Am. 154. 2. A company has decided to replace its inspection machine with an advanced one. Theadvanced machine costs $15,000 and will have operating costs of $3,600 in the first year,increasing by $2,000 per year thereafter. The expected salvage value of the new machine is$6,000 at the end of the first year and will decline by 10% each year (with respect to theprevious year).a.Find the missing values in the following table.Determine the economic life of the new machine.b.NCR (8%)OC (8%)Total Cost (8%)10,2003,60013,800???4332.365,495.82??6,406.46?..........3086.317,293.4210,379.7312345OPTIMAL N =?

When dealing with equipment replacement, it is necessary to evaluate both the upfront expenditures…

Answered: 2. A company has decided to replace its…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Twelve years ago, an industrial facility bought a boring machine for P65,000. The estimated life of this machine is25 years and a depreciation reserve had been placed based on this. The price of the latest model is P125,000 andthe facility owner wants to replace the machine with this latest model. The old unit can be sold for P18,000. Howmuch new capital will be required for the purchase?
9.1 The Arkansas Division of ADM, a large agricultural products corporation, pur- chased a state-of-the-art ground-leveling system for rice field preparation 3 years ago for $120,000. When purchased, it had an expected service life of 10 years, an estimated salvage of $25,000 after 10 years, and AOC of $30,000. Current account book value is $80,000. The system is deteriorating rapidly; 3 more years of use and then salvaging it for $10,000 on the international used farm equip- ment network are now the expectations. The AOC is averaging $30,000. A substantially improved, laser-guided model is offered today for $100,000 with a trade-in of $70,000 for the current system. The price goes up next week to $110,000 with a trade-in of $70,000. The ADM division engineer estimates the laser-guided system to have a useful life of 10 years, a salvage of $20,000, and an AOC of $20,000. A $70,000 market value appraisal of the current sys- tem was made today. If no further…
Allen Construction purchased a crane 6 years ago for $130,000. They need a crane of this capacity for the next 5 years. Normal operation costs $35,000 per year. The current crane will have no salvage value at the end of 5 more years. Allen can trade in the current crane for its market value of $40,000 toward the purchase of a new one, which costs $150,000. The new crane will cost only $8,000 per year under normal operating conditions and will have a salvage value of $55,000 after 5 years. If MARR is 20%, determine which option is preferred. a) Use cash flow approach (insider's viewpoint approach) b) Use the opportunity cost approach (outsider's viewpoint approach)
1. A machine costs $ 10,000 and is expected to be scrapped for $ 1,500 inthe moment he retires. Operating expenses for the first year are expected to be$ 3,500 and increasing by $ 400 as a result of the impairment; and operating incomeEstimated $ 20,000 If the MARR is 15%, determine the economic life of the machine.
9.16 You purchased a molding machine at a cost of $88,000. It has an estimated useful life of 12 ycars with a salvage value of $8,000. Determine the following: (a) The amount of annual depreciation computed by the straight-line method. (b) The amount of depreciation for the third year computed by using the double- declining-balance method.
An asset for drilling was purchased and placed in service by a petroleum production company. Its cost basis is $60,000, and it has an estimated MV of $12,000 at the end of an estimated useful life of 14 years. Double declining balance method is used to calculate the depreciation cost. a. What is the book value of the asset at the end of 5 years? b. What is the depreciation amount in the third year?
Wildhorse Company purchased a computer for $9,440 on January 1, 2019. Straight-line depreciation is used, based on a 5-year life and a $1,180 salvage value. On January 1, 2021, the estimates are revised. Wildhorse now feels the computer will be used until December 31, 2022, when it can be sold for $590. Compute the 2021 depreciation. (Round answer to 0 decimal places, eg. 45,892) Depreciation expense, 2021 $
A certain equipment costs P 7,000 and a salvage value of P 350 at the end of its economic life. Using SYD method of depreciation, the book value at the end of 4 years is P 2,197.22. Compute the economic life of the equipment, in years.
Quèstion 25 An equipment costing P 360 000 has an estimated scrap value of P 25,000 at the end of its economic life of 11 years. Using Double-Declining Balance Method, what is the book value after 7 years? Exprees your answer in whole number. « > A Moving to another question will save this response. acer Prtsc Pause Del Home F8 F9 F10 F11 F12 F4 F5 F6 F7 Scr Lk SysRq Break F3 Coca-Cla % & -Backspac € 6 7 8 9 5 W R Y H
(Chapter 13) A $20,000 machine will be purchased by a company with an MARR of 10%. It will cost $5,000 to install and removal costs are insignificant. What is its economic life and minimum EUAC cost given the following O&M costs: YR, n 1 2 3 4 5 O&M $5,000 $8,000 $11,000 $14,000 $17,000
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
617 8. A machine has a first cost of P200,000 with a scrap value of P25,000 at the end of Its economic life of 10 years. Find its book value after 8 years using the Double Declining Balance Method. 出

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

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

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

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

SEE MORE TEXTBOOKS