Prepare a differential analysis. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss.
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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 with Old Machine (Alternative 1) |
Replace Old Machine (Alternative 2) |
Differential Effects (Alternative 2) |
|
| Revenues: | |||
| Proceeds from sale of old machine | ? | ? | ? |
| Costs: | |||
| Purchase price | ? | ? | ? |
| Variable |
? | ? | ? |
| ? | ? | ? |
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- A new machine can be purchased for $50,000. Its expected useful life is seven years, with a salvage value of $5,000. Annual revenues will be $22,000 per year and annual expenses will be 8,000 per year, over the seven-year study period. If the MARR is 10%, determine whether the offer should e accepted. O a. Acceptable and its AW = $4257 O b. Not acceptable and its AW = $2,345 O. Acceptable, and its AW = $5067 O d. Not acceptable and its AW = -$3,281A CNC machine costs $240,000. A facility purchases one and plans to use it for 11 years, at which point it will have a salvage value of $43,000. What are the depreciation allowance and book value after 4 years of use using declining balance depreciation? Depreciation allowance: $4 Book value: Carry all interim calculations to 5 decimal places and then round your final answers to a whole number. The tolerance is +70. eTextbook and Media Assistance Used Hint Assistance Used Calculate the depreciation percentage that will depreciate the CNC machine to its salvage value in 11 years and then determine whether or not this percentage is permissible by the IRS. %24Gull Corp. is considering selling its old popcorn machine and replacing it with a newer one. The old machine has a book 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) $ $ $ Should the machine be replaced?
- Baird Rentals can purchase a van that costs $110,000; it has an expected useful life of five years and no salvage value. Baird uses straight-line depreciation. Expected revenue is $40,425 per year. Assume that depreciation is the only expense associated with this Investment. Required a. Determine the payback period. Note: Round your answer to 1 decimal place. b. Determine the unadjusted rate of return based on the average cost of the investment. Note: Round your answer to 1 decimal place. (l.e., .234 should be entered as 23.4). a. Payback period b. Unadjusted rate of return years %in a replacement analysis, the following is known about the challenger: the initial investment is $8000, there is no annual maintenance for the first three years, maintenance each year in years four and five is $2000, then $4500 in year six, and invreasinh by $2500 each year thereafter. the salvage value is $0 at all times and the MARR is 12% per year. the economic life of the challeneger is how many years?2) The initial cost of a new m/c is $10,000. The annual operating cost is $1,000/yr for first 3 years, and then becomes $3,000/yr after that. The m/c needs a major repair at the end of 5th year, which costs $5,000. The m/c has 10 years useful life with salvage value of $4,000. Calculate EUAC for keeping the m/c for 10 years. (i=10%/yr)
- 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?Solve on the white paper or the typed. Not use excel Q) The original cost of a certain piece of equipment is 150,000 and sometimes it is depreciated by a 10% sinking fund method. Determine the annual depreciation charge if the book value of the equipment after 10 years is the same as if it had been depreciated at 14,000 each year by straight-line formulaTwo methods can be used to produce expansion anchors. Method A costs $ 70, 000 initially and will have a $15,000 salvage value after 3 years. The operating cost with this method will be $36,000 in year 1, increasing by $3200 each year. Method B will have a first cost of $ 116,000, an operating cost of $10000 in year 1, increasing by $10000 each year, and a $46, 000 salvage value after its 3 year life. At an interest rate of 8% per year, which method should be used on the basis of a present worth analysis?
- A pipeline contractor can purchase a needed truck for $44,000. Its estimated life is 6 years, and it has no salvage value. Maintenance is estimated to be $2,100 per year. Operating expense is $60 per day. The contractor can hire a similar unit for $130 per day. MARR is 7%. Click here to access the TVM Factor Table Calculator Part a K Part b If the truck is needed for 180 days/year, should the contrac buy the truck or hire the similar unit? Determine the dollar amount of annual savings generated by using the preferred alternative rather than the nonpreferred. Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±5. Save for Later Attempts: 0 of 3 used Submit AnswerThis 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?Show the complete solution. Do not used Excel. Use manual method/handwritten The maintenance costs of a new boiler are estimated as follows: P 600 per year for the first 3 years, P X at the 4th year, and P 1,800 per year starting at the 5th year up to the end of its 10 - year life. If the future value of all the maintenance is P 20,000, find the value of X. Money is 6% compounded annually.