An equipment costs Php 2,329,961. At the end of its economic
life of 17 years, its...
An equipment costs Php 2,329,961. At the end of its economic
life of 17 years, its salvage value is Php 60,758. Using Sum of the
Years Digit Method of Depreciation, what will be its depreciation
charge for year 8? MANUAL SOLUTIONS
A machine costs Php 332,631 with a salvage value of Php 44,647
at the end of its life of 11 years. If money is worth 5% annually,
use Sinking Fund Method and determine the depreciation at the 2th
year. MANUAL SOLUTION PLEASE
Your company purchased
new equipment. The old equipment is at the end of its life. The new
equipment cost $140,000 and has a five-year useful life, with an
estimated value of $57,000 after five years. It will be
straight-line depreciated to zero. Sales will increase to $47,000
per year and costs will average 38% of sales. Inventory will
increase by $4,000 due to increased sales. Your firm’s marginal tax
rate is 28%. The discount rate is 9%. What is the...
Your company purchased new equipment. The old equipment is at
the end of its life. The new equipment cost $140,000 and has a
five-year useful life, with an estimated value of $57,000 after
five years. It will be depreciated using a 5-year MACRS schedule.
Sales will increase to $47,000 per year and costs will average 38%
of sales. Inventory will increase by $4,000 due to increased sales.
Your firm’s marginal tax rate is 28%. The discount rate is 9%. What...
What is the NPV of the project? Project life: 3 years Equipment:
Cost: $18,000 Economic life: 3 years Salvage value: $4,000 Initial
investment in net working capital: $2,000 Revenue: $13,000 in year
1, with a nominal growth rate of 5% per year Fixed cost: $3,000 in
year 1 Variable cost: 30% of revenue Corporate tax rate (T): 40%
WACC for the project: 10% This project does not create incidental
effect.
Milson Services purchased an equipment with $1.8 million. The
equipment has 6 years of economic life. How much are the annual
depreciation costs (using straight - line method and using MACRS
mehtod)? MACRS annual tax allowance percentage are:
20%,32%,19%,12%,11%,6%. If the tax rate is 40%, how much are annual
tax savings using each method? What is present value of the tax
saving under each approach?
(HINT: use 10% Interest Rate)
(For finding the Present Value Please explain how you found...
CHL Corporation manufactures specialty equipment with an
estimated economic life of 12 years and leases it to Provincial
Airlines Corp. for a period of 10 years. Both CHL and Provincial
Airlines follow ASPE. The equipment’s normal selling price is
$210,482 and its unguaranteed residual value at the end of the
lease term is estimated to be $15,000. Provincial Airlines will
make annual payments of $25,000 at the beginning of each year and
pay for all maintenance and insurance. CHL incurred...
On January 1, 2016, Ballieu Company leases specialty equipment
with an economic life of 8 years to Anderson Company. The lease
contains the following terms and provisions:
•
The lease is noncancelable and has a term of 8 years.
•
The annual rentals are $34,500, payable at the beginning of
each year.
•
The interest rate implicit in the lease is 11%.
•
Anderson agrees to pay all executory costs and is given an
option to buy the equipment for...
On January 1, 2016, Ballieu Company leases specialty equipment
with an economic life of 8 years to Anderson Company. The lease
contains the following terms and provisions:
•
The lease is noncancelable and has
a term of 8 years.
•
The annual rentals are $40,500,
payable at the beginning of each year.
•
The interest rate implicit in the
lease is 13%.
•
Anderson agrees to pay all
executory costs and is given an option to buy the equipment for...
On January 1, 2016, Ballieu Company leases specialty equipment
with an economic life of 8 years to Anderson Company. The lease
contains the following terms and provisions: • The lease is
noncancelable and has a term of 8 years. • The annual rentals are
$40,500, payable at the beginning of each year. • The interest rate
implicit in the lease is 13%. • Anderson agrees to pay all
executory costs and is given an option to buy the equipment for...
On January 1, 2016, Ballieu Company leases specialty equipment
with an economic life of 8 years to Anderson Company. The lease
contains the following terms and provisions: • The lease is
noncancelable and has a term of 8 years. • The annual rentals are
$34,500, payable at the beginning of each year. • The interest rate
implicit in the lease is 11%. • Anderson agrees to pay all
executory costs and is given an option to buy the equipment for...