A machine cost $70,200; it had an estimated residual value of $6,000 and an expected life of 300,000 units. What would be the depreciation in year 3 if 60,000 units were produced? (Round to nearest cent.)

A machine cost $70,200; it had an estimated residual value of $6,000 and an expected life of 300,000 units. What would be the depreciation in year 3 if 60,000 units were produced? (Round to nearest cent.)

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: A mechanical engineer is considering two machines for a lathe. Machine A will have an initial cost…

A: Two options need to be compared based on future values. The associated costs and salvage values are…

Q: annual variable production costs associated with the old machine are estimated to be $156,500 per…

A: Differential Analysis :— This analysis shows the comparison between two different alternatives. A…

Q: A pharmaceutical company has some existing semiautomated production equipment that they are…

A: Data given: MARR=12% Tax rate=25% n=5 years Working Note #1 Description Amount ($) Market…

Q: You are evaluating two different silicon wafer milling machines. The Techron I cost $249,000, has a…

A: EAC refers to Equivalent Annual Cost, annual cost incurred for operations or business. To calculate…

Q: Suppose that a company is about to decide on a replacement investment. The old machine on hand was…

A: Initial investment is the amount of cash outflow occur at the start of the project or at year 0.

Q: A project has an initial cost of $34276 and a three-year life. The company uses straight-line…

A: Average accounting rate of return( on basis of initial investment). =( average net income ×100) ÷…

Q: am. 101.

A: First, we need to calculate the net cash flow for each year. The net cash flow is the increase in…

Q: An 8-year project is estimated to cost $528,000 and have no residual value. If the straight-line…

A: Average annual income represents the yearly earnings generated from an investment or project,…

Q: 1. The manager of PPO Inc. plans to manufacture engine blocks for classic cars from the 1960s. The…

A: Capital Budgeting is a process through which a company decides whether they should undertake a…

Q: You are evaluating two different silicon wafer milling machines. The Techron I costs $267,000, has a…

A: Equivalent annual cost refers to the cost incurred for owning, operating, and the maintenance of an…

Q: The initial cost of a project is 1000 monetary units, its useful life is 5 years and the scrap value…

A: Gross income can be defined as the difference between the revenues earned by selling the product and…

Q: A company is considering the acquisition of production equipment which will reduce both labor and…

A: Cash flows:Initial Investment:Cost of equipment: $110,000Annual Cash Flows:Year 1: $30,000Year 2:…

Q: A company is considering purchasing factory equipment that costs $400000 and is estimated to have no…

A: Ratio analysis is a fundamental tool that is used in finance and accounting to evaluate the…

Q: ABC Corp is considering replacing equipment that originally cost $600,000 and has accumulated…

A: sunk cost: formula =originally cost - accumulated depreciation - Amount Recovered on sale

Q: project breakeven.

A: Break even production volume = (Fixed costs + Target profit)/Contribution per unit

Q: determine the average annual income.

A: The average rate of Return: The average rate of return is the percentage of average return incurred…

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: A company is considering replacing an old piece of machinery, which cost $602,100 and has $351,100…

Q: A company is planning to purchase a machine that will cost $70,308, have a six-year life, and will…

A: Payback period is a period calculated in which the initial investment is recovered to the investor.

Q: An 8-year project is estimated to cost $336,000 and have no residual value. If the straight-line…

A: Average rate of return = Average annual income / Average investment where, Average annual income =…

Q: Give me expert answer

A: Project Evaluation and Sensitivity AnalysisWe can evaluate the project's profitability and analyze…

Q: An 8-year project is estimated to cost $528,000 and have no residual value. If the straight-line…

Q: Use the net present value method to determine the following: (If net present value is negative then…

A: NPV is the difference between the present value of cash inflows and the present value of cash…

Q: A company has the following estimates for a new five-year project: Cost of machine = $700,000, price…

A: Operating cash flow is sum of net income and depreciation. Means, depreciation will be added back to…

Q: Consider a project with a life of 9 years with the following information: initial fixed asset…

A: Sensitivity analysis helps to determine how sensitive values are with respect to quantity change.

Q: Give me the right I got answer for DOL and c make sure the is no error in the calculation please…

A: a-1. Break-even point:To calculate the break-even point, we need to find the quantity where total…

Q: An 8-year project is estimated to cost $528,000 and have no residual value. If the straight-line…

A: Average Rate of Return: Average rate of return is a method that measures the average earnings of a…

Q: A company is considering replacing an old piece of machinery, which cost $598,100 and has $350,000…

A: Sunk cost is the cost which is already incurred and cannot be recovered.Sunk cost is an irrelevant…

Q: A machine purchased three years ago for $311,000 has a current book value using straight-line…

A: Machinery costs can be classified into two domains Annual ownership costs Operating Costs Annual…

Q: A new piece of equipment has a first cost of $300,000 with no salvage value. It will generate annual…

A: Cost of equipment = $ 300000 Life = 10 Years Salvage value = 0 Annual depreciation = (Cost - Salvage…

Q: The following data is associated with a proposed replacement project: A machine that originally cost…

A: Machine original cost =25,000 Life of assets =5 year Market value now= 12000 Tax rate =34%

Q: Nikul

A: First, let's calculate the annual cash flows for the project: Sales revenue per year = 94,500…

Q: A pharmaceutical company has some existing semiautomated production equipment that they are…

A: The process via which any project's profitability is analyzed is regarded as capital budgeting. It…

Q: 25) The Comil Corporation recently purchased a new machine for its factory operations at a cost of…

A: IRR is also known as Net Present Value. It is a capital budgeting technique which helps in decision…

Q: If the machine is purchased, annual revenues are expected to be $100,000 and annual operating…

A: Pay back period is number of years required to recover initial investment of machine.

Q: Company Q is considering a project which needs an equipment. The cost of the equipment is $350,000.…

A: Cash flows are the cash generated from the operation of the business organisation. In other words,…

Q: A firm is considering two different methods of solving a production problem. Both methods are…

A: The calculation is:

Q: K A Celty Airline jet costs $28,000,000 and is expected to fly 200,000,000 miles during its 12-year…

A: Cost = $28,000,000 Salvage value = $0 Life = 200,000,000 miles Actual miles driven in Year 1 =…

Q: Lewis Enterprises is considering a project with an internal rate of return of 12%, an annual rate of…

A: Average investment = (Initial investment + Salvage value)/2 Annual rate of return = Annual net…

Q: a. A new operating system for an existing machine is expected to cost $837,000 and have a useful…

A: Required A:Incremental after-tax income = $245,000Salvage value = $105,000Number of years = 6 years…

Q: 4 Excelsior Industries is evaluating the purchase of a new manufacturing machine for its product…

A: Calculate the Net Present Value (NPV) of the manufacturing machine for Excelsior Industries:…

Q: An 8-year project is estimated to cost $384,000 and have no residual value. If the straight-line…

A: Average investment amount is the average of initial investment and ending investment of the…

Q: There is old machinery with a value of $95,565, with an expected life of 20 years. There is a sale…

A: NPV, IRR and payback period are the capital budgeting tools to decide on whether the capital project…

Question

100%

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Final Answer

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

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

A chemical mixer was purchased 8 years ago for $100,000. If retained, it will require an investment of $50,000 to upgrade it; if upgraded, it will cost $35,000/year to operate and maintain (O&M) and will have a negligible salvage value after 5 years. A new mixer can be purchased for $120,000; it will have an annual O&M cost of $15,000 and a salvage value of $40,000 after 5 years. Alternatively, a mixer can be leased with 5 beginning-of-year lease payments of $20,000; O&M costs will be $18,000/year. If the mixer is replaced, the old mixer can be sold on the used equipment market for $15,000. Using an insider’s approach, what are (a) the EUAC of keeping the current mixer, (b) the EUAC of replacing with a new mixer, and (c) the EUAC of replacing with a leased mixer? The MARR is 10%.
7) costs for the current machine. The current machine is based on older technology and has negligible market value. The purchase price of the new equipment is $500,000 and it is expected to last for 10 years. Its terminal salvage value is $50,000. Operating and maintenance (O&M) costs are estimated to be $20,000 for the first year. Thereafter, these O&M costs are expected to increase by $2,000 each year over the previous year's costs. MARR is 10% per year compounded annually. a) b) purchase this new equipment? Explain. EmKay, Inc. has decided to purchase new equipment because of the increasing maintenance Compute the present worth for this new equipment purchase. If the annual O&M costs for the current machine are $75,000, would you support the decision to
Having an issue with this problem.
The Carico Company recently purchased a new machine for its factory operations at a cost of $921,250. The investment is expected to generate $250,000 in annual cash flows for a period of six years. The required rate of return is 14%. The old machine has a remaining life of six years. The new machine is expected to have zero value at the end of the six-year period. The disposal value of the old machine at the time of replacement is zero. Required: What is the internal rate of return? a. 18% b. 16% c. 15% d. 17%
A machine costs $100,000 and generates $25,000 of pre-tax operating income per year. The tax rate is 40%. The machine is in a CCA class with a 20% rate. The cost of capital is 12%. The machine is expected to last 10 years and will have no salvage value. Other assets will remain in the asset class. What is the NPV of the machine?
A new machine was bought for $8,500 with a life of eight years and no salvage value. Its annual operating costs were as follows: $7,000, $7,210, 7426.30, ..., $8,609.12 If the MARR=12%, what was the annual equivalent cost of the machine? Choose the correct answer below. A. The annual equivalent cost of the machine was $16,656. B. The annual equivalent cost of the machine was $6,622. C. The annual equivalent cost of the machine was $1,711. D. The annual equivalent cost of the machine was $7,646. E. The annual equivalent cost of the machine was $9,357.
A machine whose value is ($36,200), its saving value is $4,300, and its life span is ten years. Calculate the depreciation load, the recorded value, and the unhedged capital returns in each year of the life of this machine, knowing that the expected profit from it is (69%) annually
Which values am I supposed to use for the depreciation?
A company will invest in a machine worth 50000$ to produce a new product. The economic life of the machine is 4 years and its scrap value is 1000$. It will be produced on this machine The annual sales revenue of the product is expected to be 25000 $. Annual operation of the machine Expenditure is expected to be 10000 $. A) The amount of depreciation that will be allocated each year for the equipment to be purchased is Find it with the proportional depreciation method. B) The income tax is 40% and the investment will be made with the company’s equity. Assuming, find the net cash flows that will be generated by purchasing the machine.
if a company is considering buying a system that costs 450,000 with an estimated 10-year life and a salvage value of 70,000, the estimated operating results with the new machine are, incremental revenue = 180,000, incremental expenses = 123,000 which is made up by, expenses other than depreciation = 85,000, depreciation (straight-line basis) = 38,000, and incremental income = 57,000, and all revenue and expenses other than depreciation use cash, how do I find the annual net cash flow, time of the payback period, return on investment percentage, and the Net present value, discounted at an annual rate of 6% (present value of $1 due in 10 years, discounted at 6%, is 0.558; present value of $1 received annually for 10 years, discounted at 6%, is 7.360)?
Daily Enterprises is purchasing a $9.6 million machine. It will cost $46,000 to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. If Daily uses straight-line depreciation, what are the depreciation expenses associated with this machine? The yearly depreciation expenses are $___________ (Round to the nearest dollar.)
Mitsui Electronics, Limited, is considering buying a labor-saving pierce of equipment and provided the following data: Purchase cost of the equipment $ 484,500 Annual cost savings that will be provided by the equipment $ 85,000 Life of the equipment 12 years Compute the simple rate of return on the equipment. Use straight-line depreciation based on the equipment’s useful life.