1) Titiwangsa Corporation is using a computer where its original cost was RM25,000. The machine is now 5 years old and has a current market value of RM5,000. The computer is being depreciated over a 10-year life toward zero salvage value. Depreciation is on straight line basis. Management is contemplating to purchase a new computer which will cost RM50,000 and the estimated salvage value is RM1,000. Expected savings from the new computer is RM3,000 a year. Depreciation is on straight line basis over a seven-year life and the cost of capital is 10%. If the tax rate is 50%, should the firm replace the asset?
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- PLEASE SOLVE THIS TWO PROBLEMS ASAP. THANK YOU! A. A machine costs P388868 with a salvage value of P18029 is expected to last for 28537 hours in 5 years. In the first year of service it was used for 8077 hours. Compute the book value at the end of the first year. B.The cost of a certain asset is P486042 , its life is 5 years and scrap value is P9050 . Find the cost of depreciation after the first year using a constant percentage method.An automated assembly robot that cost $300,000 has a recovery period of five years with an expected $50,000 salvage value. If the MACRS depreciation rates for years 1, 2, and 3 are 20.0%, 32.0%, and 19.2%, respectively, what is the depreciation recapture, capital gain, or capital loss, provided the robot was sold after 3 years for $80,000?← Daily Enterprises is purchasing a $10.5 million machine. It will cost $55,000 to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. If Daily uses straight-line depreciation, what are the depreciation expenses associated with this machine? The yearly depreciation expenses are $. (Round to the nearest dollar.)
- 8) A machine costing P2,500 has an estimated useful life of 4 years with a scrap value of P500. Compute its depreciation using A. Straight-line Method a. If the management will decide to sell the machine after 2 years, what is its book value? b. After 3 years, what is the accumulated depreciation? B. Sum of year's digit method a. If the management will decide to sell the machine after 3 years, what is its book value? b. After 2 years, what is the accumulated depreciation? 9) Crispin wants to buy a motorcycle. His mother will loan him some money at only 6% compounded quarterly. If Crispin estimates that he will be able to repay a total of P3,600 in 2 years, A. How much should he borrow from his mother today? B. How much is the discount interest that his mother will gain out of the loan? 10) Compute the simple interest and final amount of each loan Principal Rate Time Interest Final amount P 400 7% ? ? 1 year 3 months P 640 9% ? ? P 985 10% ? ? 180 days (ordinary time period) 60 days…LLED has purchased a new chip making machine for $1,500,000 with a salvage value of $100,000in 10 years. The LLED company is trying to determine the best method of depreciation. Create atable and calculate the deprecation amount for each year using straight line, double decliningbalance, and MACRS (10 yr property class). For SL and DDB we will not depreciate below thesalvage value. Using a MARR of 10% calculate the present worth of the depreciation deductions.Which is the preferred method of depreciation for LLED?Plz use excel and show formula !!!!!!! Benson Enterprises is deciding when to replace its old machine. The machine’s current salvagevalue is $1.2 million. Its current book value is $1 million. If not sold, the old machine will requiremaintenance costs of $420,000 at the end of the year for the next five years. Depreciation on theold machine is $200,000 per year. At the end of five years, it will have a salvage value of $220,000.A replacement machine costs $3.5 million now and requires maintenance costs of $160,000 at theend of each year during its economic life of five years. At the end of five years, the new machinewill have a salvage value of $540,000. It will be fully depreciated using the three-year MACRSschedule. In five years a replacement machine will cost $4,000,000. Pilot will need to purchasethis machine regardless of what choice it makes today. The corporate tax is 35 percent and theappropriate discount rate is 10 percent. The company is assumed to earn sufficient revenues…
- 2. The Kish Corporation is considering the purchase of a new commercial oven. The original cost of the company's existing oven was $250,000. The machine is now 10 years old and has a current market value of $50,000. The old oven is being depreciated over a 15-year useful life to a zero estimated salvage value on a straight-line basis. Management is contemplating the purchase of a new oven that costs $375,000 with an estimated salvage value of $25,000. Expected cash savings from the new oven are $45,000 a year (before tax), and the oven will require the company to increase working capital by $15,000. Depreciation is on a straight-line basis over a 5-year life, and the cost of capital is 9.50%. Assume a 21% tax rate. a. What is the net present value of the new machine? Should the replacement be made? b.Jing Inc. is considering the replacement of a piece of equipment with a newer model. The following data has been collected (see the attached image). If the old equipment is replaced now, it can be sold for P60,000. Both the old equipment’s remaining useful life and the new equipment’s useful life is 5 years. Each of the assets has no end-of-life salvage value. How much is the net advantage (disadvantage) of replacing the old equipment with the new equipment?A new CNC machine has an installed with a cost basis of $35,000 and an estimated service life of seven years. It will have a zero-salvage value at that time. The 200% declining balance method is used to depreciate this asset. What will the depreciation charge be in year seven? What will be the book value at the end of year six? c. What will be the gain (or loss) on the disposal of the asset if it is sold for $1,200 after six years?
- The Tenang Corporation is using a machine that originally cost RM88,000.00. The machine is being depreciated by the straight-line method over 8 years and has 4 years of depreciation remaining. The machine has a book value of RM44,000.00 and a current market value of RM40,000.00. Jacqueline , the Chief Financial Officer of Tenang, is considering replacing this machine with a newer model costing RM75,000. The new machine will save RM5,000 in after-tax earnings each year for the next six years. The new machine will be depreciated using straight line method. Tenang Corporation is in the 28% tax bracket and has a 10 percent cost of capital. REQUIRED: Calculate the cash inflows from the sale of the old machine.The Tenang Corporation is using a machine that originally cost RM88,000.00. The machine is being depreciated by the straight-line method over 8 years and has 4 years of depreciation remaining. The machine has a book value of RM44,000.00 and a current market value of RM40,000.00. Jacqueline , the Chief Financial Officer of Tenang, is considering replacing this machine with a newer model costing RM75,000. The new machine will save RM5,000 in after-tax earnings each year for the next six years. The new machine will be depreciated using straight line method. Tenang Corporation is in the 28% tax bracket and has a 10 percent cost of capital. REQUIRED: Calculate the cash inflows from the sale of the old machine. Calculate the net cost of the new machine. Calculate the incremental depreciation on the new versus the old machine. Determine the net present value of the new machine. Should they purchase the new machine? The NPV rule states that, “An investment should be accepted if the…A new CNC machine has an installed with a cost basis of $35,000 and an estimated service life of seven years. It will have a zero salvage value at that time. The 200% declining balance method is used to depreciate this asset. a. What will the depreciation charge be in year seven? b. What will be the book value at the end of year six? c. What will be the gain (or loss) on the disposal of the asset if it is sold for $1,200 after six years?