Question

In: Operations Management

(8 pts.) You have just added a new crawler dozer for your equipment fleet. This crawler...

  1. (8 pts.) You have just added a new crawler dozer for your equipment fleet. This crawler dozer costs $550,000 and has an estimated service life of 5 years. Its salvage value is $75,000.

  1. Calculate the depreciation and book value for the end of the first and second years using the straight-line and Double-Declining Balance (DDB) method. (Hint: the effective rate of DDB is twice of the straight-line rate for new equipment and 150% for used equipment).
  1. What cost per hour of operation would you estimate to cover the interest, tax and insurance if the IIT is 15% and the annual operation time is 2000 hours.

Solutions

Expert Solution

keosha answered 2 months ago
Next > < Previous

Related Solutions

You have just begun a new stage in your career—you have been hired to be the...
You have just begun a new stage in your career—you have been hired to be the Human Resources (HR) Manager for Berkley Innovative Technologies. Upon meeting the CEO, she described how the company’s workforce demographics have changed substantially over the past two decades. Previous HR managers, along with many supervisors, have mostly been Caucasian males ranging in age between 50s and early 60s, and typically from a Judeo-Christian background. The CEO also indicated that workplace strife has been steadily increasing,...
You have just started a new job and are thrilled to learn that your new employer...
You have just started a new job and are thrilled to learn that your new employer offers a 401(k) retirement plan to its employees. Your annual salary is $40,000. Assume the IRS allows you to contribute up to $24,000 to your 401(k). You’ve decided to contribute 7% of your annual salary to the plan. Questions: How much more money would you need to contribute to meet the maximum allowable contribution set forth by the IRS? The company offers you a...
You have just purchased a piece of new equipment and must determine what testing to perform...
You have just purchased a piece of new equipment and must determine what testing to perform in-house and what testing to send to a reference laboratory.
You have just joined a company as a new staff accountant. Your company is in an...
You have just joined a company as a new staff accountant. Your company is in an acquisition mode (acquiring 5 to 10 smaller companies each of the last 4 years). You are excited to hear that you are going with an acquisition team to facilitate another acquisition (Company X). You have been instructed to sit down with Company X’s controller and explain some pre-acquisition (before the acquisition is finalized) accounting expectations. Expectations for Company X before the acquisition is finalized....
4. (5 pts) You have purchased a piece of depreciable equipment and have decided to use...
4. (5 pts) You have purchased a piece of depreciable equipment and have decided to use the double declining-balance depreciation method for depreciation charges. Use the following table to conduct and determine: a. Annual depreciation and annual book value through the useful life of the equipment. b. Determine the value of the capital gain or loss. Cost Basis: $100,000 Market Value: $10,000 Useful Life: 5 years MARR: 5%
A company has just invested in a fleet of 12 new delivery trucks. They are identical...
A company has just invested in a fleet of 12 new delivery trucks. They are identical in terms of features, capability, and price. The companies operation involves deliveries to long haul' destinations, and 'short haul' destinations. The company assumes each truck to have a useful life of 5 years. Experience has shown that the 'long haul' trucks typically develop problems, or wear out, twice as fast as the 'short haul' trucks, primarily due to the significantly higher number of miles...
You have just started a new job and your employer has enrolled you in KiwiSaver. This...
You have just started a new job and your employer has enrolled you in KiwiSaver. This is the first time you have been enrolled in KiwiSaver and you decide not to “opt out”. You are interested in estimating how much your KiwiSaver fund could be worth when you retire. You make the following assumptions: • You have just turned 30 and will retire in exactly 35 years when you are 65. • Your salary is $50,000 this year and you...
You have just started a new job and your employer has enrolled you in KiwiSaver. This...
You have just started a new job and your employer has enrolled you in KiwiSaver. This is the first time you have been enrolled in KiwiSaver and you decide not to “opt out”. You are interested in estimating how much your KiwiSaver fund could be worth when you retire. You make the following assumptions: • You have just turned 30 and will retire in exactly 35 years when you are 65. • Your salary is $50,000 this year and you...
You have just started a new job and your employer has enrolled you in KiwiSaver. This...
You have just started a new job and your employer has enrolled you in KiwiSaver. This is the first time you have been enrolled in KiwiSaver and you decide not to “opt out”. You are interested in estimating how much your KiwiSaver fund could be worth when you retire. You make the following assumptions: • You have just turned 30 and will retire in exactly 35 years when you are 65. • Your salary is $50,000 this year and you...
You have just started a new job and your employer has enrolled you in KiwiSaver. This...
You have just started a new job and your employer has enrolled you in KiwiSaver. This is the first time you have been enrolled in KiwiSaver and you decide not to “opt out”. You are interested in estimating how much your KiwiSaver fund could be worth when you retire. You make the following assumptions: • You have just turned 30 and will retire in exactly 35 years when you are 65. • Your salary is $50,000 this year and you...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT