: Suppose that the new equipment has a cost basis of $12,000 and a salvage value of $3,0 of 6 years.…

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Q: A lessor made an investment of ₱550,000 in equipment with an expected life of 5 years. He determined…

A:

Q: Munir S/B has provided the following data concerning a proposed investment project:…

A: The annual capital allowance is calculated by dividing initial investment by the term for which…

Q: A company is considering purchasing a new piece of machinery at a cost $60,000. It is expected to…

A: Economic Value Added = Net Operating Profit After Tax - ( Cost of Capital * Invested Capital)

Q: Burlington Construction Company is considering selling excess machinery with a book value of…

A: Brokerage commission = Sales value x 6% = $90000 x 6% = $5,400

Q: Keating Co. is considering disposing of equipment with a cost of $66,000 and accumulated…

A: A lease is an agreement delineating the terms under which one party consents to lease property…

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Q: An asset costs $420,000 and will be depreciated in a straight-line manner over its 3-year life. It…

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Q: COL Inc. can either purchase an equipment for $650,000 or lease it from LEN Inc. by making 12 annual…

A:

Q: An asset was purchased for P66,000. The asset is expected to last for 6 years and will have a…

A: Accounting rate of return(ARR), one of the techniques of capital budgeting is defined as the…

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.