Problems 43 and 44 are based on thefollowing statement:UsedNewmachinemachineInitial Cost15,00040,000($)Annual8,0002,000operatingcost($/year)Salvage5,00010,000value ($)Life (years)36Use an interest rate of 10% per year43. The present worth of the newmachine is closest to:(A) $43,630(B) $43,066(C) $45,210(D) $49,66044. To compare the machines on thebasis of a present worth analysis, thepresent worth values to use are:(A) PWused $31,139, PW new = $43,066(B) PWused $31,139, PW new = $37,461(C) PWused $54,533, PW new = $43,066(D) PWused $54,533, PW new = $37,461

The objective of the question is to calculate the present worth of the new machine and to compare…

Answered: Problems 43 and 44 are based on the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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15. Given the following table of financial data for an asset that was bought today and whose service life is 3 years, what is its economic service life if the interest rate is 8%? Market Value ($) 23,000 18,000 15,000 12,000 Year (n) O&M Cost ($) 3,400 4,500 5,700 1 3
Compare the alternatives below on the basis of their capitalized costs with adjustments made for inflation. Use i =12% per year and f = 3% per year. Alternative X Y First cost, $ −18,500,000 −9,000,000 AOC, $ per year −25,000 −10,000 Salvage value, $ 105,000 82,000 Life, years ∞ 10
2. An electric generator is purchased for P80 000.00, it is expected to be used for five years and then sold for P15 000.00. Annual operating and maintenance costs are estimated at P20 000.00. Using a discount rate of 10%, determine the present worth of the investment. (Ans. — P146 502.00)
Two mutually exclusive alternatives have the estimates shown below. Use annual worth analysis to determine which should be selected at an interest rate of 15% per year. Q R $-44,000 $-11,000 $3,000 $-84,000 $-6,000 in year 1, increasing by $1,000 per year thereafter $10,000 First Cost AOC per Year Salvage Value Life 2 years 4 years Alternative (Click to select) vshould be selected. (Click to select) Q
Find the What is the cC of initial cost 936,069$, annual costs of 42,230s, and recurring costs every 5 years of 94,1348 at IR 12% per year. "Enter the final value using +/- sign and without the currency." Example: -23.43 OR +23.43
Two mutually exclusive alternatives have the estimates shown below. Use annual worth analysis to determine which should be selected at an interest rate of 10% per year. First cost, $ AOC, $ per year Salvage value, $ Life, years Q -42,000 -6,000 0 2 R -80,000 -7,000 in year 1, increasing by $1,000 per year thereafter 4,000 4
24. Using a MARR of 15%, determine the annual worth of packaging equipment having an initial cost of P830 000, a 10-year life, and a salvage value of P140 000.00. A net revenue of P250 000.00 per year is expected from this equipment. (Ans. P91 516.08)
Compare the alternatives below on the basis of their capitalized costs with adjustments made for inflation. Use i=13% per year and f= 2.6% per year. Alternative First cost, $ Y -15,500,000 -12,500,000 AOC, $ per year Salvage value, $ Life, years -25,000 -10,000 105,000 82,000 10 00 The capitalized cost for alternative X is $ The capitalized cost for alternative Y is $| Select alternative (Click to select) v
The exit price of an asset is RO 10,000 and the cost of disposal of the asset is RO 150. The asset is estimated to yield a future cash flow of RO 1000 per annum for the next five years. The Net realizable value of the asset under current cost accounting is a. RO 10,850 b. RO 11,150 c. RO 9500 d. RO 9850
Two mutually exclusive alternatives have the estimates shown below. Use annual worth analysis to determine which should be selected at an interest rate of 10% per year. Q $-44,000 R $-84,000 First Cost AOC per Year Salvage Value $-10,000 $-5,000 in year 1, increasing by $1,000 per year thereafter $4,000 $5,000 Life 2 years 4 years Alternative (Click to select) should be selected.
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