A firm is trying to choose between two machines to manufacture a new line of office furniture. The financial data for each machine have been compiled as follows: Machine A Machine B Initial investment required $20,000 $12,000 Service life б уears 3 years Salvage value $5,000 $3,000 Annual operating expenses $4,000 $2,500 Annual operating revenue $15,000 $12,500 Depreciation method 5-year MACRS 5-year MACRS The firm's marginal tax rate is 40% and uses a 15% discount rate to value the projects. Also, assume that the required service period is indefinite.
Q: Mix ‘Em Up engages in research to develop cures for famous diseases. Costs incurred during…
A: Since you have asked two different questions under a single question. As per protocol we are…
Q: a) Darling Paper Container, Inc. purchased several machines at a total cost of $300,000. The…
A:
Q: A machine costs Php 2,000,000. It has a salvage value of Php 500,000 at the end of its economic…
A: total depreciation of the machine. BV = FC - Total depreciation 800000 = 2000000 - Total…
Q: Jay Hawk, maintenance supervisor for Boston InsuranceCo., has purchased a riding lawnmower and…
A: Depreciation expense: Depreciation expense is a non-cash expense, which is recorded on the income…
Q: A small chemical manufacture company needs to replace an old high-shear mixer. Two different models…
A: Annual equivalent cost is that cost which is incurred on an annual basis for some project or some…
Q: A pharmacy is planning to purchase a second-hand scanning microscope at a cost of BD10,500, and its…
A: Accounting's goals include keeping a systematic record of all financial transactions in a book of…
Q: Doja Products placed a new machine into production 3 years ago. It had an installed cost of…
A: Book value calculated after deducting the depreciation value over particular period of time.…
Q: A granary has two options for a conveyor used in the manufacture of grainfor transporting, filling,…
A: Present value is used to calculate the existing value of future cash flows for decision making.
Q: Warren Company plans to open a new repair service center for one of its electronic products. The…
A: Income Statement is the part of financial statement which shows the net profit or loss earned by the…
Q: Having been affected by Typhoon Odette, a man bought a generator unit to power his building used for…
A: Formulas :- Original cost = cost of unit + Installation cost + Shipping cost Rate of depreciation…
Q: A company owner has asked his accountant to research the photocopier equipment available from…
A: Incremental cost: Incremental cost is the analysis of the costs in different avenues, which could be…
Q: The initial cost of a paint sand mill, including its installation is P 800,000. The depreciable…
A: Formula: Straight line method deprecation = ( Asset cost - Salvage value ) / Useful life
Q: A Company makes plastic dog carriers. The manufacturing process is highly automated and the machine…
A: The expenses that are incurred during the production process or manufacturing process of…
Q: International Fabric, Inc. must decide which type of fabric cutting machines it will use - Machine A…
A: we will find the equated annual cost of both machinery A and B and will select the machinery which…
Q: Heathy Food Distribution Center Inc. purchased Special handling equipment for beverage manufacture…
A: Given, Cost of the equipment=$10,500,000Salvage Value=$500,000Projected useful life=5 years
Q: A company bought a new laptop for Engr. Reyes – their new employee. The laptop was advertised to…
A: The question is based on the concept of Depreciation Accounting. As per the Bartleby guidelines we…
Q: A high-precision programmable router for shaping furniture components is purchased by Henredon for…
A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to its…
Q: Butler Buildings purchased semi-automated assembly and riveting robotics equipment for constructing…
A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…
Q: A firm is trying to choose between two machines to manufacture a new line of office furniture. The…
A: IRR is the internal rate of return. It is the rate of return at which Net present value is equal to…
Q: Legend Service Center just purchased an automobile hoist for $33,900. The hoist has an 8-year life…
A: The question is based on the concept of Financial Accounting.
Q: ranklin Printing Company is considering replacing a machine that has been used in its factory for 4…
A: Yes , Correct In differential analysis , relevant cost is considered where cash inflow and outflow…
Q: RT Manufacturing is deciding whether to keep or replace an old machine. It obtains the following…
A:
Q: Miller optometry is considering the purchase of a new lens grinder to replace a machine that was…
A: Machinery is the long-term asset on which the depreciation would be charged over a period of time.
Q: A building supplies distributor purchased a gasoline-powered forklift truck 4 years ago for $8,000.…
A: The present value of the cash flow of the old machine:
Q: Saxon Products, Incorporated, is investigating the purchase of a robot for use on the company’s…
A: Note: Hi! Thank you for the question, As per the honor code, we are allowed to answer three…
Q: Apex Fitness Club uses straight-line depreciation for a machine costing $23,860, with an estimated…
A: Calculation of machine’s book value:Results of formulas used in excel sheet is as follows:
Q: Sellem, Inc. is disposing of office furniture it has had for 2 ½ years. The cost of the furniture…
A: Refer step1 & step2 for complete understanding
Q: Eight years ago, Ohio Valley Trucking purchased a large-capacity dump truck for $110,000 to provide…
A: Purchase price of truck is $110,000 Time period 8 years Per year maintainance cost is $12,200 Resale…
Q: A company purchased a van at a cost of $42,000 and expects it can be sold for $6,000 after 120,000…
A: Given that, cost of the van = $42000 Residual value of the van = $6000 Service time of the van =…
Q: Nick's Novelties, Inc. is considering the purchase of electronic pinball machines to place in game…
A: The present value is the value of the sum received at time 0 or the current period. It is the value…
Q: The York City Hospital has just acquired new equipment. The equipment cost $4,250,000, and the new…
A: Depreciation in accounting means decrease in the value of assets over useful life. it is a process…
Q: "An industrial engineer proposed the purchase of an RFID Ford Asset Tracking System for the…
A: IRR is the minimum return required by an investor from any investment. For the acceptance of any…
Q: You have just bought a new pusher dozer for your equipment fleet. Its cost is $100,000. It has…
A: Depreciation is a decrease in the value of an asset due to various reasons like wear and tear,…
Q: Legend Service Center just purchased an automobile hoist for $36,800. The hoist has an 8-year life…
A: Introduction:- The payback period is calculated by dividing the amount of the investment by the…
Q: R Company made the following expenditures Initial design fee for proposed extension of office…
A: Assets are capitalized by all cost that incurred on purchasing and increasing the capability of…
Q: akmont Company has an opportunity to manufacture and sell a new product for a four-year period. The…
A: We will have to compute the net present value here. If the NPV is positive then the project will be…
Q: The original capacity of the equipment is 10,000 units per year. After paying $2,500 to replace an…
A: Capitalization of expenses: Capitalization of assets means to record expenses incurred for assets in…
Q: A company owner has asked his accountant to research the photocopier equipment available from…
A: Incremental cost: Incremental cost is the analysis of the costs in different avenues, which could be…
Q: Saxon Products, Inc., is investigating the purchase of a robot for use on the company’s assembly…
A: Given:
Q: An engineering firm spent $160,000 to purchase and install new computer equipment in its office. The…
A: Depreciation is a non-cash expense that is incurred due to the continuous use of the fixed assets.…
Q: Bison Gear and Engineering of St Charles, Illinois, makes sensorless and brushless dc gear motors…
A: Depreciation is charged to an asset whose value declines gradually over a period of time due to its…
Q: A machine costing $450,000 with a four-year life and an estimated $30,000 salvage value is installed…
A: Under Straight line method, same amount of depreciation expense is charged in each year of the life…
Q: Miller Optometry is considering the purchase of a new lens grinder to replace a machine that was…
A: Operating cost for New machine:
Q: RLC Manufacturing is planning to purchase a cutting equipment. Information are as follows:…
A: In investment decision, those assets having lowest future cash outflow or high inflows should be…
Q: At the beginning of the year, Canary.com bought a shed, a machine, and a trailer. The shed initially…
A: The cost and expenses incurred on the acquisition of assets are capitalized when the expense is…
Q: 1. Equipment for immersion cooling of electronic components has an installed value of $175,000 with…
A: As per the honor code, We are allowed to answer the first question in case of multiple questions are…
Attached is question diagram, USE EXCEL AS ITS REQUIRED
Question 9. What is the net present worth of machine B after tax over 3 years? Pick the correct answer.
-
$6,394
-
$6,233
-
$5,562
-
$7,070
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 1 images
- RLC Manufacturing is planning to purchase a cutting equipment. Information are as follows: Equipment 1 Equipment 2 First Cost P 12,000 P 18,000 Salvage Value P 600 P 2,000 Annual Operation P 3,200 P 2,500 Annual Maintenance P 1,200 P 1,000 Taxes & Insurance 3% 3% Life, years 10 15 Money is worth at least 16%. Which equipment should be selected? Use: Annual Cost MethodRLC Manufacturing is planning to purchase a cutting equipment. Information are as follows: Equipment 1 Equipment 2 First Cost P 12,000 P 18,000 Salvage Value P 600 P 2,000 Annual Operation P 3,200 P 2,500 Annual Maintenance P 1,200 P 1,000 Taxes & Insurance 3% 3% Life, years 10 15 Money is worth at least 16%. Which equipment should be selected? Use: a. Rate of Return Method Rate of Return Method Annual Cost Method NOTE: Show cashflow diagram.A company is planned to install new automated plastic molding press. Four different presses are available as follows: Press 1 Press 2 Press 3 Press 4 Capital Investment $24,000 $30,000 $49,000 $52,000 Useful Life (year) 5 5 5 5 Annual Expenses Power ($) Labor ($) Maintenance ($) Tax & Insurance ($) 2,720 26,400 1,600 480 2,720 24,000 1,800 608 4,800 16,800 2,600 992 4,800 14,800 2,000 1,040 Assume that each press has the same output capacity (120,000 units per year) and all units can be sold (the selling price is $0.375 per unit. Additional capital invested is expected to earn at least 10%. Which press should be chosen?
- A company is going to buy a new equipment for manufacturing itsproduct. Four different equipment’s are available; costs, operating and otherexpenses are as follows:Equipment A B C DFirst Cost Php 24,000 Php 30,000 Php 49,600 Php 52,000Power per year Php 1300 Php 1360 Php 2400 Php 2520Labor per year Php 10,600 Php 9320 Php 4200 Php 2700Maintenance/year Php 2800 Php 1900 Php1300 Php 700Taxes & Insurance 2% 2% 2% 2%Life; years 5 5 5 5 Money is worth 10% before taxes to the company. Which equipment shouldbe purchased ? Choose which method is applicable.In order to carry a new investment project, company A has to purchase a machine for OMR 400,000. Company A staff have enough capacity to carry out the production, no one new will need to be hired, they are currently paid OMR 20,000. Calculate the relevant cost? a. OMR 20,000 Ob. OMR 380,000 O c. OMR 400,000 d. OMR 420,000Choose from the two equipment which is more economical. Machine A Machine B First cost Php 8000 Php 14,000 Salvage value Php 2000 Annual operation Php 3000 Php 2400 Annual maintenance Php 1200 Php 1000 Taxes & insurance 3% 3%
- A firm is trying to decide which of two machines to purchase as described in in the table below. Using the interest rate 9% or 0.09, use present worth analysis to determine which machine, if either, should be purchased. Show all your work. Machine: A - B First Cost: $800 - $600 Annual Net Benefit: $130 - $230 Salvage Value: $40 - $20 Usefil Life (years): 9 - 3A company is going to buy a new machine for manufacturing its product. Four different machines are available. A B C D First cost Php 24,000 Php 30,000 Php 49,600 Php 52,000 Power per year Php 1,300 Php 1,360 Php 2,400 Php 2,020 Labor per year Php 11,600 Php 9,320 Php 4,200 Php 2,000 Maintenance per Php 2,800 Php 1,900 Php 1,300 Php 700 year Taxes and insurance 3% 3% 3% 3% Life, years Money is worth 17% before taxes to the company. Using annual cost method, what is the total annual cost of machine A?need to solve the question in handwriting Q4:.: A company is planned to install new automated plastic molding press. Four different presses are available as follows: Press 1 Press 2 Press 3 Press 4 Capital Investment $24,000 $30,000 $49,000 $52,000 Useful Life (year) 5 5 5 5 Annual Expenses Power (S) Labor ($) Maintenance ($) Tax & Insurance ($) 2,720 2,720 26,400 24,000 1,600 480 1,800 608 4,800 16,800 2,600 992 4,800 14.800 2,000 1,040 Assume that each press has the same output capacity (120,000 units per year) and all units can be sold (the selling price is $0.375 per unit. Additional capital invested is expected to earn at least 10%. Which press should be chosen?
- Quary Company is considering an investment in machinery with the following information. Initial investment Useful life Salvage value Expected sales per year (a) Compute the investment's annual income and annual net cash flow. (b) Compute the investment's payback period. Required A Required B Complete this question by entering your answers in the tabs below. $ 335,000 9 years $ 20,000 16,750 units Annual Amounts Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Selling price per unit Compute the investment's annual income and annual net cash flow. Expenses Income Net cash flow $ 75,375 35,000 8,375 $ 1010. Batangas State University is purchasing a new queuing system for its service improvement in Registrar’s office. The table that follows list the relevant cost itemsfor this purchase. The operating cost for the new system is expected to be five (5years). The salvage value for depreciation purposes is equal to 25% of the hardwarecost. Cost item CostHardware $160,000Training $15,000Installation $15,000 a. What is the book value of the device at the end of three years if the straight linemethod (SLM) is used?b. Supposed that after depreciating the device for two (2) years with the SLM,the firm decides to switch to the double-declining balance depreciationmethod for the remainder of the device’s useful life. What is the device’s bookvalue at the end of four years?A piece of production equipment is to be replaced immediately because it no longer meets quality requirements for the end product. The two best alternatives are a used piece of equipment (E1) and a new automated model (E2). The economic estimates for Alt E1 Alt E2 Capital Investment PhP 14,000 PhP 65,000 Aппual Expenses 14,000 9,000 each are shown in the accompanying table. Useful Life (years) 5 20 Market Value (at the end of useful life) 8,000 13,000 The MARR is 15% per year. Which alternative is preferred, based on the (a) coterminated assumption with a five-year study period and an imputed market value for Alternative b? Use FW. ANSWER: FW (E1) = PhP Blank 1 FW (E2) = PhP Blank 2 The best alternative is EBlank 3