following is the table to determine economic life of a machine. Assuming 9% cost of capital,...
following is the table to determine economic life of a machine.
Assuming 9% cost of capital, compute the missing number for year 2
in the last column, marked with ?
End of year Total marginal Cost for year
| end of year | Total cost for year | EUAC through year | ||
| 1 | 25185 | 25185 | ||
| 2 | 21923 | ? | ||
| 3 | 23157 | |||
| 4 | 25362 |
Homework Answers
Assume that there is no salvage value for the assets and no annual cash flow for the assets.
EUAC is Equivalent Uniform Annual cost
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following is the table to determine economic life of a machine.
Assuming 9% cost of capital,...
how we got the table Economic Life of a Defender (Existing Asset) It is desired to...
how we got the table
Economic Life of a Defender (Existing Asset) It is desired to determine how much longer a forklift truck should remain in service before it is replaced by the new truck (challenger) for which data were given in Example 9-4 and Table 9-2. The defender in this case is two years old, $7.500. It kept, its originally cost $19.500, and has a present realizable MV of $7,500 MVs and annual expenses are expected to be as...
explain how we got the depreciation and interest on capital EXAMPLE 9-5 Economic Life of a...
explain how we got the depreciation and interest on
capital
EXAMPLE 9-5 Economic Life of a Laptop Computer Determine the economic life of an $800 laptop computer. Your person rate is 10% per year. Annual expenses and year-end resale values are to be the following: Your personal interes le values are expected Year 1 Year 2 $150 $600 Software upgrades and maintenance Resale value at end of year Year 3 $300 $200 $200 $450 Solution The marginal cost of keeping...
do step by step 5. Complete the following table to find the economic life of the...
do step by step
5. Complete the following table to find the economic life of the asset, having these cash flow estimates: (15 ptos) 12) Capital Investment = $40,000 Market Value (MV) - $12.000 all the time Annual Expenses coy(1)$4,000 coy(2)$6,000, coy(3) 8.000, The MARR is 8% per year. ( MARR) (3] [4 [5] [6] MV, MV.1 - MV * MV. Ex TC031141151 EOYK Market Loss in Cost of Annual Total Cost Value Market Capital Expense 40,000 12.000 4.000 12,000...
13-41 The total marginal cost data for a grouping of defender machines over the next 5 years is: ...
13-41 The total marginal cost data for a grouping of defender machines over the next 5 years is: Year 1 Marginal Cost $120,000 100,000 50,000 80,000 250,000 4 What replacement technique is recommended if a challenger is being considered to replace the defender machine grouping. Why? What is the economic life and minimum EUAC of the machine group? Use an interest rate of 12% If the challenger has a minimum EUAC of $110,000, what is your recommendation? a. b. c....
please use Excel sheet template to solve the problem Economic Life 13-1 An injection-molding machine has...
please use Excel sheet template to solve the
problem
Economic Life 13-1 An injection-molding machine has a first cost of $1,050,000 and a salvage value of $225,000 in any year. The maintenance and operating cost is $235,000 with an annual gradient of $75,000. The MARR is 10%. What is the most economic life? A В D E F G H 19 13-37 MARR% 21 First Cost 20% 200000 Year Market Value Lost MV Оper Cost Maint. Lost Int. Total MC...
13-41 The total marginal cost data for a grouping of defender machines over the next 5...
13-41 The total marginal cost data for a grouping of defender machines over the next 5 years is: Year 1 Marginal Cost $120,000 100,000 50,000 80,000 250,000 4 What replacement technique is recommended if a challenger is being considered to replace the defender machine grouping. Why? What is the economic life and minimum EUAC of the machine group? Use an interest rate of 12% If the challenger has a minimum EUAC of $110,000, what is your recommendation? a. b. c.
Part 1. A machine costing $22,000 with a five-year life and an estimated $2,000 salvage value...
Part 1. A machine costing $22,000 with a five-year life and an estimated $2,000 salvage value is installed on January 1. The factory manager estimates the machine will produce 1,000 units of product during its life. It actually produces the following units: Year 1, 200; Year 2, 400; Year 3, 300; Year 4, 80; and Year 5, 30. The total number of units produced by the end of Year 5 exceeds the original estimate this difference was not predicted. (The...
Problem 10-2A Depreciation methods A machine costing $257,500 with a four-year life and an estimated $20,000...
Problem 10-2A Depreciation methods A machine costing $257,500 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 475.00 units of product during its life. It actually produces the following units: 220,000 in Year 1, 124.600 in Year 2, 121,800 in Year 3, and 15,200 in Year 4. The total number of units produced by the end of Year! exceeds the original estimate-this...
skip double declining balance Problem 10-2A Depreciation methods A machine costing $257.500 with a four-year life...
skip double declining balance
Problem 10-2A Depreciation methods A machine costing $257.500 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 475,000 units of product during its life. It actually produces the following units: 220,000 in Year 1. 124,600 in Year 2, 121,800 in Year 3, and 15.200 in Year 4. The total number of units produced by the end of Year...
The replacement of a planning machine is being considered by the Reardom Furniture Company. (There is...
The replacement of a planning machine is being considered by the Reardom Furniture Company. (There is an indefinite future need for this type of machine.) The best challenger will cost $25,000 for installation and will have an estimated economic life of 13 years and a $1,800 MV at that time. It is estimated that annual expenses will average $15,500 per year. The defender has a present BV of $5,500 and a present MV of $3500. Data for the defender for...
how we got the table
Economic Life of a Defender (Existing Asset) It is desired to determine how much longer a forklift truck should remain in service before it is replaced by the new truck (challenger) for which data were given in Example 9-4 and Table 9-2. The defender in this case is two years old, $7.500. It kept, its originally cost $19.500, and has a present realizable MV of $7,500 MVs and annual expenses are expected to be as...
explain how we got the depreciation and interest on
capital
EXAMPLE 9-5 Economic Life of a Laptop Computer Determine the economic life of an $800 laptop computer. Your person rate is 10% per year. Annual expenses and year-end resale values are to be the following: Your personal interes le values are expected Year 1 Year 2 $150 $600 Software upgrades and maintenance Resale value at end of year Year 3 $300 $200 $200 $450 Solution The marginal cost of keeping...
do step by step
5. Complete the following table to find the economic life of the asset, having these cash flow estimates: (15 ptos) 12) Capital Investment = $40,000 Market Value (MV) - $12.000 all the time Annual Expenses coy(1)$4,000 coy(2)$6,000, coy(3) 8.000, The MARR is 8% per year. ( MARR) (3] [4 [5] [6] MV, MV.1 - MV * MV. Ex TC031141151 EOYK Market Loss in Cost of Annual Total Cost Value Market Capital Expense 40,000 12.000 4.000 12,000...
13-41 The total marginal cost data for a grouping of defender machines over the next 5 years is: Year 1 Marginal Cost $120,000 100,000 50,000 80,000 250,000 4 What replacement technique is recommended if a challenger is being considered to replace the defender machine grouping. Why? What is the economic life and minimum EUAC of the machine group? Use an interest rate of 12% If the challenger has a minimum EUAC of $110,000, what is your recommendation? a. b. c....
please use Excel sheet template to solve the
problem
Economic Life 13-1 An injection-molding machine has a first cost of $1,050,000 and a salvage value of $225,000 in any year. The maintenance and operating cost is $235,000 with an annual gradient of $75,000. The MARR is 10%. What is the most economic life? A В D E F G H 19 13-37 MARR% 21 First Cost 20% 200000 Year Market Value Lost MV Оper Cost Maint. Lost Int. Total MC...
13-41 The total marginal cost data for a grouping of defender machines over the next 5 years is: Year 1 Marginal Cost $120,000 100,000 50,000 80,000 250,000 4 What replacement technique is recommended if a challenger is being considered to replace the defender machine grouping. Why? What is the economic life and minimum EUAC of the machine group? Use an interest rate of 12% If the challenger has a minimum EUAC of $110,000, what is your recommendation? a. b. c.
Part 1. A machine costing $22,000 with a five-year life and an estimated $2,000 salvage value is installed on January 1. The factory manager estimates the machine will produce 1,000 units of product during its life. It actually produces the following units: Year 1, 200; Year 2, 400; Year 3, 300; Year 4, 80; and Year 5, 30. The total number of units produced by the end of Year 5 exceeds the original estimate this difference was not predicted. (The...
Problem 10-2A Depreciation methods A machine costing $257,500 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 475.00 units of product during its life. It actually produces the following units: 220,000 in Year 1, 124.600 in Year 2, 121,800 in Year 3, and 15,200 in Year 4. The total number of units produced by the end of Year! exceeds the original estimate-this...
skip double declining balance
Problem 10-2A Depreciation methods A machine costing $257.500 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 475,000 units of product during its life. It actually produces the following units: 220,000 in Year 1. 124,600 in Year 2, 121,800 in Year 3, and 15.200 in Year 4. The total number of units produced by the end of Year...
The replacement of a planning machine is being considered by the Reardom Furniture Company. (There is an indefinite future need for this type of machine.) The best challenger will cost $25,000 for installation and will have an estimated economic life of 13 years and a $1,800 MV at that time. It is estimated that annual expenses will average $15,500 per year. The defender has a present BV of $5,500 and a present MV of $3500. Data for the defender for...
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