A certain machinery costs P 1,021,778 which will last for 18 years with a salvage value of P 144,755. Money is worth 20%. If the owner decides to sell it after using it for 6 years, what should his price be so that he will not lose or gain financially in the transaction?

A certain machinery costs P 1,021,778 which will last for 18 years with a salvage value of P 144,755. Money is worth 20%. If the owner decides to sell it after using it for 6 years, what should his price be so that he will not lose or gain financially in the transaction?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Mr. Rankine bought a piece of property for P 120,000 down payment and 10 deferred semi-annual…

A: Time Value of Money :— According to this concept, value of money in present day is greater than the…

Q: ezero salvage value. It would offer the following profics to the comp NET PROFIT 68.000 -52.000…

A: Net Present Value and Payback period are used in capital budgeting to evaluate the profitability of…

Q: The XYZ Company is contemplating the purchase of a new milling machine. The purchase price of the…

A: In this we have to calculate the annual worth of cost and benefits and see how much is the…

Q: A certain equipment costs P 250,000, lasts 10 years with a salvage value of P25.000. Money is worth…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: depreciated on the reducing-balance

A: Year Opening book value (A) Depreciation (B =A * 40%) Closing book value or NBV (A - B) 1 RM41,000…

Q: A newly-built business property, containing space for a store and two offices, can be purchased for…

A: Answer - Part 1 - Particulars Amount Annual Revenue 458460 Annual Cost :…

Q: SABIC purchased a machine for SA 120,000. The machine can be used for two years with salvage value…

A: Calculate the present worth Present Worth = -120,000 +90,000/(1.12)^1+ 70,000/(1.12^2) +…

Q: A brand new car costs ₱500,000 and the salvage value is 10% of the original cost after 20 years.…

A: The straight-line depreciation method gradually reduces the value of an asset over time till it…

Q: You purchased a warehouse eight years ago for P3.5M. Since then you had rented it out for…

A: Future value of a present value is the value of that amount after taking into account the time value…

Q: A delivery car had a first cost of $ 34,000, an annual operating cost of $ 17,000, and an estimated…

A: Annual worth consists of the annual operating cost and equivalent annual cost of first cost with…

Q: The total cost of a boiler is P1235902 including taxes and it can last up to 10 years. The company…

A: SYD = Sum of years depreciation Sum of years = ( n + 1) * ( n / 2 ) n = number of years = 10 years…

Q: Your facility is undergoing a major expansion, which will require significant capital investment…

A: Cost of the machinery = $7.2 million The 7-year MACRS depreciation rates are…

Q: A certain machinery costs P 50,000, last 12 years with a salvage value of P 5,000. Money is worth…

A: Sale price has to be equal to 9280.67

Q: Sandia Inc. wants to acquire a $360,000 computer-controlled printing press. If owned, the press…

A: Computation of Present Value of buying : Present value of Buying = Cost of Press + (After Tax annual…

Q: The heat loss through the windows of a home is estimated to cost the homeowner $338 per year in…

A: The Net Present Value (NPV) is employed to evaluate a sequence of cash flows occurring at different…

Q: In the System, if you sell an asset that belongs to a particular class that faces a depreciation…

A: When you sell equipment after using the equipment and if that is sold above value than there is…

Q: A piece of equipment costs ₱378,000 including shipping, installation and taxes. The supplier assures…

A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…

Q: Acme is considering the sale of a machine with a book value of $160,000 and 3 years remaining…

A: Profit on sale = Sales value - book value = P200,000 - 160,000+ = P40,000

Q: A company is considering two alternatives with regards to equipment which it needs. The alternatives…

A: In this question, we have to calculate the number of days per year for which Alternative A should be…

Q: Fairfield Properties owns real property that is MACRS depreciated with n = 39 years. They paid $3.4…

Q: CLO-7) Company would lke to buy a machine in 202. The ife of the machine is 15 years with salvage…

A: Asset refers to any economic value resource for an individual, corporation or a country. It…

Q: 7) purchase a new one or upgrade the existing machine. The existing machine has a remaining life of…

A: Present worth means present value of the project or net profit generate or cost occur during the…

Q: 2. The purchased price of the equipment is P12,000 and its estimated maintenance costs are P500 for…

A: Purchase price = P 12000 Maintenance cost for first year = P 500 Maintenance cost for second year =…

Q: A machine can be purchased at t=0 for $20,000. The estimated life is 15 years, with an estimated…

A: While evaluating the project, cash inflow should be higher than cash outflow in present value terms.…

Q: An equipment was purchased for P100,000 cash and the balance will be paid at the end of each quarter…

A: Interest rate = 6% Quarterly Payment = P 20,000 Time Period = 5 Years

Q: Zhang Company is considering the purchase of a new machine. Its invoice price is $200,000, freight…

A: please give a like your response matters Year 0 Year 1 Year 2 Year 3 Year 4…

Q: An automobile purchases for use by the manager of a firm at a price of 24000 euros is to be…

A: The question is based on the concept charge of depreciation from fixed asset. The net book value at…

Q: A remotely situated fuel cell has an installed cost of BD2,000 and will reduce the existing expen:…

A: Salvage value is the book value of an asset (like an equipment or a machinery) after all…

Q: A machine now in use, which was bought five years ago for $4,000, has been fully depreciated. It can…

A: Opportunity cost: The opportunity cost is the benefit that has been lost due to the selection of…

Q: Jose and his friend invest in a machine for their business that costs P1,200,000.00. The machine has…

A: Calculation of Depreciation for 5th year Depreciation = Cost of Asset x Factor for Depreciation…

Q: considering the replacement of a piece of equipment with a newer model. The following…

A: Depreciation is term to book cost of fixed assets. There are various methods of depreciation such…

Q: The price of a car depreciates by 25% each year. Find the price of a car after 5 years if it is…

A: Depreciation refers to the process whereby the asset value is gradually declines due to the wear and…

Q: A cutting edge metallic 3D printer is purchased by Helix Corp for $160000. It is expected to last 9…

A: The following information has been provided in the question: Cost of metallic printer =$160000 Life…

Q: Mining company can purchase a drilling machine for GH¢ 50,000. It also has the option to lease the…

A: Data given: Cost price of drilling machine = GH¢ 50,000 Lease rental per year =…

Q: Y Company is considering purchasing a machine for $15,000. The machine will generate a net after-tax…

A: The payback period is one of the capital budgeting technique which use to evaluate the project based…

Q: A delivery car had a first cost of $40,000, an annual operating cost of $15,000, and an estimated…

A: The annual operating cost can be considered as an annuity where the future value will be A =…

Q: A delivery car had a first cost of $24,000, an annual operating cost of $15,000, and an estimated…

Q: (a) Declining balance method, (b) DDB method, (c) sinking fund method g iven interest rate at 12.5…

A: Since this is multi- part question, we are going to solve only first three parts for you. To get the…

Q: York Steel buys a new press brake for $800,000. It is expected to last twenty years and have a…

A: Depreciation is the loss in the value of the asset caused due to its usage, wear and tear.There are…

Q: A delivery car had a first cost of $30,000, an annual operating cost of $12,000, and an estimated…

A: Present Value of periodic payment= P* (1- (1+r)^-n)/r So the annual payment is of the present…

Question

A certain machinery costs P 1,021,778
which will last for 18 years with a salvage
value of P 144,755. Money is worth 20%. If
the owner decides to sell it after using it
for 6 years, what should his price be so
that he will not lose or gain financially in
the transaction?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Information available

VIEW

Step 2: Computation

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Based on the straight-line method, determine the depreciation table for a mini-van that you bought for $35,000. [The expected salvage price after five years is $10,000.] If you sold the car after two years for $20,000, how much gain (or loss) will you make?
Enerlam Company purchased a machine with an estimated useful life of seven years. The machine will generate cash inflows of P9,000 each year over the next seven years. If the machine has no salvage value at the end of seven years, and assuming the company's discount rate is 10%, what is the purchase price of the machine if the net present value of the investment is P17,000?a. P43,812b. P26,812c. P17,000d. P22,195
3. Mr. Garcia sold his machine for P20,000 after using it for 6 years. He bought a new machine worth 75,000 with an expected life of 12 years and a salvage value of 2,000. The operating cost is P5,500 per year. The old machine which he bought for P50,000 when new will be useful for 10 years and a junk value of 1,000 but because of appropriate maintenance, it will be useful for another 5 years, no salvage value, with an annual operating cost of twice the new one. If money is worth 12%, was the engineer justified in selling the old machine? Use the ROR method.
I need the answer as soon as possible
A house and lot can be acquired by a down payment of P500, 000 and a yearly payment of tenP100, 000 at the end of 5 years from the date of purchase. If money is worth 14% compoundedannually, what is the cash price of the property?
Bago Chito purchased an asset for $80,000. Annual operating cash inflows are expected to be $30,000 each year for four years. At the end of the life of asset, Kim will not be able to sell the asset because it will have no salvage value. What Profitability index of cost of capital is 12 percent?
what is the sale price?
A manufacturing company is considering investing in a new machine that costs $50,000. The machine is expected to have a useful life of 5 years. The company estimates that the salvage value of the machine at the end of its useful life will be $10,000. If the company uses straight-line depreciation, what will be the capitalized cost of the machine? A) $7,000 B) $7,500 C) $8,000 D) $8,500
2. The company "Bom investor, Lda" needs to replace a heavy vehicle for which it has two alternatives: rent or purchase. In the case of acquisition, the price of the vehicle is €140,000, depreciated on a straight-line basis at the rate of 25% per year. After 4 years, the company plans to sell the vehicle for €30,000. In return for the acquisition, the rental implies the payment of semi-annual installments in arrears, the first rent of €15,000 and the rest subject to an update of 10% per year. a) Assuming an 8% discount rate and a 21% tax rate, which of the two options is the most favorable - rent or purchase? b) If the company in question expected losses for the next four years, to what extent would that affect decision analysis?
A delivery car had a first cost of $40,000, an annual operating cost of $18,000, and an estimated $3500 salvage value after its 6-year life. Due to an economic slowdown, the car will be retained for only 3 years and must be sold now as a used vehicle. At an interest rate of 11% per year, what must the market value of the used vehicle be in order for its AW value to be the same as the AW if it had been kept for its full life cycle? The market value of the used vehicle is determined to be $
I need the answer as soon as possible
KM Builders Co purchases a new excavator costing £50,000. Its expected useful life is ten years, at which point it is anticipated that the excavator will have a residual value of £18,000. If the straight-line method of depreciation is used, what is the carrying amount of the excavator at the end of 4 years? O A. £32,000 O B. £48,000 OC. £50,000 OD. £37,200