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Consider a piece of equipment that has the following cost and benefit estimates, and the interest rate is 15% per year: What is the modified B/C ratio of this equipment?
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- Engineering Economy, Chapter 16: Depreciation Methods Assume that your Harley has a first cost of $25,000 and an estimated $4000 Salvage value after 12 years. Calculate it's double declining balance (DDB) depreciation and book values for 1. Year 1 only 2. Year 4 only 3. Calculate the salvage value at the end of 12 years for the DDB modelUpdated class practice problem to include state tax and proper consideration of asset disposal (1/2 depreciation and need BV to determine recapture or loss) GIVENS: Initial Cost $150,000 Annual net saving $50,000 state Useful life 6 years federal 6.50% 21.0% Salvage value $30,000 tax rate BTCF-D TI tax rate BTCF-Income Tax Year Taxable BTCF MACRS Depreciation Income Income Tax ATCF 0 ($150,000) ($150,000) 1 50,000 20% ($30,000) $20,000 $4,618 45,382 2 50,000 32% ($48,000) $2,000 $462 49,538 3 50,000 19.20% ($28,800) $21,200 $4,895 45,105 4 50,000 11.52% ($17,280) $32,720 $7,555 42,445 5 50,000 11.52% ($17,280) $32,720 $7,555 42,445 6 50,000 2.88% ($4,320) $45,680 $10,548 63,523 indudes 6 and disposal disposal 30,000 BV= $4,320 $25,680 $5,930 recapture ROR Question 1 What is the ATCF ROR when state taxes and asset disposal are properly considered?Updated class practice problem to include state tax and proper consideration of asset disposal (1/2 depreciation and need BV to determine recapture or loss) GIVENS: Initial Cost $150,000 Annual net saving $50,000 state Useful life Salvage value $30,000 6 years federal 6.50% 21.0% tax rate -BTCF-D TI tax rate BTCF-Income Tax Year Taxable Income BTCF MACRS Depreciation ATCF Income Tax 0 ($150,000) ($150,000) 1 50,000 20% ($30,000) $20,000 $4,618 45,382 2 50,000 32% ($48,000) $2,000 $462 49,538 3456 50,000 19.20% ($28,800) $21,200 $4,895 45,105 4 50,000 11.52% ($17,280) $32,720 $7,555 42,445 50,000 11.52% ($17,280) $32,720 $7,555 42,445 50,000 2.88% disposal 30,000 BV= ($4,320) $4,320 $45,680 $25,680 $5,930 $10,548 63,523 includes 6 and disposal recapture ROR Question 1 What is the ATCF ROR when state taxes and asset disposal are properly considered?
- What will be the cost of an asset, if its salvage value is 300 after 5 years and annual depreciation charge is 500, use the Straight Line Depreciation rule. Select one: a. 2800$ b. 2750$ c. 2840$More Info Year 1 2 3 4 5 6 GDS Recovery Rates (rk) 5-year Property Class 0.2000 0.3200 0.1920 0.1152 0.1152 0.0576 - X6 Use the units of production method to find depreciation for the following: Cost Salvage Value Estimated Life Usage $20000 $2000 40,000 h 12,480 h $70,000 $7000 100,000 units 70,500 units $18500 2300 75,000 mi 55,600 mi
- heavy equipment for a certain project and the details are as follows: ITEM: MACHINE A: MACHINE B: First Cost P2,000,000.00 P3,000,000.00 Annual operating P325,000.00 P250,000.00 cost Annual labor cost Insurance and taxes Payroll taxes Estimated life P500,000.00 P320,000.00 4% 10% 12 yrs. 4% 10% 12 yrs. If the minimum ROR is 25%, What is the annual cost of Machine A & B using present worth method?TOPIC: SINKING FUND METHOD Question: An equipment cost 60,000 today and its salvage value is 20,000 after 6 years. Calculate its total depreciation at year 3 with 5% interest rate. Use sinking fund method. P.S Use manual solving only Thank you!A numerically controlled milling machine was purchased for $95,000. The estimated salvage value was $15,000 after 15 years. What is the machine’s book value after 5 years of depreciation? If the machine is sold for $20,000 early in Year 7, how much gain on sale or recaptured depreciation is there? Assume(a) Straight-line depreciation(b) 150% declining balance depreciation(c) 80% bonus depreciation with the balance using 7-year MACRS depreciation(d) 7-year MACRS depreciation
- Ederly Quarry sells a wide variety of cut limestone for residential and commercial building construction. A recent quarry expansion cost $2.3 million and added an estimated 90,000 tons of reserves. Year Volume, 1000 Tons Price, $ per Ton 1 10 75 2 9 70 3 15 70 4 10 76 5 18 85 Estimate the cost depletion allowance for the next 5 years, using the projections made by the owner, John Ederly. The cost depletion allowance for the next 5 years is estimated to be $Subject: Engineerings Economics Topics:1. Declining Balance Method (DBM) Please help me to solve this in step by step manner. Make sure to analyze the question well.BOX your final answer Question: A machine cost P160,000 and is estimated to have a life of 6 years. If the rate of depreciation is 25%, find the salvage value using the declining balance method.Please use the following sources below: Blank, L. & Tarquin, A. (2018). EngineeringEconomy (8th Ed.). McGraw-Hill Education.Sullivan, W., Wicks, E. & Koelling, C. P. (2014).Engineering Economy (16th Ed.). PearsonEducation South Asia Pte Ltd.Sta. Maria, H. (2000). Engineering Economy(3rd Ed.). National Book Store.Arreola, M. (1993). Engineering Economy(3rd Ed.). Ken Incorporated.The following data shows the different sizes of pipes which a company wishes to use as a replacement for the old pipesystem that they are usingDiameter 100mm Cost of Pipe-P1800000 Annual Maintenance Cost-P88000 Operating cost/hour=P480Diameter 150mm Cost of Pipe-Pl 120000 Annual Maintenance Cost-Pl 36000 Operating cost/hour=P500Diameter 250mm Cost of Pipe-Pl 000000 Annual Maintenance Cost-P60000 Operating cost/hour=P620Total number of operating hours per year 500Replacement is done every 1 0 yearsMoney is worth 10% annually.Compute the equivalent annual cost of the 100mm pipe