Hartley's Meat Pies is considering replacing its existing delivery van with a new one. The new...
Marine Industrial Coatings, Inc. is considering replacing its existing computer system with a new computer system. The new system can offer considerable savings in computer processing and inventory management costs. Information about the existing system and the new system follow: | Existing Computer $10,000 $ 3,500 $ 6,000 New Computer $15,000 $ 2,000 Original cost Annual operating cost Accumulated depreciation Current salvage value of the existing system Remaining life in 5 years Salvage value in 5 years $ 4,000 5...
Question 2 * Little Star Company is considering replacing its existing machine with a new one. The machine wa vought five years ago at a cost of RM700,000. It has another five years of remaining useful life, with Zen salvage value. If it is sold now, the company can get RM200,000.00 The new machine would cost RM1 million and is expected to have a useful life of nve years. A salvage value of RM100,000 is expected at the end of...
A company is considering replacing one of its existing machines. The existing machine is being depreciated at $25,000 per year, and currently has a book value of $50,000. The new machine would have annual depreciation expense of $36,000 per year for five years. In an NPV analysis what depreciation expense would you assigned to the new machine? Show the depreciation expense for all five years.
Purinton Company is considering replacing a metal cutting machine with a newer model. Here are the data the management accountant prepares for the existing (old) machine and the replacement (new) machine: Old New Original Cost $1,000,000 $600,000 Useful Life 5 Years 2 Years Current Age 3 Years 0 Years Remaining Useful Life 2 Years 2 Years Accumulated Depreciation $600,000 n.a. Current Disposal Value $40,000 n.a. Terminal Disposal Value $0 $0 Annual Operating Costs $800,000 $460,000 Annual Revenues $1,100,000 $1,100,000 Purinton...
LoRusso Co. i considering replacing an existing piece of equipment. The project involves the following: The new equipment will have a cost of $1,200,000, and it is eligible for 100% bonus depreciation so it will be fully depreciated at t 0 The old machine was purchased before the new tax law, so it is being depreciated on a straight-line basis. It has a book value of $200,000 (at year 0) and four more years of depreciation left ($50,000 per year)...
work is not needed
Question 44 Smith Industries is considering replacing a machine that is presently used in its production process. The following information is available: Old Machine Replacement Machine $45,000 $35.000 5 Original cost Remaining useful life in years Current age in years Book value 5 0 5 $25,000 $8,000 Current disposal value in cash Future disposal value in cash (in 5 years) Annual cash operating costs $0 $0 $7,000 $4,000 For a machine replacement decision which of the...
Compa LA Company is considering replacing one of its machines in order to save opere current machine are $70,000 per year per year; operating costs with the new machine are expected to be $10.000 machine will cost $70,000 and will last for six vers at which time it can be sold for 1.00 last for six years, at which time it can be sold for $1.500. The current machine w last for six more years but will not be worth...
Interstate Manufacturing is considering either replacing one of its old machines with a new machine or having the old machine overhauled, Information about the two alternatives follows. Management requires a 8% rate of return on its investments. Use the (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Alternative 1: Keep the old machine and have it overhauled. If the old machine is overhauled, it will be kept for...
Economic Life The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to generate net after-tax operating cash flows, including depreciation, of $6,250 per year. The truck has a 5-year expected life. The expected salvage values after tax adjustments for the truck are given below. The company's cost of capital is 11 percent. Year Annual Operating Cash Flow Salvage Value 0 -$22,500 $22,500 1 6,250 17,500 2 6,250 14,000 3 6,250...
Machine Replacement Decision Creekside Products Inc. is considering replacing an old piece of machinery, which cost $2,495,000 and has $1,463,000 of accumulated depreciation to date, with a new machine that costs $1,876,000. The old machine could be sold for $296,000. The annual variable production costs associated with the old machine are estimated to be $681,000 for eight years. The annual variable production costs for the new machine are estimated to be $463,100 for eight years. a. Determine the total and...