A casting company is considering the replacement analysis of a furnace. If it is bought from A factory, annual operating and maintenance costs will be 50.000 TL/year. It can be kept for 10 years. The purchase cost is 300.000 TL. The scrap value is 15.000 TL. If the furnace is bought from the B factory, the annual operating and maintenance cost will be 30.000 TLAyear. Economical life of this machine is 5 years. The purchase cost is 250.000 TL and the Scrap Value is 25.000 TL. Capital cost is 25% for two factories. Based on these data, what will be the present value (TV) of the annual operating expense of alternative A? O A) 188525 O B) 198525 O C) 178525 D) 158525 E) 168525

A casting company is considering the replacement analysis of a furnace. If it is bought from A factory, annual operating and maintenance costs will be 50.000 TL/year. It can be kept for 10 years. The purchase cost is 300.000 TL. The scrap value is 15.000 TL. If the furnace is bought from the B factory, the annual operating and maintenance cost will be 30.000 TLAyear. Economical life of this machine is 5 years. The purchase cost is 250.000 TL and the Scrap Value is 25.000 TL. Capital cost is 25% for two factories. Based on these data, what will be the present value (TV) of the annual operating expense of alternative A? O A) 188525 O B) 198525 O C) 178525 D) 158525 E) 168525

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 17EB: Caduceus Company is considering the purchase of a new piece of factory equipment that will cost...

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