RED company is considering investing $30,000 in machine that is expected to have a useful life...
RED company is considering investing $30,000 in machine that is
expected to have a useful life of five years and is expected to
reduce (save) the firm’s labor costs by $3,850 per year. It is
believed that $7,000 can be obtained when the equipment is disposed
at the end of year five. Assume that declining balance 200%
depreciation method is used.
a. What are the depreciation deduction amounts for years 1 through
5?
b. What is the BV of the asset after 5 years?
Homework Answers
Part a)
| year | depreciation | book value |
| 0 | 30000 | |
| 1 | 12000 | 18000 |
| 2 | 7200 | 10800 |
| 3 | 4320 | 6480 |
| 4 | 2592 | 3888 |
| 5 | 1555.2 | 2332.8 |
Part b)
book value of asset afyer 5 years is $ 2332.8
Add Answer to:
RED company is considering investing $30,000 in machine that is
expected to have a useful life...
Ajax is considering investing in a new machine that costs $30,000. It is expected that the...
Ajax is considering investing in a new machine that costs $30,000. It is expected that the new machine will save $11,000 a year in operating costs over the next 6 years. Determine the Net Present Value of this investment if the company's required rate of return is 14%.
You have a tax basis of $90,000 and a useful life of five years and no...
You have a tax basis of $90,000 and a useful life of five years and no salvage value. Provide a depreciation schedule (d, for k=1-5) for 150% declining balance with switchover to straight line. Specify the year to switchover. Determine the depreciation amounts using the 150% declining balance and straight-line methods and BV amounts for each year. (Round to the nearest dollar.) Year 150% DB Method, $ SL Method, $ Depreciation Amount Selected, $ BV: $ 1 0 0 0...
A firm is considering investing $15 million in machinery equipment that is expected to have a...
A firm is considering investing $15 million in machinery equipment that is expected to have a useful life of five years and is expected to reduce the firm's labor costs by $5 million per year. Assume the firm pays a 30% tax rate on accounting profits and uses the straight-line depreciation method. What is the after-tax cash flow from the investment in years 1 through 5? If the hurdle rate for this investment is 15% per year, is it worthwhile?...
You have a tax basis of $80,000 and a useful life of five years and no...
You have a tax basis of $80,000 and a useful life of five years and no salvage value. Provide a depreciation schedule (dk for k=1-5) for 200% declining balance with switchover to straight line. Specify the year to switchover. Determine the depreciation amounts using the 200% declining balance and straight-line methods and BV amounts for each year. (Round to the nearest dollar.) 200% DB Method, $ Depreciation SL Method, $ Amount Selected, Year BVk; $
Builtrite A is considering replacing a 10 year old machine that originally cost $30,000, has a...
Builtrite A is considering replacing a 10 year old machine that originally cost $30,000, has a current book value of $10,000 with five years of expected life left. The machine is being depreciated over its 15 year life down to a terminal value of $0. Currently, this machine has an expected salvage value of $15,000. The replacement machine that Builtrite is considering would cost $80,000 and be depreciated down to $0 over its five year expected life. At the end...
On January 1, a machine with a useful life of five years and a residual value...
On January 1, a machine with a useful life of five years and a residual value of $30,000 was purchased for $90,000. What is the depreciation expense for year 1 under the double-declining-balance method of depreciation?
Hanex limited is considering investing $50,000/- in a new machine with an expected life life of 5...
hanex limited is considering investing $50,000/- in a new machine with an expected life life of 5 years. the machine will have no scrap value at the end of five years.it is expected that 2000 units will be sold each year at a selling price of $3.00 per unit, variables production cots are expected to be $1.65 per unit, while incremental fixed cost, mainly the wages of maintenance engineer are expected to be $10.000/- per year. Hanex limited uses a...
Ajax is considering investing in a new machine that costs $40,000. It is expected that the...
Ajax is considering investing in a new machine that costs $40,000. It is expected that the new machine will save $8,000 a year in operating costs over the next 6 years. Determine the Net Present Value of this investment if the company's required rate of return is 14%.
8. A company purchased a machine for $190.000. The machine has a useful life of 8...
8. A company purchased a machine for $190.000. The machine has a useful life of 8 produce 750,000 units over its useful life. Determine depreciation expense when output is 109,000 units A. $25,200. 8. $26,160 С. $ 26,660. D. $27,613. E. $53,160 years, a residual value of $10,000, and can deprecilation method in which a plant asset's depreciation depreciation rate to the asset's beginning-of-period book value is called A. Book value depreciation B. Declining-balance depreciation. C. Straight-ine depreciation. D. Units-of-production...
Torge Company bought a machine for $99,000 cash. The estimated useful life was five years and...
Torge Company bought a machine for $99,000 cash. The estimated useful life was five years and the estimated residual value was $6,000. Assume that the estimated useful life in productive units is 201,000. Units actually produced were 53,600 in year 1 and 60,300 in year 2 Required: 1. Determine the appropriate amounts to complete the following schedule. (Do not round intermediate calculations.) Depreciation Expense for Book Value at the End of Method of Depreciation Year 2 Year 2 Year 1...
Ajax is considering investing in a new machine that costs $30,000. It is expected that the new machine will save $11,000 a year in operating costs over the next 6 years. Determine the Net Present Value of this investment if the company's required rate of return is 14%.
You have a tax basis of $90,000 and a useful life of five years and no salvage value. Provide a depreciation schedule (d, for k=1-5) for 150% declining balance with switchover to straight line. Specify the year to switchover. Determine the depreciation amounts using the 150% declining balance and straight-line methods and BV amounts for each year. (Round to the nearest dollar.) Year 150% DB Method, $ SL Method, $ Depreciation Amount Selected, $ BV: $ 1 0 0 0...
You have a tax basis of $80,000 and a useful life of five years and no salvage value. Provide a depreciation schedule (dk for k=1-5) for 200% declining balance with switchover to straight line. Specify the year to switchover. Determine the depreciation amounts using the 200% declining balance and straight-line methods and BV amounts for each year. (Round to the nearest dollar.) 200% DB Method, $ Depreciation SL Method, $ Amount Selected, Year BVk; $
Ajax is considering investing in a new machine that costs $40,000. It is expected that the new machine will save $8,000 a year in operating costs over the next 6 years. Determine the Net Present Value of this investment if the company's required rate of return is 14%.
8. A company purchased a machine for $190.000. The machine has a useful life of 8 produce 750,000 units over its useful life. Determine depreciation expense when output is 109,000 units A. $25,200. 8. $26,160 С. $ 26,660. D. $27,613. E. $53,160 years, a residual value of $10,000, and can deprecilation method in which a plant asset's depreciation depreciation rate to the asset's beginning-of-period book value is called A. Book value depreciation B. Declining-balance depreciation. C. Straight-ine depreciation. D. Units-of-production...
Torge Company bought a machine for $99,000 cash. The estimated useful life was five years and the estimated residual value was $6,000. Assume that the estimated useful life in productive units is 201,000. Units actually produced were 53,600 in year 1 and 60,300 in year 2 Required: 1. Determine the appropriate amounts to complete the following schedule. (Do not round intermediate calculations.) Depreciation Expense for Book Value at the End of Method of Depreciation Year 2 Year 2 Year 1...
Most questions answered within 3 hours.
-
A student studying for a vocabulary test knows the meanings of
16 words from a list...
asked 28 minutes ago -
List the most common organic functional groups that function as
acids or bases. Write an equation...
asked 9 minutes ago -
1) A protein is 435 amino acids long, which of the genes below
COULD NOT code...
asked 11 minutes ago -
What do the phenomena of overshadowing, the CS preexposure
effect, and relative validity of cues have...
asked 39 minutes ago -
Assuming air has a density of 1.17 g/L and .973 atm what is the
average molar...
asked 33 minutes ago -
Developmental Biology! Please answer all the questions
7) Mislocalization of oscar to the side of the...
asked 26 minutes ago -
We have two Earths, one as ours and another that is twice
heavier than that of...
asked 35 minutes ago -
At an annual interest rate of 6%, which would you prefer; three
annual year-end cash flows...
asked 34 minutes ago -
1. (40’) In myStack.cpp, implement the member functions of the
class myStack, which is the class...
asked 35 minutes ago -
MnO4^- + C2O4^2- ---->MnO2 +CO3^2- balance in basic media
asked 53 minutes ago -
What is the missing keyword in the program below?
public class Batman {
public static int...
asked 50 minutes ago -
The Southern Oscillation can be best described
as
relative changes between two pressure systems.
variation in...
asked 51 minutes ago