A manufacturer purchased $15,000 worth of equipment with a useful life of six years.

A manufacturer purchased $15,000 worth of equipment with a useful life of six years. Assuming 9% interest, the equivalent uniform annual cost of the equipment is _________.

Expert Solution

The equivalent uniform annual cost is computed as follows:

= Price of equipment / Present value annuity factor of 9% of 6 years

Present value annuity factor of 9% of 6 years is computed as follows:

= [ (1 – 1 / (1 + r)ⁿ) / r ]

= [ (1 - 1 / (1 + 0.09)⁶ ) / 0.09 ]

= 4.48591859

So, the amount will be as follows:

= $ 15,000 / 4.48591859

= $ 3,343.80 Approximately

jeff jeffy answered 2 years ago

a) A Company purchased equipment for RO 50,000 with an estimated useful life of 20 years....

a) A Company purchased equipment for RO 50,000 with an estimated useful life of 20 years. At the end of the 10 year, company determined that the equipment would last only 5 more years. Does this revision affect depreciation calculated previously? Yes or no, justify your answer. b) You are required to calculate the rate of depreciation and the depreciation to be charged at the end of each year by using reducing balance method for 4 years. Life of the...

A manufacturer offers a $50,000 computer hardware equipment with a useful life of 6 years under...

A manufacturer offers a $50,000 computer hardware equipment with a useful life of 6 years under either a financial lease requiring annual lease payments of $13,000 or under an operating lease with annual lease payments of $16,000. The CCA rate is 25% on the declining balance, the tax rate is 40% and the interest rate on a 6-year term loan is 15%. How long at a minimum must the useful life of the equipment be in order for the financial...

A Company purchased equipment on December 1, 2017 for $7,200 with a 2 years useful life....

A Company purchased equipment on December 1, 2017 for $7,200 with a 2 years useful life. On March 1, 2019, the company decided to dispose the equipment. The equipment is depreciated under the straight-line method Find : Annual depreciation expense Depreciation expense of the year 2017 Depreciation expense of the year 2018 Depreciation expense of the year 2019 Accumulated Depreciation at the disposal date Book value at the disposal date: * Assume that the equipment was sold for $2,100, what...

A Company purchased equipment on November 1, 2017 for $7,200 with a 2 years useful life....

A Company purchased equipment on November 1, 2017 for $7,200 with a 2 years useful life. On March 31, 2019, the company decided to dispose the equipment. The equipment is depreciated under the straight-line method. Compute the equipment’s: Annual depreciation expense: * a-$1,200 b-$2,100 c-$3,600 d-$6,300 e-None of the above Depreciation expense of the year 2017: * a-$300 b-$600 c-$900 d-$1,200 e-None of the above Depreciation expense of the year 2018: * a-$300 b-$600 c-$900 d-$1,200 e-None of the above...

BCK company purchased new equipment with an estimated useful life of four years. The cost of...

BCK company purchased new equipment with an estimated useful life of four years. The cost of the equipment was $50,000, and the salvage value was estimated to be $5,000 at the end of four years. The company uses the double-declining-balance method for book depreciation. (i) What is the amount of depreciation for the fourth year of use? (ii) What is the book value of the asset at the end of the third year?

the equipment is expected to have a 4-year useful life, and be worth about $9,000 at...

the equipment is expected to have a 4-year useful life, and be worth about $9,000 at the end of 4 years..at a cost of 37,800

Q12) A company has purchased an equipment costing $84,300. The equipment has a useful life of...

Q12) A company has purchased an equipment costing $84,300. The equipment has a useful life of 3 years with a salvage value of $34,100. CCA will be taken using a rate of 30.00%. The tax rate is 29.00%, while the discount rate is 9.00%. Assuming the company takes all available CCA every year and there will be some assets remaining in the CCA class after year 3, what is the EAC of this equipment? 16,741 17,194 17,646 18,099 18,551

A company purchased equipment for $110,000 that is expected to have a useful life of 5...

A company purchased equipment for $110,000 that is expected to have a useful life of 5 years and a salvage value of $10,000. If double declining balance depreciation is used, what is the accumulated depreciation at the end of Year 2? $74,000 $60,000 $70,400

A company purchased equipment for $100,000 that is expected to have a useful life of 10...

A company purchased equipment for $100,000 that is expected to have a useful life of 10 years and no salvage value. The company sold the equipment at the end of the fourth year of its useful life, at which point it had fair market value of $65,000. If the asset was sold for $55,000 and was being depreciated using the straight line method as was reported at book value, what amount of gain or loss would be reported at the...

A firm purchases equipment for $19,000,000. The equipment has a useful life of 11 years and...

A firm purchases equipment for $19,000,000. The equipment has a useful life of 11 years and a salvage value of $3,454,545 at the end of the project's life of 11 years. The tax rate is 38%. What is the equipment's after-tax salvage value? $1,312,727 $4,110,909 $2,141,818 $0

Question