Question
In: Accounting
Consider the purchase of a new farm truck (automobile). The specific information is: Total Purchase cost...
- Consider the purchase of a new farm truck (automobile). The specific information is:
Total Purchase cost = $150,000.00 Purchase date = Jan 1, 2020
Useful life = 6 years Salvage value = $50,000.00
Note: each highlighted box is worth 1 point
Complete each depreciation table.
ECONOMIC DEPRECIATION:
- Fill in the table using the straight-line depreciation method for economic depreciation. (5 points)
|
Year |
Remaining value at beginning of year |
Depreciation |
Remaining value at end of year |
|
2020 |
|||
|
2021 |
|||
|
2022 |
|||
|
2023 |
|||
|
2024 |
|||
|
2025 |
- Fill in the table using the straight-line method for economic depreciation as if the purchase date was October 1, 2020 (partial year method) (7 points)
|
Year |
Remaining value at beginning of year |
Depreciation |
Remaining value at end of year |
|
Oct 1 - Dec 31, 2020 |
|||
|
2021 |
|||
|
2022 |
|||
|
2023 |
|||
|
2024 |
|||
|
2025 |
|||
|
Jan 1 - Sept 30, 2026 |
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Consider the purchase of a new farm truck (automobile). The specific information is: Total Purchase cost...
Consider the purchase of a new farm truck (automobile).
The specific information is:
Total Purchase cost =
$150,000.00
Purchase date = Jan 1, 2020
Useful life = 6
years
Salvage value = $50,000.00
Note: each highlighted box is worth 1 point
Complete each depreciation table.
ECONOMIC DEPRECIATION:
Fill in the table using the straight-line depreciation
method for economic depreciation. (5 points)
Year
Remaining value at beginning of year
Depreciation
Remaining value at end of year
2020
2021
2022...
Consider the purchase of a new combine. The specific information is:
Consider the purchase of a new
combine. The specific information is:Purchase price = $750,000.00,
Purchase date = Jan 1, 2020Useful life =6 years,
Salvage value = $100,000.00 Complete each depreciation table.Note: each highlighted box is worth 1 point – for a total of 10
points possibleFill in the table using the straight-line
methodYearRemaining value at beginning of yearDepreciationRemaining value at end of year202020212022202320242025
Acme Tools is considering the purchase of a new machine. The total cost of the new...
Acme Tools is considering the purchase of a new machine. The
total cost of the new machine is $48,000 and it has a 9-year
service life with no salvage value at the end of nine years. The
annual cash inflow will be 16% of the cost of the machine. If the
appropriate cost of capital is 6.0 percent, what is the discounted
payback period?
A. less than 8.0 years
B. more than 8.0 years but less than 8.3 years
C....
Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected...
Company recently purchased a new delivery truck. The new truck
cost $22,500, and it is expected to generate net after-tax
operating cash flows, including depreciation, of $6,250 per year.
The truck has a 5-year expected life. The expected salvage values
after tax adjustments for the truck are given below. The company's
cost of capital is 12.5 percent.
Year/ Annual Operating Cash Flow/ Salvage Value
0/ $22,500/ $22,500
1/ 6,250/ 17,500
2/ 6,250/ 14,000
3/ 6,250/ 11,000
4/ 6,250/ 5,000
5/...
ABC Company is considering the purchase of a new garbage truck ON 1/1/20. The truck will...
ABC Company is considering the
purchase of a new garbage truck ON 1/1/20. The truck will cost
$40,000 and have useful life of 5 years with a salvage value of $0.
The new truck is much more efficient than the old delivery truck
and should increase the company’s annual cash operating income by
$12,000. Straight-line depreciation will be used. The
income tax rate is 25% and ABC Company’s hurdle rate is 10%.
PRESENT VALUE TABLES ON THE EXAM’S LAST PAGE.
Payback...
Wells Printing is considering the purchase of a new printing press. The total installed cost of...
Wells Printing is considering the purchase of a new printing
press. The total installed cost of the press is $ 2.15 million.
This outlay would be partially offset by the sale of an existing
press. The old press has zero book value, cost $ 1.01 million 10
years ago, and can be sold currently for $ 1.29 million before
taxes. As a result of acquisition of the new press, sales in each
of the next 5 years are expected to...
Wells Printing is considering the purchase of a new printing press. The total installed cost of...
Wells Printing is considering the purchase of a new printing
press. The total installed cost of the press is $2.2 million. This
outlay would be partially offset by the sale of an existing press.
The old press has zero book value, cost $1 million 10 years ago,
and can be sold currently for $1.2 million before taxes. As a
result of acquisition of the new press, sales in each of the next 5
years are expected to be $1.6 million...
1. H Corp recently purchased a new delivery truck. The new truck has a cost of...
1. H Corp recently purchased a new delivery truck. The new truck
has a cost of $56250 and is expected to generate after tax cash
flows including depreciation of $15625 per year. The truck has a
five year expected life. The expected year end abandonment Values
(Salvage Value after tax adjustments) for the truck are given
below. The company’s cost of capital is 11%
Year
Annual operating CF Abandonment Value
0
(56250)
----
1
15,625
43750
2
15,625
35000
3 ...
20. The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $22,500,...
20. The Scampini Supplies Company recently purchased a new
delivery truck. The new truck cost $22,500, and it is expected to
generate net after-tax operating cash flows, including
depreciation, of $6,250 per year. The truck has a 5-year expected
life. The expected salvage values after tax adjustments for the
truck are given below. The company's cost of capital is 6
percent.
Year
Annual Operating Cash Flow
Salvage Value
0
-$22,500
$22,500
1
6,250
17,500
2
6,250
14,000
3
6,250
11,000...
b. Wells Printing is considering the purchase of a new printing press. The total installed cost...
b. Wells Printing is considering the purchase of a new printing
press. The total installed cost of the press is $2.2 million. This
outlay would be partially offset by the sale of an existing press.
The old press has zero book value, cost $1 million 10 years ago,
and can be sold currently for $1.2 million before taxes. As a
result of acquisition of the new press, sales in each of the next 5
years are expected to be $1.6...
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