3. An asset costs $10,000 and is expected to have $1,000 salvage value at the end...
If an asset costs $144000 and is expected to have a $24000 salvage value at the end of its 10-year life, and generates annual net cash inflows of $24000 each year, the cash payback period is 6 years. 4 years. 7 years. 5 years.
If an asset costs $180000 and is expected to have a $60000 salvage value at the end of its 10-year life, and generates annual net cash inflows of $60000 each year, the cash payback period is
An asset was purchased for $600,000, has a salvage value of $10,000, and has a useful life of 7 years. If the asset is placed in service on September 1 {the company’s fiscal year runs from October 1 to September 30}, what is its sum-of-years depreciation charge for the first year of service? What is the depreciation charge for year two of its useful life using MACRS depreciation and given it is a GDS 3-year property class.
3. A machine tool costs $10,000 and does not have any salvage value. The manufacturer's warranty covers the maintenance and repair cost for the first year. The maintenance and repair costs for the second year will be $1,000 and will increase for $500 for the subsequent years. The operating costs for the first year will be $400 and will increase for $400 for the subsequent years. Consider an analysis period of 8 years and interest rate of 9%, and find...
7. (10 points) A new production machine costs $120,000 and will have a $10,000 salvage value when disposed of in ten years. Annual repair costs are expected to be $0 in years 1, 2, 3 and 4, $5000 in year 5, $5500 in year 6, $6000 in year 7, $6500 in year 8, $7000 in year 9, and $7500 in year 10. If interest is 10%, what is the equivalent uniform annual cost of the new machine?
3. Calculate the depreciation in year 5 for an investment of $10,000, with a salvage value of $2000 and a 10 year life under the following 4 methods: (5 points) Straight Line (5 points) Double declining balance (5 points) Sum of years digits (5 points) MACRS (7 year recovery period)
. A dump truck is purchased for $110,000 and has an estimated salvage value of $10,000 at the end of the recovery period. Prepare a depreciation schedule for the dump truck with a recovery period of five years using: a) the straight-line method b) the sum-of-the-years method c) the declining-balance method
Depreciation Methods A delivery truck costing $24,000 is expected to have a $2,000 salvage value at the end of its useful life of four years or 125,000 miles. Assume that the truck was purchased on January 2. Calculate the depreciation expense for the second year using each of the following depreciation methods: (a) straight-line, (b) double-declining balance, and (c) units of production (Assume that the truck was driven 28,000 miles in the second year.) Round all answers to the nearest...
Chapter 11 3. Equipment bought at cost of $25,000 is being considered for depreciation accounting using either the SOYD (sum-of-years-digit method) or SL (straight-line) method. If this asset will be depreciated over a period of 5 years with a salvage value of $5,000, determine the percentage increase in depreciation charges in year 2 for the SOYD method over the SL method. A. 10% B. 33% C. 0% D. -33.33% 4. Given: Initial cost, B = $120,000 Salvage value, S =...
Depreciation Methods A delivery truck costing $22.000 is expected to have a $2,000 salvage value at the end of its useful life of four years or 100,000 miles. Assume that the truck was purchased on January 2. Calculate the depreciation expense for the second year using each of the following depreciation methods: (a) straight-line, (b) double-declining balance, and (c) units-of- production. (Assume that the truck was driven 30,000 miles in the second year.) Round all answers to the nearest dollar....