MNH firm revealed a large coal mine expected to mine 254 tons of coal. The firm invests $10264 for mining the coal. They are effective in extracting 50 tons of the coal in the first year. Then the depletion cost is: O 5051.18 O 4040.94 O 2020.47 O 3030.71 O 1010.24
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- Krostel Company is planning to acquire a machine costing P 500,000 with a useful life of 3 years with a salvage value of P 20,000. This machine will generate annual cash savings of P 250,000. Income taxes are 20%. The company uses the SYD method for computing depreciation. What is the accounting rate of return on the average cost of investment? a. 27.7% b. 32.7% c. 61.5% d. 76.7%Petroleum drilling equipment costs a company $125,000. The equipment has an estimated salvage value of $30,000. What is the allowable depreciation for this equipment in year 3? a. $18, 240 b. $19,000 c. $24,000 d. $25,000 A project costs $80,000 initially and will have a $15,000 salvage value after 3 years. The operating cost with this method will be $30,000 in year 1, increasing by $4000 each year. What is the PW of this project? I = 12% a. $12, 338 b. $150, 377 c. $-150,260 d. $2731Ten investors invested an amount of P 75 million each for coal mining at Sierra Madre Mountain. It is expected that the mine contains 5, 000, 000 tons of coal ores and due to latest technology, it can mine 125, 000 tons of unprocessed ores. The management expects an annual expenses of P 35 million, an annual miscellaneous expenses of P 12 million and milling, drilling and other procedural expenses yearly costs P 815 per ton of unprocessed ores of coal. After such process, 85% of the coal ores produces an income of P 1, 750 per ton. a) Find the annual depletion cost of the mine. b) Ten years after operation, the management annual expenses decreases an amount of P 4 million, annual miscellaneous expenses becomes P13 million and procedural expenses becomes P 920 per ton of unprocessed ores. After procedural process, 75% of unprocessed ores produces an income of P 1, 850 per ton. What would then be its average depletion cost annually for the remaining years of the mine?
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- Peabody Corporation has the following base-case estimates for its new small engine assembly project:• Price per unit= $500• Variable costs = $120 per unit• Fixed costs = $2.5 million• Demand = 20,000 units per year• Capital investment = $8 million at year 0• Product life = 8 years• Salvage value = $500,000• Depreciation method = seven-year MACRS• Tax rate= 35%• MARR = l2%Suppose the company believes that all of its estimates (except the product life, depreciation method, tax rate, and MARR) are accurate only to within ±20%.(a) What is the NPW of the project based on its base-case scenario?(b) What is the NPW of the project based on its best-case scenario?(c) What is the worst-case scenario?(d) What conclusion would you make aboul the project after seeing the scenario analyses?CC1 company is considering an investment (at time = 0) in a machine that produces arrows. The cost of the machine is 42205 dollars with zero expected salvage value. Annual production in units during the 3-year life of the machine is expected to be (starting at time = 1) 4046 , 7950, and 10350. The arrows sale price per unit is 13 dollars in year one and it is expected to increase by 6% per year thereafter. Production costs per unit will be 5 dollars in year one, and then increase by 4% per year. Depreciation on the machine is fixed at 14204 dollars per year, and the overall tax rate is 40%. and the minimum acceptable rate of return is 10% percent. Calculate the net present value of this investment. Assume all flows are at the end of each year. round your answer to the nearest cent.An energy production company has the following information regarding the acquisition of new gas-turbine equipment. Purchase price = $760,000 Transoceanic shipping and delivery cost = $4,300 Installation cost (1 technician at $1,600 per day for 4 days) = $6,400 Tax recovery period = 16 years Book depreciation recovery period = 10 years Salvage value = 10% of purchase price Operating cost (with technician) = $185,000 per year The manager of the department asked your friend in accounting to enter the appropriate data into the tax-accounting program. What are the values of B, n, and S in depreciating the asset for tax purposes that he should enter? The value of B is determined to be $ __. The value of S is determined to be $ __ The value of n is determined to be ___ years.