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- A lift truck priced at $38,000 is acquired bytrading in a similar lift truck and paying cash for theM09_PARK9091_06_GE_C09.indd 506 10/22/15 5:16 PMProblems 507remaining balance. Assuming that the trade-in allowance is $9,000 and the book value of the asset tradedin is $7,808, what is the cost basis of the new assetfor the computation of depreciation for tax purposes?31. The purchase of a motor for P6000 and a generator for P4000 will allow the company to produce its own energy. The configuration can be assembled for P500. The service will operate for 1600 hours per year for 10 years. The maintenance cost is P300 per year, and cost to operate is PO.85 per hour for fuel and related cost. Using straight line depreciation, what is the annual cost for the operation? There is a P400 salvage value for the system at the end of 10 year. a. P2,710 c. P2,630 b. P2,480 d. P2,670A manufacturing company purchased 10 years a milling machine for ₽60,000. A straight-linedepreciation reserve had been provided on the 20-year life of the machine. The owner of themachine shop desires to replace the old milling machine with a modern unit of manyadvantages costing ₽100,000. It can sell the old unit for ₽20,000. How much new capital will berequired for the purchase?
- Show your complete solution. 19. A machine cost 7,350 has a life of 8 years and has a salvage value of 350 at the end of a years. Determine its book value at the end of 4 years using Constant- Percentage of Declining Value.3. Make an economic analysis to determine which of the following two machines capable of performing the same task in a given amount of time, should be purchased. The minimum return is 8%. Machine A Machine B First Cost P10,000 6 years P20,000 14 years Estimated Life Salvage Value Annual maintenance P6,000 P300 P250 Basing on annual cost, using straight line method of computing depreciation, determine which machine you would choose and how much is the difference in its annual cost? Hint: Compute the Annual Cost of Machine A and Machine B then compare the costs, get the difference and recommend.AMong to anether quetion will save this response Question S Ipurchased a treaury bill for $500 and then sold it for $550 three months later. Calculate the holding period return. O toN ORIN O MAN AMoving to another question will save this response. MacBook Air 828 5 E T Y] D K C V B. エ
- Question 31 4) In order to make a replacement decision, a firm calculated the equivalent annual cost of owning an asset as follows: Replacement Period Salvage Value EAC Capital Costs Annual Repair EAC Repair Costs Costs 1 $1420 $1,287 2 $1,102 $1,082 $400 $189 3 $910 $976 S600 $298 4 S795 $812 S800 $437 O a. in 4 years O b. in 3 years Oc.in 1 year O d. in 2 yearsuppose that you purchased a HVAC system five years ago for $75, 000. The O&Mcosts are $15, 000 this year and are expected to increase by $1, 000 each year for the next five yearsthen remain the same for the following years.The current salvage value of the system is $15, 000; salvage value after one year is estimated tobe $12, 000; after two years, $11, 000; after three years, $10, 000; after four years, $9, 000; and so on.A new industrial HVAC system is available for purchase at a price of $95, 000, including instal-lation. The market value of the new system will decrease at a rate of 15% each year. The O&Mcosts are expected to be $1, 000 in the first year, and will increase at a rate of 20% each year. Themaximum service life of the new system is 10 years. Assume that your company uses an interestrate of 10% for all project evaluations.(a) Find the remaining economic life of the currently owned asset.(b) What is the economic service life of the new system?(c) Use the…(answer for 10 minutes) A Cooling Tower costs P 99,495 will have an estimated life of 9 years. Using double-declining balance method, compute the book value at the end of the year 4. **Use four (4) decimal places
- A table planner machine which costs P 50 000 when brand new has a salvage value of x pesos and is expected to lasts for 23, 000 hours in a period of 5 years. In the first year of service it was used for 7 000 hours. What is the value of x if the book value of the machine at the end of first year is P 36 000? Show complete solution. Do not use excel A. 3 000 B. 5, 000 C. 4, 000 D. 2, 000PLEASE WRITE YOUR SOLUTION ON A PAPER, THANK YOU A Contractor imported a bulldozer for his job, paying P 350,000 to the Manufacturer. Freight andInsurance charges amounted to P 18,000; customs’ broker’s fees and arrastre services, P 8,500;taxes, permits and other expenses, P 35,000. If the contractor estimates the life of the bulldozer tobe 10 years with a salvage value of P 20,000, determine the book value at the end of 8 years, a. using the Double Declining Balance Method. b. using the Declining Balance Method. c. using the Sinking Fund Method, i = 10% d. using the Sum of the Years MethodPlease solve in 30 min i will give you a upvote PROBLEM 2 Karim Inc. calculated the annual cost of owning an asset as follows. EUAC Annual EUAC Replacement Capital Repair Repair Year Costs Costs Costs $1,400 $1,100 1 2 $450 $200 3 $900 $600 $350 4 $800 $800 $400 $700 $1,000 $600 $1,300 $500 $1,600 $450 $600 7 $750 a. When should the company replace the equipment? b. If Karim Inc currently replaces its equipment every year to avoid increasing annual repair costs, how much can the company save annually?