What is the average amount invested in a machine during its predicted five-year life if it costs $200,000 and has a $20,000 salvage value? Assume that net income is received evenly throughout each year and straight-line depreciation is used.
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What is the average amount invested in a machine during its
predicted five-year life if it costs $200,000 and has a $20,000
salvage value? Assume that net income is received evenly
throughout each year and straight-line depreciation is used.
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- A machine costs $600,000 and is expected to yield an after-tax net income of $23,000 each year. Management predicts this machine has a 9-year service life and a $120,000 salvage value, and it uses straight-line depreciation. Compute this machine's accounting rate of return. Accounting Rate of Return Choose Numerator: Choose Denominator: Accounting Rate of Return Accounting rate of returnA machine has a first cost of $10,000 and an expected salvage value of $900 when it is sold. Annually, the operating cost is $500, and the revenue generated from sales is $2,500. What is the payback period assuming a MARR of 20% per year, an effective tax rate of 15%, and straight line depreciation over 5 years taking into account the salvage value (note, even though the machine might be fully depreciated down to its salvage value for tax purposes, assume the machine can continue to operate forever and that it will never be sold).A machine costs $700,000 and is expected to yield an after-tax net income of $52,000 each year. Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses straight-line depreciation. Compute this machine’s accounting rate of return.
- A machine whose value is ($36,200), its saving value is $4,300, and its life span is ten years. Calculate the depreciation load, the recorded value, and the unhedged capital returns in each year of the life of this machine, knowing that the expected profit from it is (69%) annuallyUse the following information to evaluate a new project to purchase an equipment. The new equipment has a 5-year economic life, and it will be depreciated by the straight-line method. Revenues and other operating costs are expected to be constant over the project's life. What is the project's Year 5 cash flow? Equipment cost Shipping and installation cost Investment in net operating working capital Salvage value Sales revenue, each year Operating costs (excluding depreciation) Tax rate Select one: O a. $90,120 O b. $81,200 O c. $79,250 O d. $83,600 $110,000 $10,000 $40,000 $20,000 $50,000 $24,000 40%An automation asset with a high first cost of $10 million has a capital recovery (CR) of $1,985,000 per year. The correct interpretation of this CRvalue is that:a. the owner must pay an additional $1,985,000 each year to retain the asset.b. each year of its expected life, a net revenue of $1,985,000 must be realized to recover the $10 million first cost and the required rate ofreturn on this investment.c. each year of its expected life, a net revenue of $1,985,000 must be realized to recover the $10 million first cost.d. the services provided by the asset will stop if less than $1,985,000 in net revenue is reported in any year.
- A machine costs $600,000 and is expected to yield an after-tax net income of $23,000 each year. Management predicts this machine has a 12-year service life and a $120,000 salvage value, and it uses straight-line depreciation. Compute this machine's accounting rate of return. Choose Numerator: 1 7 Accounting Rate of Return Choose Denominator:Consider a capital expenditure project that has forecasted revenues equal to $32,000 per year; cash expenses are estimated to be $29,000 per year. The cost of the project equipment is $23,000, and the equipment’s estimated salvage value at the end of the project is $9,000. The equipment’s $23,000 cost will be depreciated on a straight-line basis to $0 over a 10-year estimated economic life. Assume that the project requires an initial $7,000 working capital investment. The company’s marginal tax rate is 30%. Calculate the project’s net present value using a 12% discount rate.An asset which has a first cost of RM 40,000 is expected to have an annual operating cost of RM 15,000 per year. It will provide the needed service for a maximum of 6 years. If the salvage value changes as shown below , determine the economic life of the asset at 20 % per year.
- Assume that a company buys a new machine for $220,000 that has a useful life of five years and a $20,000 salvage value. The new machine will replace an old machine that can be sold for a salvage value of $10,000. The machine will generate incremental contribution margin of $42,000 per year. The only fixed expense associated with the new machine is its annual depreciation of $40,000 per year. What is the payback period for this investment? Multiple Choice 5.0 years 12.0 years 5.167 years 11.0 yearsIf an asset costs $240,000 and is expected to have a $40,000 salvage value at the end of its ten-year life, and generates annual net cash inflows of $40,000 each year, the cash payback period isProject A requires a $280,000 initial investment for new machinery with a five-year life and a salvage value of $30,000. The company uses straight-line depreciation. Project A is expected to yield annual net income of $20,000 per year for the next five years. Compute Project A’s accounting rate of return. Express your answer as a percentage, rounded to two decimal places.