How much is the initial cost of the new machine?
Q: ABC Co purchased an equipment from Hongkong for P100,000. Additional cost included the following:…
A: The costs incurred on non cash assets till they are ready to use are to be capitalized by the…
Q: B2B Co. is considering the purchase of equipment that would allow the company to add a new product…
A: SOLUTION- NET PRESENT VALUE- IT IS THE DIFFERENCE BETWEEN PRESENT VALUE OF CASH INFLOWS AND PRESENT…
Q: E24-6 BSU Inc. wants to purchase a new machine for $29,300, excluding $1,500 of instal- lation…
A: Payback period is the amount of time to recover the initial investment. It can be calculated Payback…
Q: Adams Company paid $92.000 to purchase a machine on January 1, Year 1. During Year 3, a…
A: An avoidable cost is one that will not be spent if a specific activity is not carried out. Unlike…
Q: To package its products, a company purchased an automatic packaging machine for P600,000. Freight,…
A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…
Q: Antonio, Inc., has invested in new production equipment at a cost of $24,000. The equipment has an…
A: The payback period (PBP) is the amount of time that is expected to recover the investment costs…
Q: A clothing plant consumed 600,000 kwh of electrie energy annually and pays an average of P2.05 per…
A: Present value of annuity Annuity is a series of equal payments at equal interval over a specified…
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: The company sets a new to the company revenue of 20,000,000.00 pesos for its soon to launched corned…
A: Given: cannibalization of 45% revenue of new product = 20,000,000.00 pesos Cannibalization Rate =…
Q: processing plant consumed 600,000 kwh of electric energy annually and pays an average of ₱2.00 per…
A: Annual cost for electriic energy = 6,00,000KWh (P2.00/kWh) = P1,200,000 Annual cost for power plant:…
Q: The Kimchi Company imported a new machine at a peso equivalent of P1,320,000. The company has to pay…
A: Initial cost of new machine = Purchase cost + Import duty + Purchase taxes + Transportation cost +…
Q: A firm is planning to replace an old machine that was acquired several years ago at a cost of…
A: Here in this question, we are required to calculate net cost of investment. For calculating that…
Q: The MGC Company has a contract with a hauler to transport its naptha requirements of 3,600,000 liter…
A: `Rate of return shows the return earned by the company on the investment made by them.
Q: What is the total carrying value of the manufacturing plant (machine, and equipment) as of December…
A: All the costs incurred to make the asset ready for its intended use shall be capitalized to the…
Q: KADS, Inc. has spent $390,000 on research to develop a new computer game. The firm is planning to…
A: The initial investment cost of machine is $190,000. The installation cost is $49,000. The cash flow…
Q: Canrad Company manufactures Tool A used in its manufacturing cycle at a cost of P36 per unit that…
A: Occurring of circumstances which require key decision making frequently occur in businesses. One…
Q: During the current year, Adrienne Company purchased a second hand machine at a price of P5,000,000.…
A: Capitalized cost is the one which is computed over a certain period of time, starting from the…
Q: Extra Corporation is installing a new machine at its production facility. It has incurred these…
A: Cost of property , plant and equipment includes purchase price ( less trade discount ) , taxes ( if…
Q: On 1-March-2010, Alpha Pharmaceuticals Ltd. purchased 10 machines for manufacturing tablets. The…
A: Depreciation is a tax-deductible, non-cash expense which is charged on the fixed tangible asset…
Q: Jojo Ltd manufactures products, Abbisha and Babbisha, from raw material, Zaro. The raw material is…
A: Answer- Working Note : Particulars Working Amount Raw Material for 2020 `=20000*80% 16000…
Q: The MGC Company has a contract with a hauler to transport its Naphtha requirements of 3,600,000…
A: The continual expenses incurred by the routine day-to-day operations of a firm are referred to as…
Q: Bella Pool Company sells prefabricated pools that cost P100,000 to customers for P180,000. The sales…
A:
Q: A firm is planning to replace an old machine that was acquired several years ago at a cost of…
A: Calculation of total cost of new machine purchase price = $800,000 Add :-Trade in…
Q: /The total price for the purchase of a fact nake concrete blocks is (10)million I ars. The price of…
A: Introduction Total revenue is the product of the price and quantity of goods sold in a firm. Total…
Q: The Kimchi Company imported a new machine at a peso equivalent of P1,320,000. The company has to pay…
A: The following information given: Purchase price = P1,320,000 Import duties (cost of importing) =…
Q: B2B Co. is considering the purchase of equipment that would allow the company to add a new product…
A: Calculation Net present value:
Q: An energy production company has the following information regarding the acquisition of new…
A:
Q: The RV company, engaged in the fabrication of automobile engine part with production capacity of…
A: Capacity = 700000 The production (Q) = 65100×700000=455,000 Annual income = P450,000 Fixed costs =…
Q: ABC Co purchased an equipment from Hongkong for P100,000. Additional cost included the following:…
A: Lets understand the basics. As per IAS 16 "PPE", PPE initially needs to capitalized on books of…
Q: capitalized as cost of the machine
A: The cost of a fixed asset includes the sum of amounts of money spent in bringing the asset into…
Q: B2B Co. is considering the purchase of equipment that would allow the company to add a new product…
A: Net present value is the difference between the present value of cash flow and initial investment…
Q: Grant Company has acquired a machine and equipment on January 2, 2018. The cost of the machine…
A: Calculation of Depreciation 1. MACHINE Depreciation on Machinery = cost-residual value / useful…
Q: A processing plant consumed 650,000 kW of electric energy annually and pays an average of P6.50 per…
A: Rate of rerun is the net gain or loss incurred in the investment, expressed as percentage to the…
Q: B2B Co. is considering the purchase of equipment that would allow the company to add a new product…
A: The question is based on the concept of Financial Management. The project is said to be viable if…
Q: A machine costs $17,652 and is expected to have a scrap value of $2,919 whenever it is retired.…
A: Equivalent annual cost refers to the cost of acquiring, operating, and maintaining the asset over…
Q: The ABC Company imported an equipment at a peso equivalent to P330,000. The company has to pay…
A: Solution: Initial cost of the Machine = Imported purchase price + Import duties + Non refundable…
Q: Whole Grain Bakery purchases an industrial bread machine for $30,000. In addition to the purchase…
A: Equipment refers to machinery that is manufacturing unit and the initial cost of machinery will…
Q: Abbott placed into service a flexible manufacturing cell costing $850,000 early this year for…
A: Taxable income is the amount on which the tax is to be paid. It is the amount after considering all…
Q: The Platinum Touch Mining Company paid $4,000,000 for a parcel of land, including the mining rights.…
A: Land cost =4000000 Amount for preparation =564700 Residual value =800000 Total net value…
Q: Bonus Corporation is installing a new machine at its production facility. It has incurred these…
A: Net Purchase price = Purchase price - input tax = 2800000-300000 = P2,500000
Q: The year-end operating and maintenance costs of a certain machine are estimated to be P12,000 the…
A: Equivalent annual cost (EAC) is the annual cost of owning and maintaining an asset determined by…
Q: A company is considering replacing an old piece of machinery, which cost $597,100 and has $352,000…
A: Variable productions costs = annual variable production costs x no. of years old machine = $155,100…
Q: The ML Company imported a new machine at a peso equivalent of $1,320,000. The company has to pay…
A: The cost of the machine is the cost associated with that machine to make it fit for the use of the…
Q: Niasha Stores recently imported an item of plant from Grenadines Plants Ltd. The following…
A: As per IAS 16, the cost of an item of property, plant and equipment includes: (a) its purchase…
Q: An industrial organization studying the relative desirability of two diesel engines proposed for…
A: Relative Desirability : Based on the quantity of investment in one asset in an organization, how…
The Kimchi Company imported a new machine at a peso equivalent of P1,320,000. The company has to pay additional cost of importing the asset such as P40,000 import duties and P60,000 non-refundable purchase taxes. Costs of transporting the asset was P20,000 and cost of preparing the asset for its intended use include P12,000 installation and P8,000 testing and trial run costs. How much is the initial cost of the new machine?Required to answer. Single choice.
Step by step
Solved in 3 steps
- The ABC Company imported an equipment at a peso equivalent to P330,000. The company has to pay additional cost of importing the asset such as P10,000 import duties and P15,000 non-refundable purchase taxes. Costs of bringing and preparing the asset for its intended use include P2,000 transportation cost, P4,000 installation and testing and trial run costs. How much is the initial cost of the new machine?The Kimchi Company imported a new machine at a peso equivalent of P1,320,000. The company has to pay additional cost of importing the asset such as P40,000 import duties and P60,000 non-refundable purchase taxes. Costs of transporting the asset was P20,000 and cost of preparing the asset for its intended use include P12,000 installation and P8,000 testing and trial run costs. How much is the initial cost of the new machine?A firm is planning to purchase a new machine costing ₱2,800,000 with freight and installation costs amounting to 135,000. The old unit to be traded-in will be given a trade-in allowance of ₱260,000. Other assets that are to be retired as a result of the acquisition of the new machine can be salvaged and sold for ₱52,000. The loss on the retirement of these assets is ₱50,000 will reduce taxes by ₱20,000 which is based on a tax rate of 40%. If the new machine is not purchased, extensive repairs on the old machine will have to be made at an estimated cost of ₱400,000. This cost can be avoided by purchasing the new machine. Additional gross working capital of ₱350,000 will be needed to support operations planned with the new machine. The net cost of investment would be? a. ₱ 2,935,000 b. ₱ 2,463,000 c. ₱ 2,623,000 d. ₱ 2,923,000 e. ₱ 2,973,000
- A firm is planning to purchase a new machine costing ₱2,800,000 with freight and installation costs amounting to 135,000. The old unit to be traded-in will be given a trade-in allowance of ₱260,000. Other assets that are to be retired as a result of the acquisition of the new machine can be salvaged and sold for ₱52,000. The loss on the retirement of these assets is ₱50,000 will reduce taxes by ₱20,000 which is based on a tax rate of 40%. If the new machine is not purchased, extensive repairs on the old machine will have to be made at an estimated cost of ₱400,000. This cost can be avoided by purchasing the new machine. Additional gross working capital of ₱350,000 will be needed to support operations planned with the new machine. The net cost of investment would be?A processing plant consumed 650,000 kW of electric energy annually and pays an average of P6.50 per kWh. Astudy is being made to generate its own power to supply the plant the energy required, and that the power plant installed would cost P6,500,000. Annual operation and maintenance, P1,230,000. Other expenses P305,000 per year. Life of power plant is 16 years; salvage value at the end of life is P550,000; annual taxes and insurances, 6.5% of first cost; and rate of interest is 20%. Using the sinking fund method for depreciation, determine if the power plant is justifiable.Each year, the company needs atleast 10,000 parts. A supplier has offered to sell a component to the company for ₱54 each. However, if the company choose to outsource the component of the product, it can use the facilities to make another product that would yield a total contribution margin of ₱60,000 per year. The unit cost for making the components is shown below A. How much is the total cost to make the component? B. How much is the total cost to buy the component? C. How much is opportunity cost in the given problem? D. What should be the optimal decision for the company?
- A firm is planning to replace an old machine that was acquired several years ago at a cost of ₱600,000. The machine has been depreciated to its salvage value of ₱60,000. A new machine can be purchased at ₱800,000, 2/10, n/30. The dealer will grant a trade-in allowance of ₱65,000 on the old machine. If the new machine is not purchased, the firm will spend ₱250,000 to repair the old machine. Gains on losses in trade-in transactions are not subject to income tax. The cost of repair to the old machine can be deducted in the first year for computing income tax. Income tax is 25% of the income subject to tax. The net cost of investment would be? ₱540,000 ₱784,000 ₱719,000 ₱469,000 ₱531,500 ₱406,500A firm is planning to replace an old machine that was acquired several years ago at a cost of ₱600,000. The machine has been depreciated to its salvage value of ₱60,000. A new machine can be purchased at ₱800,000, 2/10, n/30. The dealer will grant a trade-in allowance of ₱65,000 on the old machine. If the new machine is not purchased, the firm will spend ₱250,000 to repair the old machine. Gains on losses in trade-in transactions are not subject to income tax. The cost of repair to the old machine can bededucted in the first year for computing income tax. Income tax is 25% of the income subject to tax. The net cost of investment would be?a. ₱540,000 b. ₱784,000 c. ₱719,000d. ₱469,000 e. ₱531,500 f. ₱406,500The quarrying cost of marble and granite blocks plus delivery cost to the processing plant each is ₱2400 per cubic meter. Processing cost of marble into tiles is ₱200 per square meter and that of granite into tiles also is ₱600 per square meter. If marble has net yield of 40 square meters of block and sells at ₱400 per square meter, and granite gives a net yield of 50 square meter of tiles per cubic meter of block, and sells at ₱1000 per square meter, determine the more profitable material, considering all other costs to be the same and how much is the difference in profit. Show completesolution.
- A food processing plant consumed 600,000 kwh of electric energy annually and pays an average of ₱2.00 per kwh. A study is being made to generate its own power to supply the plant the energy required, and that the power plant installed would cost ₱2,000,000. Annual operation and maintenance, ₱800,000. Other expenses, ₱100,000 per year. Life of power plant is 15 years; salvage value at the end of life is ₱200,000; annual taxes and insurance, 6% of first cost; and rate of interest is 15%. Using the sinking fund method for depreciation, determine if the power plant is justifiable? Ans: Rate of return is 7.11%, the power plant is not a good investment.UEM Construction Sdn Bhd is considering investing in a new construction equipment costing RM150,000. Its life is expected to be four years and it will have no scrap value at the end of this period. The following details are given relating to the machinery’s activities: Unit selling price is RM40.00 and unit variable costs of production are: RM Direct materials 6.00 Direct labour 3.80 Variable overheads 5.20 Sales volume relating to production of the construction equipment is expected to be: Year Sales Volume (units) 1 2,100 2 2,200 3 2,500 4 2,600 - Fixed costs amount to RM12,000 per annum. One quarter of the fixed costs is cash flow related items. - The company anticipates a cost of capital to be 10%. Question : a) Explain the Net Present Value relating to investment of funds in long term investments. b) Based on your answer in (a) above, should the project be accepted? Explain your decision.…Pompeo Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $95,000. The freight and installation costs for the equipment are $4,500. If purchased, annual repairs and maintenance are estimated to be $3,600 per year over the 4-year useful life of the equipment. Alternatively, Pompeo can lease the equipment from a domestic supplier for $29,200 per year for 4 years, with no additional costs. Question Content Area Prepare a differential analysis dated December 11 to determine whether Pompeo should Lease Equipment (Alternative 1) or Buy Equipment (Alternative 2). Hint: This is a lease-or-buy decision, which must be analyzed from the perspective of the equipment user, as opposed to the equipment owner. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential AnalysisLease Equipment (Alt. 1) or Buy Equipment (Alt. 2)December 11 Lease…
