ALE_SP2024

Due to equipment power failure of Ceramics Plant, a disbursement a day would be$3,500. To avoid future power failures, it is recommended to purchase a standby machinefor $30,000 which is estimated to have a useful life of 14 years, $7,000 salvage value atthe end of this time. Previous records illustrate normal power failure of 4 days each year.Annual maintenance and operation would cost $3,200 for 4 days. Minimum required rateof return is 17%. Will you recommend purchasing the standby machine?

ok value of $5,000, and its remaining useful life is five years. Annual costs are $4,000. A high school is willing to buy it for $2,000. New equipment would cost $18,000 with annual operating costs of $1,500. The new machine has an estimated useful life of five years. Prepare a differential analysis. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue with (Alternative 1) or Replace (Alternative 2) Old Machine     Continue withOld Machine(Alternative 1) Replace OldMachine(Alternative 2) DifferentialEffects(Alternative 2) Revenues:       Proceeds from sale of old machine ? ? ? Costs:       Purchase price ? ? ? Variable manufacturing costs (5 years) ? ? ? Profit (loss) ? ? ? Feedback   Partially correct

A contractor purechased equipment for $20,000 which provided future income of $45,000 after 11 years. Please write formula, use compound interest table for extracting factors, show your solution step by step. a) Apply trial and fault method for finding acceptable range for rate of return. b) Apply interpolation method for finding acceptable range for rate of return.

A company is considering two alternatives with regards to equipment which it needs. The alternatives are as follows: Alternative A: Purchase Cost of Equipment 703,668700,000 Salvage Value 100,454100,000 Daily operating cost 501500 Economic life, years 10 Alternative B: Rental at 1,5751,500 per day. At 18% interest, how many days per year must the equipment be in use if Alternative A is to be chosen.

On 1 July 20X4, Experimenter opened a chemical reprocessing plant. The plant was due to be active for five years until 30 June 20X9, when it would be decommissioned. At 1 July 20X4, the costs of decommissioning the plant were estimated to be $4 million in 5 years’ time. The company considers that a discount rate of 12% is appropriate for the calculation of a present value, and the discount factor at 12% for Year 5 is 0.567. What is the total charge to the statement of profit or loss (depreciation and finance charge) in respect of the decommissioning for the year ended 30 June 20X5?

This asset is similar across other asset replacement questions: An asset has a first cost of $70,000. In the first year the asset loses $20,000 in value, and then falls in value by 20% per year thereafter. Operating and Maintenance costs are $20,000 in the first year and increases by $5000 per year each year going forward. MARR = 10%. Find the EAC for N=5. The answer is within $500 of which of the following?

EE printing is in the evaluation process for the acquisition of a new computer system. The total depreciable base (cost plus installation) is $170,000. The new equipment will increase Earnings before depreciation and taxes by $67,400 during years 1 to 3 and $30,000 during years 4 to 6. EE marginal tax rate is 40% and Cost of Capital is 11% Calculate the Payback Period PRESENT YOUR ANSWER ROUNDED TO O DECIMAL PLACES Reeniasta

Colaw Company is considering buying equipment for $240,000 with a useful life of five years and an estimated salvage value of $12,000. If annual expected income is $21,000, the denominator in computing the annual rate of return is Group of answer choices $120,000. $252,000. $240,000. $126,000.

Halcrow, Inc. hopes to replace an outdated tracking system currently installed on CNC machines. The challenger system has an initial cost of $70,000, an estimated annual operating cost of $20,000, a maximum useful life of 5 years, and a salvage value of $10,000 at any time. With an interest rate of 11% per year, determine the economic life of the service and the corresponding amount for year 6. a)-35,382.8 b.)-35,482.8 c.)-35,582.8 d.)-35,282.8

1), Acme Molding is examining five alternatives for a piece of material handling equipment. Each has an expected life of 8 years with no salvage value, and Acme's MARR is 16%. Using an incremental analysis, which material handling alternative should be chosen? The table below includes initial investment, net annual income, and IRR for each alternative. Alternative A B C E Capital investment -$10,000 -$10,600 -$14,000 -$16,300 -$19,000 Net annual income $2,500 $2,600 $2,900 $3,500 $4,800 IRR 18.62% 18.01% 12.83% 13.88% 18.97%

You are given opportunity to purchase product for $42, 000. The product will have annual operating expenses of $4,000, and a salvage value of $20,000 at the end of its useful life of 6 years. Assuming a discount rate of 9.0%, what is the minimum acceptable revenue to justify taking this project? A 1.01% B $333 C $2704 D $767 E $10704

On October 1, White Way Stores Inc. is considering leasing a building and purchasing the necessary equipment to operate a retail store. Alternatively, the company could use the funds to invest in $180,000 of 6% U.S. Treasury bonds that mature in 16 years. The bonds could be purchased at face value. The following data have been assembled: Cost of store equipment$180,000Life of store equipment16 yearsEstimated residual value of store equipment$15,000Yearly costs to operate the store, excluding depreciation of store equipment$58,000Yearly expected revenues—years 1–8$85,000Yearly expected revenues—years 9–16$73,000 Required:A. Prepare a differential analysis as of October 1 presenting the proposed operation of the store for the 16 years (Alternative 1) as compared with investing in U.S. Treasury bonds (Alternative 2). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or…

Answer the question. A challenger asset with a maximum useful life of 6 years has a first cost of $43,000 and an estimated annual operating cost of $6250. The market value is expected to decrease by $6450 each year for the next 6 years. If the MARR is 10% per year, fill in blanks below to correctly represent the equation for calculating the EUAC at the end of year 2. (HINT: skip $ and comma symbols) EUAC2 = 43,000 ( 10%, 2) + (43,000 - 6450*2) ( 10%,2)

An interest rate of 15% is used to evaluate a new system that has a first cost of $212,400, annual operating and maintenance costs of $41,200, annual savings of $94,600, a life of 6 years, and a salvage value of $32,500. After initial evaluation, the firm receives word from the vendor that the first cost is 5% higher than originally quoted. The percentage error in the system' s present worth from this is closest to what value? (a) 5% (b) 15% (c) 100% (d) 300%

This is problem 12-8 on page 429 of your text: You must evaluate the purchase of a spectrometer for the R&D department. The base price is $140,000, and it would cost another $30,000 to modify the equpment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $60,000. The applicable depreciation rates are 33%, 45%, 15%, and 7% as discussed in Appendix 12A. The equipment would require an $8,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $50,000 per year in before-tax labor costs. The firm's marginal federal-plus-state tax rate is 40%. The firm's WACC ("hurdle rate" or "required rate of return") is 12%

This is problem 12-8 on page 429 of your text: You must evaluate the purchase of a spectrometer for the R&D department. The base price is $140,000, and it would cost another $30,000 to modify the equpment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $60,000. The applicable depreciation rates are 33%, 45%, 15%, and 7% as discussed in Appendix 12A. The equipment would require an $8,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $50,000 per year in before-tax labor costs. The firm's marginal federal-plus-state tax rate is 40%. The firm's WACC ("hurdle rate" or "required rate of return") is 12% Question 1 (1 point) Given the information this problem: What is the initial investment outlay for the project? That is, what is the Year 0 project cash flow? ) ($30,000) ($170,000) O ($140,000) ) ($178,000)

The  Molding Department of General Santos,  Inc. doing an investigation for the possibility of acquiring a new unit of equipment at the amount of $120,000. Cash cost savings before income tax from the use of this equipment has been estimated at $50,000 a year for a period of 4 years. At the end of 4 years, the equipment will have no salvage value. The minimum acceptable rate is 12% discounted rate.   Requirements: Calculate the NPV under straight-line depreciation Calculate the NPV under SYD depreciation. Explain how bookkeeping method can help to improve the rating of a capital investment project.

The cost of an equipment is P650,000 and the cost of installation is P45,000. If the salvage value is 12% of the cost of equipment at the end of 10 years, determine the book value at the end of the fourth year. a. Use straight-line method (SLM) b. Use sinking fund method (SFM) at 3.5% interest. Please answer completely will give rating surely Complete Answer needed

Checker LLC has purchased a $100,000 asset to be located in its Italian facility. Either of two classical depreciation models is allowed: SL depreciation over 5 years with a salvage of $10,000 or DDB depreciation over 6 years with no salvage considered. The asset is expected to be discarded after 5 years. (Spreadsheet exercise) Use the SLN and DDB functions to plot the book value curves and determine which method has a lower BV after 5 years.

A piece of equipment has a first cost of $165,000, a maximum useful life of 7 years, and a market (salvage) value described by the relation S = 120,000 – 23.000k, where k is the number of years since it was purchased, The salvage value cannot go below zero. The AOC series is estimated using AOC = 60,000 + 12,000k. The interest rate is 13% per year. Determine the economic service life and the respective AW. The economic service life is 4 year(s) and the AW value is $ 100,000 a

You must evaluate the purchase of a spectrometer for the R&D department. The base price is $140,000, and it would cost another $30,000 to modify the equpment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $60,000. The applicable depreciation rates are 33%, 45%, 15%, and 7% as discussed in Appendix 12A. The equipment would require an $8,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $50,000 per year in before-tax labor costs. The firm's marginal federal-plus-state tax rate is 40%. The firm's WACC ("hurdle rate" or "required rate of return") is 12% Question 12 Given the information in the problem: What is the project's Modified Internal Rate of Return (MIRR)? 12% ) 7.74% 1 6.03% 4.02%

You must evaluate the purchase of a spectrometer for the R&D department. The base price is $140,000, and it would cost another $30,000 to modify the equpment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $60,000. The applicable depreciation rates are 33%, 45%, 15%, and 7% as discussed in Appendix 12A. The equipment would require an $8,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $50,000 per year in before-tax labor costs. The firm's marginal federal-plus-state tax rate is 40%.