A new office building has been constructed at a cost of $3,000,000. It is estimated to...

A new office building has been constructed at a cost of $3,000,000. It is estimated to have a life of 50 years with a value at that time of $200,000. It will have maintenance costs of $10,000 per year. It will also have major repairs costing $80,000 that occur at years 10, 20, 30 and 40. It will have additional repairs at the end of year 25 costing $250,000. Determine the equivalent uniform annual cost if the rate of interest of the firm is 7%

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ekkarill92 answered 1 year ago

A new office building has been constructed at a cost of $3,000,000. It is estimated to...

A new office building has been constructed at a cost of $3,000,000. It is estimated to have a life of 50 years with a value at that time of $200,000. It will have maintenance costs of $10,000 per year. It will also have major repairs costing $80,000 that occur at years 10, 20, 30 and 40. It will have additional repairs at the end of year 25 costing $250,000. Determine the equivalent uniform annual cost if the rate of interest...

Suppose an office building is constructed for an owner. The punch list items are addressed, and...

Suppose an office building is constructed for an owner. The punch list items are addressed, and the project is accepted by the owner. Three months later during the winter season, the owner noticed that the roof developed a small leak and that the leaking water caused discoloration of several suspended ceiling tiles. The main cause of the leakage is an issue in the roof installation and structure that was not readialy observable during final inspection carried out by the owner’s...

A building with a cost of $225,000 has an estimated residual value of $45,000, has an...

A building with a cost of $225,000 has an estimated residual value of $45,000, has an estimated useful life of 9 years, and is depreciated by the straight-line method. a. What is the amount of the annual depreciation? $ b. What is the book value at the end of the fifth year of use? $ c. If at the start of the sixth year it is estimated that the remaining life is 5 years and that the residual value is...

Jenny constructed a building for use as a residential rental property. The cost of the building...

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Novak Company constructed a building at a cost of $2,684,000 and occupied it beginning in January...

Novak Company constructed a building at a cost of $2,684,000 and occupied it beginning in January 1998. It was estimated at that time that its life would be 40 years, with no salvage value. In January 2018, a new roof was installed at a cost of $366,000, and it was estimated then that the building would have a useful life of 25 years from that date. The cost of the old roof was $195,200. 1) What entry should be made...

Greg Maddox Company constructed a building at a cost of $2,200,000 and occupied it beginning in...

Greg Maddox Company constructed a building at a cost of $2,200,000 and occupied it beginning in January 2001. It was estimated at that time that its life would be 40 years, with no salvage value. In January 2021, a new roof was installed at a cost of $300,000, and it was estimated then that the building would have a useful life of 25 years from that date. The cost of the old roof was $160,000. Instructions a. What amount of...

The Abdulla Company purchased a building that cost AED 520,000. The building was estimated to have...

The Abdulla Company purchased a building that cost AED 520,000. The building was estimated to have 20,000 salvage value and 5 years of life. Required: a) (1.5 Marks) Determine depreciation for year 1 and year 2 and record the journal entry using the following methods: Sum of the years digits method Straight line method b) (0.5 Mark) What is the monthly depreciation for each method? Formula: - Sum of the years digits = Step 1 Calculate the Sum...

A larger and more modern main post office is to be constructed at a new location...

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FBR Corporation has just finished minor renovations on their office building at a cost of $150,000....

FBR Corporation has just finished minor renovations on their office building at a cost of $150,000. FBR originally allocated only $100,000 for this renovation. A memo from accounting suggests that the $50,000 cost overrun should be charged to the next new project the company will implement. As its next project, FBR Corp. is considering the acquisition of a new machine that would replace one of their old machines in use. The new machine costs $0.9 million (t=0), and it can...

FBR Corporation has just finished minor renovations on their office building at a cost of $150,000....

FBR Corporation has just finished minor renovations on their office building at a cost of $150,000. FBR originally allocated only $100,000 for this renovation. A memo from accounting suggests that the $50,000 cost overrun should be charged to the next new project the company will implement. As its next project, FBR Corp. is considering the acquisition of a new machine that would replace one of their old machines in use. The new machine costs $0.9 million (t=0), and it can...

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A new office building has been constructed at a cost of $3,000,000. It is estimated to...

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