A car worth P 1.75 million was acquired by an engineer seven years ago and he plans to sell it an amount of P1 million today. If the car’s depreciation uses a Sinking fund Method with i = 10% and scrap value is also 10% of the cash price after its 15-year life, how much is the sunk cost?

The PARC Company can purchase gizmos to be used in building whatsits for $90 each. PARC can manufacture their own gizmos for $7000 per year overhead cost plus $25 direct cost for each gizmo, provided they purchase a gizmo maker for $100,000. PARC expects to use gizmos for 10 years. The gizmo maker should have a salvage value of $20,000 after 10 years. PARC uses 12% as its minimum attractive rate of return. At what annual production rate N should PARC make its own gizmos?

Consider the market for rubber. suppose a massive forest fire causes 50% of the world’s supply of rubber to be destroyed. First, depict what happens in the market for rubber. Then, depict what happens in the market for tires (where rubber is an input). Last, depict what happens in the market for cars, where tires are an input. What happened to the price of cars? Now, suppose that in order combat this event, the government announces that starting in three months (i.e. in the future), the government will give a $1000 rebate on purchases of new cars (i.e. the price of cars will decrease in the future). What happens in the market for new cars today? What happens in the market for used cars today? Finally, what is the net effect of everything that occurred on new/used cars equilibrium price and quantity (Hint: for one of these market’s variables, the net effect will be ambiguous)?

Company X is looking to expand their operations to add a second product line capable of producing 1.25 Million units per year. The total estimated investment cost for the new line is $25 Million, with a salvage value equal to 20% of the purchase price at the end of the 6-year project life. The annual expected sales volume is shown below, in thousands of units:     Year         1               2              3             4              5                6Volume    525,000   600,000   725,000   800,000   925,000   1,000,000 The average selling price is fixed for the project life at $125 per unit. Variable costs (per unit) include $35 for materials, $20 for manufacturing, and $18 for labor. There are additional fixed operating and maintenance costs totaling $14.25 Million per year. The company’s working capital calculations are based on a 2.5-month supply of raw materials and 1.5 months of combined inventory (WIP and finished goods) that it maintains to balance overall industry demand. FX…

Nuclear safety devices installed several years ago have been depreciated from a first cost of $200,000 to zero using the Modified Accelerated Cost Recovery System (MACRS). The devices can be sold on the used equipment market for an estimated $15,000, or they can be retained in service for 5 more years with a $9000 upgrade now and an operating expenses (OE) of $6000 per year. The upgrade investment will be depreciated over 3 years with no salvage value. The challenger is a replacement with newer technology at a first cost of $40,000, n=5 years, and S=0. The new units will have operating expenses of $7000 per year. Use a 5-year study period, an effective tax rate of 41%, an after-tax minimum acceptable rate of return (MARR) of 10% per year, and an assumption of classical straight line depreciation (no half-year convention) to perform an after-tax AW-based replacement study. The annual worth of the defender is determined to be $10000 The annual worth of the challenger is determined to be…

Required information Nuclear safety devices installed several years ago have been depreciated from a first cost of $200,000 to zero using the Modified Accelerated Cost Recovery System (MACRS). The devices can be sold on the used equipment market for an estimated $15,000, or they can be retained in service for 5 more years with a $9000 upgrade now and an operating expenses (OE) of $6000 per year. The upgrade investment will be depreciated over 3 years with no salvage value. The challenger is a replacement with newer technology at a first cost of $40,000, n = 5 years, and S= 0. The new units will have operating expenses of $7000 per year. Use a 5-year study period, an effective tax rate of 39%, an after-tax minimum acceptable rate of return (MARR) of 17% per year, and an assumption of classical straight line depreciation (no half-year convention) to perform an after-tax AW-based replacement study. Loe anfaat wordt The annual worth of the challenger is determined to be $ Since the annual…

Required information For equipment that has a first cost of $10,500, the estimated operating costs and year-end salvage values are as shown. Year Operating Cost, $ Salvage Value, $ 1 -1,000 7,000 2 -1,200 5,000 3 -1,300 4,500 4 -2,000 3,000 5 -3,000 2,000 Determine the economic service life ESL, at i= 10% per year using factors. The economic service life ESL, is 4 O years with the AW $- 5982.12 =

A chemical plant worth P 110M has an estimated life of 6 years and a projected scrap value of P 10M.  after 3 years of operation an explosion made it a total loss.  How much money would have to be raised to put up a new plant costing P 150M, if depreciation reserved had been maintained during its 3 years of operation by Straight Line method?

The first cost of any property includes: the original purchase price and freight and transportation charges installation expenses initial taxes and permits fee all of the above

Required information Nuclear safety devices installed several years ago have been depreciated from a first cost of $200,000 to zero using the Modified Accelerated Cost Recovery System (MACRS). The devices can be sold on the used equipment market for an estimated $15,000, or they can be retained in service for 5 more years with a $9000 upgrade now and an operating expenses (OE) of $6000 per year. The upgrade investment will be depreciated over 3 years with no salvage value. The challenger is a replacement with newer technology at a first cost of $40,000, n=5 years, and S=0. The new units will have operating expenses of $7000 per year. Use a 5-year study period, an effective tax rate of 41%, an after-tax minimum acceptable rate of return (MARR) of 12% per year, and an assumption of classical straight line depreciation (no half-year convention) to perform an after-tax AW-based replacement study. The annual worth of the defender is determined to be $[ The annual worth of the challenger is…