What is the economic service life of a project? Question 16 options: It is the present...
What is the economic service life of a project?
Question 16 options:
|
It is the present worth of the project after tax considerations have been deducted. |
|
|
It is the same as the cost basis of the project. |
|
|
It is the amount of time an asset should be used such that it has the smallest annual cost of operation. |
|
|
It is the amount of time an asset can operate before it becomes obsolete or fails. |
Homework Answers
Answer:
It is the amount of time an asset can operate before it becomes obsolete or fails.
Explanation:
Economic life of a project is the amount of time an asset remains useful to the owner until it fails. Factors such as the purchasing costs, amount of time in operation and the existing regulations are some of the considerations when calculating economic life.
Add Answer to:
What is the economic service life of a project?
Question 16 options:
It is the present...
What is the economic service life of a project? It is the same as the cost...
What is the economic service life of a project? It is the same as the cost basis of the project. It is the amount of time an asset can operate before it becomes obsolete or fails. It is the present worth of the project after tax considerations have been deducted. It is the amount of time an asset should be used such that it has the smallest annual cost of operation.
Find cost difference between 2 options using net present worth analysis Your company signed a contract...
Find cost difference between 2 options using net present worth
analysis
Your company signed a contract to remove soil from government-owned property. This task requires a specific bulldozer to dig and load the material onto a transportation vehicle. There are two models of ripper-bulldozer to consider: Model Alpha costs $200,000, and two units of model alpha would be required to remove the material within 2 years. Operating cost for each unit would run to $40,000/year for 2000 hours of operation....
P12-16 (similar to) 8 Question Help (Calculating project cash flows and NPV) The Guo Chemical Corporation...
P12-16 (similar to) 8 Question Help (Calculating project cash flows and NPV) The Guo Chemical Corporation is considering the purchase of a chemical analysis machine. The purchase of this machine will result in an increase in earnings before interest and taxes of $90,000 per year. The machine has a purchase price of $300,000, and it would cost an additional $8,000 after tax to install this machine correctly. In addition, to operate this machine properly, inventory must be increased by $20,000....
ABC Company is planning to purchase an equipment. The purchase price of the equipment is $350,000....
ABC Company is planning to purchase an equipment. The purchase price of the equipment is $350,000. The company plans to make a down payment of 25% of the first cost, and for the remainder of the cost of the equipment, they plan to take a loan. The company will pay off this loan in 7 years at 10% in equal annual payments. ABC believes that the equipment can be sold for $75,000 at the end of its 15-year service life....
LO, Inc., is considering an investment of $454,000 in an asset with an economic life of...
LO, Inc., is considering an investment of $454,000 in an asset with an economic life of five years. The firm estimates that the nominal annual cash revenues and expenses at the end of the first year will be $292,100 and $90,800, respectively. Both revenues and expenses will grow thereafter at the annual inflation rate of 4 percent. The company will use the straight-line method to depreciate its asset to zero over five years. The salvage value of the asset is...
P12-16 (similar to) B Question Help (Calculating project cash flows and NPV) The Guo Chemical Corporation...
P12-16 (similar to) B Question Help (Calculating project cash flows and NPV) The Guo Chemical Corporation is considering the purchase of a chemical analysis machine. The purchase of this machine will result in an increase in earnings before interest and taxes of $75,000 per year. The machine has a purchase price of $350,000, and it would cost an additional $5,000 after tax to install this machine correctly. In addition, to operate this machine properly, inventory must be increased by $14,000....
Market Top Investors, Inc., is considering the purchase of a $345,000 computer with an economic life...
Market Top Investors, Inc., is considering the purchase of a $345,000 computer with an economic life of five years. The computer will be fully depreciated over five years using the straight-line method, at which time it will be worth $60,000. The computer will replace two office employees whose combined annual salaries are $86,000. The machine will also immediately lower the firm’s required net working capital by $75,000. This amount of net working capital will need to be replaced once the...
2. Mattice Corporation is considering investing $640,000 in a project. The life of the project would be 6 years. The pr...
2.
Mattice Corporation is considering investing $640,000 in a project. The life of the project would be 6 years. The project would require additional working capital of $24,000, which would be released for use elsewhere at the end of the project. The annual net cash inflows would be $158,000. The salvage value of the assets used in the project would be $34,000. The company uses a discount rate of 18%. (lgnore income taxes.) Click here to view Exhibit 13B-1 and...
P12-16 (similar to) Question Help (Calculating project cash flows and NPV) The Guo Chemical Corporation is...
P12-16 (similar to) Question Help (Calculating project cash flows and NPV) The Guo Chemical Corporation is considering the purchase of a chemical analysis machine. The purchase of this machine will result in an increase in earnings before interest and taxes of $85,000 per year. The machine has a purchase price of $150.000, and it would cost an additional $6.000 fer tax to install this machine correctly. In addition, to operate this machine properly, inventory must be increased by $20,000. This...
It is economic engineering question. Please calculate using net present analysis. Don’t use excel. Write clear...
It
is economic engineering question.
Please calculate using net present analysis. Don’t use excel.
Write clear steps and circle correct answer pleas. Thanks!
Your company needs a new widget injection molder. They are considering two options, as shown in the table below. Initial Cost Annual Benefit Annual O&M Costs Useful Life Option A Option B $8,000 $15,000 $5,500 $7,250 $500 $1,250 2 vears 3 years If the widget molder will be needed for 6 years, and your firm's MARR is...
What is the economic service life of a project? It is the same as the cost basis of the project. It is the amount of time an asset can operate before it becomes obsolete or fails. It is the present worth of the project after tax considerations have been deducted. It is the amount of time an asset should be used such that it has the smallest annual cost of operation.
Find cost difference between 2 options using net present worth
analysis
Your company signed a contract to remove soil from government-owned property. This task requires a specific bulldozer to dig and load the material onto a transportation vehicle. There are two models of ripper-bulldozer to consider: Model Alpha costs $200,000, and two units of model alpha would be required to remove the material within 2 years. Operating cost for each unit would run to $40,000/year for 2000 hours of operation....
P12-16 (similar to) 8 Question Help (Calculating project cash flows and NPV) The Guo Chemical Corporation is considering the purchase of a chemical analysis machine. The purchase of this machine will result in an increase in earnings before interest and taxes of $90,000 per year. The machine has a purchase price of $300,000, and it would cost an additional $8,000 after tax to install this machine correctly. In addition, to operate this machine properly, inventory must be increased by $20,000....
LO, Inc., is considering an investment of $454,000 in an asset with an economic life of five years. The firm estimates that the nominal annual cash revenues and expenses at the end of the first year will be $292,100 and $90,800, respectively. Both revenues and expenses will grow thereafter at the annual inflation rate of 4 percent. The company will use the straight-line method to depreciate its asset to zero over five years. The salvage value of the asset is...
P12-16 (similar to) B Question Help (Calculating project cash flows and NPV) The Guo Chemical Corporation is considering the purchase of a chemical analysis machine. The purchase of this machine will result in an increase in earnings before interest and taxes of $75,000 per year. The machine has a purchase price of $350,000, and it would cost an additional $5,000 after tax to install this machine correctly. In addition, to operate this machine properly, inventory must be increased by $14,000....
2.
Mattice Corporation is considering investing $640,000 in a project. The life of the project would be 6 years. The project would require additional working capital of $24,000, which would be released for use elsewhere at the end of the project. The annual net cash inflows would be $158,000. The salvage value of the assets used in the project would be $34,000. The company uses a discount rate of 18%. (lgnore income taxes.) Click here to view Exhibit 13B-1 and...
P12-16 (similar to) Question Help (Calculating project cash flows and NPV) The Guo Chemical Corporation is considering the purchase of a chemical analysis machine. The purchase of this machine will result in an increase in earnings before interest and taxes of $85,000 per year. The machine has a purchase price of $150.000, and it would cost an additional $6.000 fer tax to install this machine correctly. In addition, to operate this machine properly, inventory must be increased by $20,000. This...
It
is economic engineering question.
Please calculate using net present analysis. Don’t use excel.
Write clear steps and circle correct answer pleas. Thanks!
Your company needs a new widget injection molder. They are considering two options, as shown in the table below. Initial Cost Annual Benefit Annual O&M Costs Useful Life Option A Option B $8,000 $15,000 $5,500 $7,250 $500 $1,250 2 vears 3 years If the widget molder will be needed for 6 years, and your firm's MARR is...
Most questions answered within 3 hours.
-
A long straight wire lies along the x axis carries a current of
15 amps in...
asked 30 seconds ago -
Suppose you work hard building your business and end up earning
zero economic profit for the...
asked 2 minutes ago -
A person whose weight is 516 N is being pulled up vertically by
a rope from...
asked 3 minutes ago -
A sample survey at a supermarket showed that 204 of 300 shoppers
regularly use cents-off coupons....
asked 9 minutes ago -
What is the HDI (Hydrogen Deficiency Index) for acetic acid? How
many sets of non-equivalent protons...
asked 10 minutes ago -
Disease Prevention and Health Promotion-Topic
What are the roles of both the state and federal government...
asked 14 minutes ago -
determine the following probabilites
a. for n= 3 and (pie)π = 0.16, what is P(X=0)?
b....
asked 17 minutes ago -
Why do men earn more money than women in America?
asked 27 minutes ago -
Sales of tablet computers at Ted Glickman's electronics store
in Washington, D.C., over the past 10...
asked 37 minutes ago -
Short essay question:
First, discuss the anatomical differences between Paleocene
pro-primates and Eocene eu-primates and explain...
asked 37 minutes ago -
Suppose we have a binomial experiment in which success is
defined to be a particular quality...
asked 59 minutes ago -
march the type of cellular control with the description: enzyme
induction and the enzyme repression. How...
asked 1 hour ago