A certain equipment costs P7,000 has an economic life of n years and a salvage value P350 at the end of n years. If the book value at the end of 4 years is equal to P2197.22, compute for the economic life of the equipment using the sum of years digit method
Q: A machine purchased 3 years ago for $140,000 is now too slow to meet growing demand. The machine can…
A: Annual worth or AW is referred to as the easy way of understanding the annual amount, for instance,…
Q: A Machine costs ₱80,000 and an estimated life of 10 years with a salvage value of ₱5,000. What is…
A: Given:- Initial cost of asset(Machine)=P80,000Life=10 yearsSalvage value=P5,000 To calculate:- Book…
Q: Michelin is considering going ‘‘lights-out’’ in the mixing area of the business that operates 24/7.…
A: Equivalent uniform annual cost (EUAC) is used to evaluate the total cost of owning and operating an…
Q: Because it fumes at room temperatures, hydrochloric acid creates a very corrosive work environment.…
A: Business operation refers to the process of manufacturing and day-to-day activities. Business…
Q: A piece of equipment that was purchased 2 years ago by Toshiba Imaging for $50,000 was expected to…
A: In a replacement study, the existing hardware or asset that has to be replaced is referred to as the…
Q: A delivery car had a first cost of $24000, an annual operating cost of $19000, and an estimated…
A: The first cost of the delivery car was $24000.The annual operating cost was $19000.The estimated…
Q: QUESTION 3 Because it fumes at room temperatures, hydrochloric acid creates a very corrosive work…
A: Business operation refers to the process of manufacturing and day-to-day activities. Business…
Q: A piece of equipment has a first cost of $155,000, a maximum useful life of 7 years, and a market…
A: The objective of the question is to determine the economic service life and the respective annual…
Q: for $92,500 or sold to a smaller company for $40,000. The current machine will have an annual…
A: To decide whether the presently owned machine should be replaced at present or after 3 years from…
Q: An expansion of the current BIM (Building Information Model) software has been proposed to First…
A: The time period is indicated by ‘n’ and MARR is indicated by ‘i’.
Q: A machine costs P8000 and an estimated life of 10 years with a salvage value of P500. What is its…
A: The straight-line method is a method for calculating the book value of an asset over time, by…
Q: A machine purchased 3 years ago for $140,000 is now too slow to satisfy the demand of the customers.…
A: The concept of equivalent annual worth (AW) is a way of comparing the annual cash flows of different…
Q: Hydrochloric acid, which fumes at room temperatures, creates a very corrosive work environment. A…
A: Step 1: To compute the Minimum trade-in -value, the annual worth of the current and the new machine…
Q: A piece of equipment has a first cost of $175,000, a maximum useful life of 7 years, and a market…
A: Given The first cost of the equipment is $175,000Salvage value S = 12000 - 13,000k Annual operating…
Q: A critical machine in BHP Billiton's copper refining operation was purchased 7 years ago for…
A:
Q: A critical machine in BHP Billiton's copper refining operation was purchased 7 years ago for…
A: The objective of the question is to determine when the company should replace the machine using the…
Q: and 4 years, and $-65,000 if it is kept for 5 to 10 years. If the company uses a specified 3-year…
A: *answer: . As planning horizon is only 3 yrs AW of defender for 2 yrs = -74000 is lower than AW of…
Q: A machine for refining operation was purchased / years ago for 160,000 SAR. Last year a replacement…
A: Here we calculate the net annual worth by using the given information and compare them , so the…
Q: A critical machine in BHP Billiton's copper refining operation was purchased 7 years ago for…
A: An approach for comparing investments with inconsistent cash flows over time is annual worth (AW).…
Q: An engineer calculated the AW values shown for retaining a presently owned machine additional years.…
A: Economic service life, often referred to as the economic life or service life, is a concept in…
Q: A large standby electricity generator in a hospital operating room has a first cost of $61,000 and…
A: The annual worth measures the overall cost of an investment or project over its lifespan. It…
Q: Hayden Inc. has a number of copiers that were bought four years ago for $39,000. Currently…
A: Net cash flows are the total amount that a business makes or loses over a specific time period. A…
Q: In trying to determine the economic service life of a new piece of equipment, an engineer made the…
A: (a) The annual value (TA) of the cost can be calculated using the formula as follows.
Q: A large, standby electricity generator in a hospital operating room has a first cost of $70,000 and…
A:
Q: Leroy purchased an Al-based robotics system with the first cost of $345,000, an AOC of $148,000 per…
A: Given; Purchase cost of AI-based robotics system= $345000 Annual operating cost= $148000 per year…
Q: A large standby electricity generator in a hospital operating room has a first cost of $73,000 and…
A: Answer; AW value is $20611.67
Q: a) The current machine should be replaced [[(Click to select) b) The equivalent AW for the next…
A: The concept of equivalent annual worth (AW) is a way of comparing the annual cash flows of different…
Q: A milling machine with enhanced CNC controls that allow for high-speed machining of free-form parts…
A: One of the fundamental analyses in capital budgeting is replacement analysis. Physical…
Q: Hydrochloric acid, which fumes at room temperatures, creates a very corrosive work environment. A…
A: Step 1:To determine the minimum trade-in value that will make the challenger economically appealing,…
Q: A piece of equipment has a first cost of $175,000, a maximum useful life of 7 years, and a market…
A: The equivalent uniform yearly cost or value of an investment across its lifetime, taking into…
Q: A piece of equipment has a first cost of $190,000, a maximum useful life of 7 years, and a market…
A: 1. Define Variables and Functions:Interest rate (i) = 8% = 0.08Maximum useful life (n) = 7…
Q: Company X is looking to expand their operations to add a second product line capable of producing…
A: Given information Sales units Year 1 2 3 4…
Q: Nuclear safety devices installed several years ago have been depreciated from a first cost of…
A: Initial Cost = 200000 The device can be sold for = 15000 Upgradation cost = 9000 Operating Expenses…
Q: For P500, 000, an engineer purchased a piece of equipment. He added another P40,000 to his budget…
A: Depreciation per year (D) = Cost of the Asset - Salvage ValueUseful LifeD = (500000 + 40000) - x%…
Q: A piece of equipment has a first cost of $170,000, a maximum useful life of 7 years, and a market…
A: Given The first cost of equipment FC =170,000 Salvage value S=120,000-21000k Annual operating cost…
Q: 3000 this year and increasing 10% each year. Determine the marginal cost of extending the service…
A: Given : Market Value==$60000 Drop in market value each year=$2000 Maintenance cost for 4 years=$3000…
Q: A machine that cost $120,000 3 years ago can be sold now for $51,500. Its market value is expected…
A: Annual worth shows the costs and benefits in terms of cash for a good, asset or investment over the…
Q: For equipment that has a first cost of RM 10,000 and the estimated operating costs and year-end…
A: Operating costs are ongoing expenses incurred as a result of the normal day-to-day operations of a…
Q: A critical machine in BHP Billiton's copper refining operation was purchased 7 years ago for…
A: To compare the alternatives we will find the annual worth of expenses with making use of the…
Q: A machine purchased 3 years ago for $140.000 is now too slow to satisfy the demand of the customers.…
A: The annual worth is the net of the relative multitude of advantages and costs brought about north of…
Q: Digital Tech Dynamics purchased a new quality inspection system for $550,000. The estimated salvage…
A: The objective of this question is to determine the minimum trade-in value necessary now to make the…
Q: A machine was bought three years ago for $200,000 with the expected life of 8 years and a salvage…
A: Given: Old machine: Cost=$200000, Salvage value=$20000, Life=8 years, Selling price=$100000, Annual…
Q: Required information For equipment that has a first cost of $10,500, the estimated operating costs…
A: Part 2: Explanation:Step 1: Calculate the present value of each year's operating costs and salvage…
Q: Stahmann Products paid $350,000 for a numerical controller and had it installed at a cost of…
A: The straight-line method (SLM), declining balance depreciation (DDB), and sum of years digit methods…
Q: one factory manager bought a rare machine for $10 million. It is estimated that the sales value of…
A: To find the economic life out of the following options we will find the annual worth of the rare…
Q: A piece of equipment has a first cost of $150,000, a maximum useful life of 7 years, and a market…
A: Annual worth is a financial metric used to determine the equivalent uniform annual cost or value of…
Q: A computerized fabricating system has a first cost of $180,000, and an annual operating cost of…
A: As given First cost = $180,000 MARR = 15% per year Operating cost = $84000 in year 1 and year 2…
A certain equipment costs P7,000 has an economic life of n years and a salvage value P350 at the end of n years. If the book value at the end of 4 years is equal to P2197.22, compute for the economic life of the equipment using the sum of years digit method.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- The beautiful expert Hand written solution is not allowed.Part a.) An engineer with Calahan Technologies calculated the AW of cost values shown for a presently owned machine using estimates she obtained from the vendor and company records. A challenger has an economic service life of 7 years with an AW of $-86,000 per year. Assume that all future costs remain as estimated and the challenger's technology will definitely replace that of the defender within 5 years. When should the company purchase the challenger? Retention Period, Years AW of Costs, $ per Year -92,000 2 -81,000 -87,000 4 -89,000 5 -95,000 Part b.) The costs and revenue projections for a new product made on the machine from Part a.) are estimated below. What is the estimated profit at a production rate of 25% above breakeven? Fixed cost = $592,000 per year Production cost per unit = $198 Revenue per unit = $330Digital Tech Dynamics purchased a new quality inspection system for $550,000. The estimated salvage value was $50,000 after 10 years. Currently, the expected remaining life is 7 years with an AOC of $67,500 per year and an estimated salvage value of $40,000. The new president has recommended early replacement of the system with one that costs $430,000 and has a 12-year economic service life, a $35,000 salvage value, and an estimated AOC of $50,000 per year. If the MARR for the corporation is 12% per year, use factor-based relations to determine the minimum trade-in value necessary now to make the president's replacement economically advantageous. The minimum trade-in value necessary now to make the president's replacement economically advantageous is $[
- A machine purchased 3 years ago for $140,000 is now too slow to satisfy the demand of the customers. It can be upgraded now for $88,000 or sold to a smaller company internationally for $50,000. The upgraded machine will have an annual operating cost of $88,000 per year and a $24,000 salvage value in 3 years. If upgraded, the presently owned machine will be retained for only 3 more years, then replaced with a machine to be used in the manufacture of several other product lines. The replacement machine, which will serve the company now and for a maximum of 8 years, costs $223,000. Its salvage value will be $56,000 for years 1 through 5: $20,000 after 6 years; and $10,000 thereafter. It will have an estimated operating cost of $45,000 per year. Perform an economic analysis at 11% per year using a specified 3-year planning horizon. a) Determine if the current machine should be replaced now or 3 years from now. b) Once decided, determine the equivalent AW for the next three years. a) The…Because it fumes at room temperatures, hydrochloric acid creates a very corrosive work environment. A machine working in that environment is deteriorating quickly and can be used for only one more year, at which time it will be scrapped with no salvage value. It was purchased 3 years ago for $88,000, and its operating cost for the next year is expected to be $49,000. A more corrosion-resistant challenger will cost $206,000 with an operating cost of $46,000 per year. It is expected to have a $50,000 salvage value after its 10-year ESL. At an interest rate of 8% per year, what minimum replacement value would render the challenger attractive? The minimum replacement value that would render the challenger attractive is $ .Kermit bought a production line 5 years ago for $35,000. At that time it was estimated to have a service life of 10 years and salvage at the end of its service life of $10,000. Kermit's CFO recently proposed to replace the old line with a modern line expected to last 15 years and cost $95,000. This new line will provide $7,000 savings in annual operating and maintenance costs, and have a salvage value of $15,000 at the end of 15 years. The seller of the new line is willing to accept the old line as a trade-in for its current fair market value, which is $12,000. The CFO estimates that if the old line is kept for 5 more years, its salvage value will be $6,000. We are looking at performing a replacement analysis. The defender must be analyzed using a first cost of and a salvage value of for years. The challenger must be analyzed using a first cost of and a salvage value of for years. Enter the answers as 12345. DO NOT enter $ symbol or comma separators. DO NOT enter decimal places.
- A machine purchased 3 years ago for $140,000 is now too slow to satisfy the demand of the customers. It can be upgraded now for $86,000 or sold to a smaller company internationally for $47,000. The upgraded machine will have an annual operating cost of $92,000 per year and a $37,000 salvage value in 3 years. If upgraded, the presently owned machine will be retained for only 3 more years, then replaced with a machine to be used in the manufacture of several other product lines. The replacement machine, which will serve the company now and for a maximum of 8 years, costs $222,000. Its salvage value will be $57,000 for years 1 through 5; $20,000 after 6 years; and $10,000 thereafter. It will have an estimated operating cost of $45,000 per year. Perform an economic analysis at 9% per year using a specified 3-year planning horizon. a) Determine if the current machine should be replaced now or 3 years from now. b) Once decided, determine the equivalent AW for the next three years. a) The…Use the information given below to calculate the annual Economic Order Quantity The following details have been supplied by Nola Limited for one of its products:Sales per month 7 500 unitsCarrying costs as a percentage of the unit purchase price 20%Purchase price per unit R100Cost of placing an order R10A Machine costs ₱80,000 and an estimated life of 10 years with a salvage value of ₱5,000. What is the book value after 5 years using Sum of the Years Digit Method. Answer: BV5=₱25,454.5Show Solution
- Digital Tech Dynamics purchased a new quality inspection system for $550,000. The estimated salvage value was $50,000 after 10 years. Currently, the expected remaining life is 7 years with an AOC of $27,500 per year and an estimated salvage value of $40,000. The new president has recommended early replacement of the system with one that costs $380,000 and has a 12-year economic service life, a $35,000 salvage value, and an estimated AOC of $50,000 per year. If the MARR for the corporation is 12% per year, use factor-based relations to determine the minimum trade-in value necessary now to make the president's replacement economically advantageous The minimum trade-in value necessary now to make the president's replacement economically advantageous is $[A material handling system was purchased 3 years ago for $128,355. Two years ago it required substantial upgrading at a cost of $17,158. It once again is requiring an upgrading cost of $27,127. Alternately, a new system can be purchased today at a cost of $195,603, with a salvage value of $18,627. The existing machine could be sold today for $52,114. In an economic replacement analysis, what first cost should be assigned to the existing system? Enter your answer as follow: 123456.78Searching for ways to cut costs and increase profit, one of the industrial engineers at Home Comfort Furniture Manufacturers, Inc. determined that the equivalent annual worth of an existing machine over its remaining useful life of 2 years is $-74,000 per year. The IE also determined that used machines like the one currently in use are not available any longer, but the defender can be replaced with a challenger that is more advanced. It will have an AW of $-77,550 if it is kept for 2 years or less, $-71,575 if it is kept between 3 and 4 years, and $-65,000 if it is kept for 5 to 10 years. If the company uses a specified 3-year planning horizon and an interest rate of 9% per year. a) Determine when the company should replace the machine. b) Determine the AW for the next 3 years. a) The company should (Click to select) b) The AW for the next 3 years is $
