Compare the machines in the following table based on their present value, using an 18% annual interest rate. Data Machine P Machine Q Initial Cost $29000 $37000 Salvage Value (rescue value) $4000 $5000 useful life 3 5 Mainteneance cost  $3000 $3500 General revision after 2 years  $3700 $2000

Q: 2. The following are the relevant data of two alternative machines are shown in the table below.…

A: Capital budgeting is used by the business firms to determines the gains from different capital…

Q: The asset has FC of 10 000 000 and is expected to last in 10 years with the salvage of 800 000.…

A: Depreciation as per Sum of years Depreciation  First years  = Sum of digits * ( Cost of asset -…

Q: The cost of money is 10% per year. Machine P Machine Q Initial cost, $ -35,000 -66,000 Annual cost,…

A: The present worth means the present value of all the future cash flows of the asset. In the present…

Q: View Policies Current Attempt in Progress A project that cost $63000 has a useful life of 5 years…

A:

Q: When comparıng the two machines shown below using Capital Recovery method if MARR is 8%? What is the…

A: capital cost recovery can be calculated by using this equation  Capital recovery cost =First…

Q: is trying to decide between two equipment for a production activity. The following information is…

A:

Q: An electronic balance costs BD9,000 and has an estimated salvage value of BD800 at the end of its 10…

A: Double Declining Balance Method Rate=Straight line Method Rate×2

Q: 7. Find the present worth. Machine A Machine B P 11,000 P 18,000 P 3,100 First Cost Annual P 3,500…

A: According to the time value of money concept, the dollar amount available today is worth more than…

Q: What is the payback period for the project described below? Machine investment $24,999 MARR 10%…

A: We need to find the discounted payback period here. As a first step we need to find the PV of the…

Q: An asset has a first cost of $12,000, an annual operating cost of $3500 and a salvage value of $5000…

A: Given information: Initial cost=$12,000 Annual cost=$3500 Salvage value=$5000 Life=7 years Interest…

Q: A machine has a first cost of P88,155.25 and has an expected salvage value after 10 years…

A: Declining balance method : Under this method , depreciation is charged a fixed percentage on the…

Q: Purchase price Expected useful life Scrap value Depreciation per year Minimum required rate of…

A: The payback period is the period in which the investment is recovered completely. It is calculated…

Q: Machine M Machine N $ 25,000 5 years $3,000 $10,000 $3,500 Initial Cost $25,000 4 years $4,000…

A: Present worth is the present value of all cost and revenue and cash flow from the machine…

Q: PART A.) Decide which of the following machines should be selected (if one of them MUST be selected)…

A: PARTICULAR AMOUNT YEARS PV @8% AMOUNT           FIRST COST (20000) 0 1 (20000) ANNUAL…

Q: Which machine would you recommend given the following information and interest rate is 10%? New Used…

A: The question is based on the concept of Cost Accounting.

Q: Quiz 2: Select the best alternative plan from the table below using the Annual worth analysis (AW).…

A: The Annual Worth analysis is mostly used to compare different alternatives. These cashflows are…

Q: Example A machine with a cost of $200 000 & useful life of 8 years was acquired at the beginning of…

A: The revaluation gain arises if the value recoverable amount of assets exceeds the book value of…

Q: An asset has a first cost of $12,000, an annual operating cost of $3500 and a salvage value of $5000…

A: Given information: Initial cost=$12,000 Annual cost=$3500 Salvage value=$5000 Life=7 years Interest…

Q: You are asked to evaluate two alternatives listed in the table below based on their net present…

A: Net present value is the present value of all costs based on the time value of money and is the…

Q: s and revenues of 2 alternatives for a machine are given below. Determine which alternative is…

A: PRESENT VALUE : The current value of a future quantity of money or stream of cash flows, given a…

Q: A machine has a first cost of P94,547.82 and has an expected salvage value after 10 years…

A: Depreciation is an expense which is charged on the non-current assets in order to record the regular…

Q: Two pumps are being considered for purchase for a serVice life of 10 years. Interest rate is 5%.…

A: Initial Cost = $- 60000   Equivalent PVV for salvage & replacement cost = 10000/(1.05)6 -…

Q: Given the two machines' data Machine A Machine B First Cost P8,000.00 P14,000.00 Salvage value…

A: Equivalent annual cost refers to the annualized cost of owning, operating and maintaining an asset…

Q: Q3: The following table gives the operation cost, maintenance cost and salvage value at the end of…

A: Answer -    Equivalent annual cost (EAC) -  Equivalent annual cost (EAC) is calculated by adding the…

Q: Current Attempt in Progress Sheffield, Inc. is considering purchasing equipment costing $43000 with…

A: Internal rate of return is one of the capital budgeting method widely used by the companies to…

Q: you are given the following information about a machine : Investment costs $ 200,000 Salvage Value $…

A: Capital recovery analysis is done before the purchase of a new machine or an asset. Capital recovery…

Q: You must decide between two different cars. Using an interest rate of 8% per year, the PV of car B…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: A machine has a first cost of P78,862.18 and has an expected salvage value after 10 years…

A: Declining balance Rate= 1/ useful life Declining Balance Rate= (1/10) x100 = 10%   Actual cost=…

Q: In comparing the machines on a present worth basis, the present worth of machine P is closest to:a.…

A: NPV is the net present value of projected cash flow that is calculated by subtracting all the…

Q: You are to create a year-by-year depreciation schedule for an asset that has a cost basis (B) of…

A: The salvage Value is $80,000 The price of the Equipment is $950,000 Project life is 10 years To…

Q: Determine the economic useful life of a piece of equipment whose initial cost is $10,000 and its…

A: EAC or equivalent annual cost is the annual cost of owning and maintaning the asset over its entire…

Q: A computer purchased for $1200 will have a salvage value of $600 after 6 years. Annual maintenance…

A: Correct answer is option (b). $298

Q: Initial Investment is 90,000 for Machine A, 85000 for Machine B, 100000 for Machine C. Estimated…

A: The difference between the present value of cash outflow and the present value of cash inflow is…

Q: The following relates to a proposed equipment purchase: Cost $126,900 Salvage value Estimated useful…

A: ARR (Accounting ROR) is a traditional method which is used to evaluate various projects. It doesn’t…

Q: Calculate Accounting Rate of Return (on average investment) of Machine A (expressed to two decimal…

A: Concept. Accounting rate of return is the rate of return calculated as dividing average net profits…

Q: Q: Two equipment are selected to be bought by the company. If the annual interest rate is 7%, which…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: IL PROBLEM SOLVING 1. An equipment costing P250. 000 has an estimated life of 15 years with a bok…

A: Declining balance method of depreciation It is one of the depreciation method to compute annual…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.