A machine with a cost of $143,000 and accumulated depreciation of $98,000 is sold for $56,500 cash. The amount that should be rer investing activities is: Multiple Cholce Zero. This is a financing activity. $11,500. Zero. This is an operating activity. $56,500. $45,000.
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- A machine can be purchased at t=0 for $20,000. The estimated life is 15 years, with an estimated salvage value of zero at that time. The average annual operating and maintenance expenses are expected to be $5,500. If MARR =2.54%, what must the average annual revenues be in order to be indifferent between purchasing the machine and doing nothing? $7,120 $3,880 $6,969 @$7,213 $7,175Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $511,000 cost with an expected four-year life and a $19,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Expected annual sales of new product $ 1,930,000 Expected annual costs of new product Direct materials 480,000 Direct labor 673,000 Overhead (excluding straight-line depreciation on new machine) 335,000 Selling and administrative expenses 163,000 Income taxes 40 % Required:1. Compute straight-line depreciation for each year of this new machine’s life.2. Determine expected net income and net cash flow for each year of this machine’s life.3. Compute this machine’s payback period,…KRP Company is considering a project that requires a machine. Cost of the machine is $250,000. Initial investment in net working capital is $55,500. Company spent amount of $4,200 to do analysis on this project to know the market status and paid $5,300 to get some information which is required to work on this project. What is the cash flow in Year 0 for this project? а. $250,000 b. $55,500 с. $315,000 d. $305,500
- A financial manager has to make a decision to replace or not an existing machine on his production line . The following information is providedsalvage value from the old machine : $ 50,000purchase value of the new machine : $ 1,000,000cost savings : $ 500,000cost of capital : 9 Should the manager replace the machine?A Machine costs ₱80,000 and an estimated life of 10 years with a salvage value of ₱5,000. What is the book value after 5 years using the following methodology? a. Straight Line Method. BV5=₱42,500 b. Sinking Fund Method if i=9%. BV5=₱50,456.44 c. Declining Balance Method if the depreciation cost is equal to the value of i. BV5=₱49,922.57 d. Double Declining Balance Method. BV5=₱26,214.40 e. Sum of the Years Digit Method. BV5=₱25,454.5 f. Service-Output Method. Assuming that the total service of the machine is 1,497,600 hours and the number of working days per year is 260 days. What is the book value after 4 years if the machine production time a is 24 hours? BV4=₱79,687.38Required information [The following information applies to the questions displayed below.] Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company requires a 3% return from its investments. Initial investment Net cash flows: Year 1 Year 2 Year B Year 1 Year 2 Year 3 Totals Initial investment Net present value Compute this machine's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.) Net Cash Flow LUD $ $ (230,000) 0 190,000 96,000 123,000 Present Value Present Value of Net Factor Cash Flows $ 09 0 0
- Suppose that ABC Ltd is considering purchasing one of three new processing machines. Either machine would make it possible for the company to produce its products more efficiently. Estimates regarding each machine are provided below: Machine A $79,000 7 years Machine B $110,000 8 years Machine C Original cost Estimated life Salvage value $244,000 10 years $30,000 $58,500 $18,500 Nil Nil $ 60,000 $ 35,000 Estimated annual cash inflows $30,000 Estimated annual cash outflows $ 7,000 If the projects cannot be repeated, which machine should ABC Ltd choose based on the NPV criteria at an 8% cost of capital?Required information [The following information applies to the questions displayed below.] Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company requires a 6% return from its investments. Initial investment Net cash flows: Year 1 Year 2 Year 3 Compute this machine's net present value. (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.) Year 1 Year 2 Year 3 Totals Initial investment Net present value $ (360,000) 190,000 138,000 113,000 Net Cash Flow $ 0 Present Value Factor Present Value of Net Cash Flows $ $ 0 0Delaney Company is considering replacing equipment which originally cost $508,000 and which has $355,600 accumulated depreciation to date. A new machine will cost $727,000. What is the sunk cost in this situation? a.$152,400 b.$574,600 c.$508,000 d.$121,920
- 1. Use the information below for the next two questions. Leaky Pipe Inc. is considering a new machine for its largest product line. The cash flows Lastalled Purchase Price S40, 000 Roduced Cost of Materials S 6,000 per year Labor Savings S9, 000 per year locrease in Working Capital $5, 000 (for Year 0 and I only) Depreciable Life (zero salvage value) 4 years Economic Life 8 years Required Return 12% Tax Rate 40% a . What is the NPV of this machine if it does not replace any other?. b. Suppose the machine replaces another machine with the following characteristics: Book Value of Old Machine $6.000 Market Value of Old Machine $4,000 Remaining Depreciable Life of Old Machine 6years Assume the old machine was not expected to have any salvage value and compute the NPV of the New Machine.Delaney Company is considering replacing equipment that originally cost $600,000 and has accumulated depreciation of $420,000 to date. A new machine will cost $790,000 and the old equipment can be sold for $8,000. The sunk cost in this situation is a.$290,000 b.$188,000 c.$180,000 d.$172,000In order to carry a new investment project, company A has to purchase a machine for OMR 400,000. Company A staff have enough capacity to carry out the production, no one new will need to be hired, they are currently paid OMR 20,000. Calculate the relevant cost? a. OMR 20,000 Ob. OMR 380,000 O c. OMR 400,000 d. OMR 420,000