Nash Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $ 4,953,300 on January 1, 2017. Nash expected to complete the building by December 31, 2017. Nash has the following debt obligations outstanding during the construction period.

Assume that Nash completed the office and warehouse building on December 31, 2017, as planned at a total cost of $ 5,173,700, and the weighted-average amount of accumulated expenditures was $3,830,300. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to 0 decimal places, e.g. 5,275.)

Compute the depreciation expense for the year ended December 31, 2018. Nash elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of  30 years and a salvage value of $ 297,500. (Round answer to 0 decimal places, e.g. 5,275.)

Riverbed Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $3,000,000 on January 1, 2020. Riverbed expected to complete the building by December 31, 2020. Riverbed has the following debt obligations outstanding during the construction period.

Construction loan-12% interest, payable semiannually, issued December 31, 2019 $1,200,000

Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2021 840,000

Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2024 600,000

1. Assume that Riverbed completed the office and warehouse building on December 31, 2020, as planned at a total cost of $3,120,000, and the weighted-average amount of accumulated expenditures was $2,160,000. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to 0 decimal places, e.g. 5,275.)

Avoidable Interest $

2. Compute the depreciation expense for the year ended December 31, 2021. Riverbed elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $180,000. (Round answer to 0 decimal places, e.g. 5,275.)

Depreciation Expense $

Bramble Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $2,500,000 on January 1, 2020. Bramble expected to complete the building by December 31, 2020. Bramble has the following debt obligations outstanding during the construction period.

Assume that Bramble completed the office and warehouse building on December 31, 2020, as planned at a total cost of $2,600,000, and the weighted-average amount of accumulated expenditures was $1,800,000. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to 0 decimal places, e.g. 5,275.)

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Compute the depreciation expense for the year ended December 31, 2021. Bramble elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $150,000. (Round answer to 0 decimal places, e.g. 5,275.)

Flounder Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $3,000,000 on January 1, 2020. Flounder expected to complete the building by December 31, 2020. Flounder has the following debt obligations outstanding during the construction period.

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Assume that Flounder completed the office and warehouse building on December 31, 2020, as planned at a total cost of $3,120,000, and the weighted-average amount of accumulated expenditures was $2,160,000. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to 0 decimal places, e.g. 5,275.)

Compute the depreciation expense for the year ended December 31, 2021. Flounder elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $180,000. (Round answer to 0 decimal places, e.g. 5,275.)

Teradene Corporation purchased land as a factory site and contracted with Maxtor Construction to construct a factory. Teradene made the following expenditures related to the acquisition of the land, building, and equipment for the factory: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.): Purchase price of the land $ 1,230,000 Demolition and removal of old building 83,000 Clearing and grading the land before construction 165,000 Various closing costs in connection with acquiring the land 45,000 Architect's fee for the plans for the new building 53,000 Payments to Maxtor for building construction 3,280,000 Equipment purchased 875,000 Freight charges on equipment 35,000 Trees, plants, and other landscaping 48,000 Installation of a sprinkler system for the landscaping 5,300 Cost to build special platforms and install wiring for the equipment 15,000 Cost of trial runs to ensure proper installation of the equipment 7,300 Fire and theft insurance on the factory for the first year of use 27,000 In addition to the above expenditures, Teradene purchased four forklifts from Caterpillar. In payment, Teradene paid $19,000 cash and signed a noninterest-bearing note requiring the payment of $73,000 in one year. An interest rate of 8% properly reflects the time value of money for this type of loan. Required: Determine the initial valuation of each of the assets Teradene acquired in the above transactions. (Round your answers to the nearest whole dollars.)

National Highways Authority (NHA) is considering a public-private partnership with Friends construction as main contractor using a DBOMF contract for a new 50-mile motorway on the outskirts of Baluchistan Province. The design includes seven 10-mile-long commercial/retail corridors on both sides of the road. Motorway construction is expected to require 6 years at an average cost of $4 million per mile. The discount rate is 11% per year, and the study period is 30 years. Initial investment is $200 million distributed over 5 years; $50 million now and in year 6 and remaining amount equally in rest of the years. Annual operating cost is $10 million per year, plus an additional $5 million every six years. Annual revenues Include tolls and retail/commercial growth; start at $5 million in first year, increasing by a constant $2 million annually through year 10, and then increasing by a constant $3 million per year through year 20 and remaining constant thereafter. Disbenefits include loss of income to people in surrounding areas; start at $15 million in year 1, decrease by $2 million per year through year 21, and remain at zero thereafter.

Required: Evaluate the economics of the proposal using (a) the modified B/C analysis from the NHA’s perspective and (b) the profitability index from the Friends construction viewpoint in which disbenefits are included and not included.

National Highways Authority (NHA) is considering a public-private partnership with Friends construction as main contractor using a DBOMF contract for a new 50-mile motorway on the outskirts of Baluchistan Province. The design includes seven 10-mile-long commercial/retail corridors on both sides of the road. Motorway construction is expected to require 6 years at an average cost of $4 million per mile. The discount rate is 11% per year, and the study period is 30 years. Initial investment is $200 million distributed over 5 years; $50 million now and in year 6 and remaining amount equally in rest of the years. Annual operating cost is $10 million per year, plus an additional $5 million every six years. Annual revenues Include tolls and retail/commercial growth; start at $5 million in first year, increasing by a constant $2 million annually through year 10, and then increasing by a constant $3 million per year through year 20 and remaining constant thereafter. Disbenefits include loss of income to people in surrounding areas; start at $15 million in year 1, decrease by $2 million per year through year 21, and remain at zero thereafter.

Required: Evaluate the economics of the proposal using (a) the modified B/C analysis from the NHA’s perspective and (b) the profitability index from the Friends construction viewpoint in which disbenefits are included and not included.