Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $830,000. The estimated market values of the purchased assets are building, $472,850; land, $289,500; land improvements, $77,200; and four vehicles, $125,450.

1-a. Allocate the lump-sum purchase price to the separate assets purchased.
1-b. Prepare the journal entry to record the purchase.
2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $29,000 salvage value.
3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation.

Earp Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of the machine will be $976,000, and its economic life is five years. The machine will be fully depreciated by the straight-line method. The machine will produce 21,000 keyboards each year. The price of each keyboard will be $40 in the first year and will increase by 4 percent per year. The production cost per keyboard will be $10 in the first year and will increase by 5 percent per year. The project will have an annual fixed cost of $196,000 and require an immediate investment of $26,000 in net working capital. The corporate tax rate for the company is 35 percent. The appropriate discount rate is 10 percent. What is the NPV of the investment?

Earp Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of the machine will be $985,000, and its economic life is five years. The machine will be fully depreciated by the straight-line method. The machine will produce 30,000 keyboards each year. The price of each keyboard will be $30 in the first year and will increase by 6 percent per year. The production cost per keyboard will be $10 in the first year and will increase by 7 percent per year. The project will have an annual fixed cost of $205,000 and require an immediate investment of $35,000 in net working capital. The corporate tax rate for the company is 35 percent. The appropriate discount rate is 13 percent.
  
What is the NPV of the investment?

Mmasodwo Enterprice is considering investing in a machine to produce computer keyboards. The price of the machine will be ¢530,000 and its economic life is five years. The machine will be fully depreciated by the straight-line method. The machine will produce 15,000 keyboards each year. The price of each keyboard will be ¢40 in the first year and will increase by 5 percent per year. The production cost per keyboard will be ¢20 in the first year and will increase by 6 percent per year. The project will have an annual fixed cost of ¢75,000 and require an immediate investment of ¢25,000 in net working capital. The corporate tax rate for the company is 34 percent. If the appropriate discount rate is 15 percent, what is the NPV of the investment?

b) Mmasodwo Enterprice is considering investing in a machine to produce computer keyboards. The price of the machine will be ¢530,000 and its economic life is five years. The machine will be fully depreciated by the straight-line method. The machine will produce 15,000 keyboards each year. The price of each keyboard will be ¢40 in the first year and will increase by 5 percent per year. The production cost per keyboard will be ¢20 in the first year and will increase by 6 percent per year. The project will have an annual fixed cost of ¢75,000 and require an immediate investment of ¢25,000 in net working capital. The corporate tax rate for the company is 34 percent. If the appropriate discount rate is 15 percent, what is the NPV of the investment?

Mmasodwo Enterprice is considering investing in a machine to produce computer keyboards. The price of the machine will be ¢530,000 and its economic life is five years. The machine will be fully depreciated by the straight-line method. The machine will produce 15,000 keyboards each year. The price of each keyboard will be ¢40 in the first year and will increase by 5 percent per year. The production cost per keyboard will be ¢20 in the first year and will increase by 6 percent per year. The project will have an annual fixed cost of ¢75,000 and require an immediate investment of ¢25,000 in net working capital. The corporate tax rate for the company is 34 percent. If the appropriate discount rate is 15 percent, what is the NPV of the investment?

Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of the machine will be $978,000, and its economic life is five years. The machine will be fully depreciated by the straight-line method. The machine will produce 23,000 keyboards each year. The price of each keyboard will be $50 in the first year and will increase by 6 percent per year. The production cost per keyboard will be $15 in the first year and will increase by 6 percent per year. The project will have an annual fixed cost of $198,000 and require an immediate investment of $28,000 in net working capital. The corporate tax rate for the company is 34 percent. The appropriate discount rate is 10 percent What is the NPV

Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of the machine will be $1,600,000, and its economic life is five years. The machine will be fully depreciated by the straight-line method. The machine will produce 25,000 keyboards each year. The price of each keyboard will be $54 in the first year and will increase by 6 percent per year. The production cost per keyboard will be $24 in the first year and will increase by 3 percent per year. The project will have an annual fixed cost of $275,000 and require an immediate investment of $240,000 in net working capital. The corporate tax rate for the company is 23 percent. The appropriate discount rate is 11 percent. What is the NPV of the investment?

1. Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of the machine will be $975,000, and its economic life is five years. The machine will be fully depreciated by the straight-line method. The machine will produce 20,000 keyboards each year. The price of each keyboard will be $40 in the first year and will increase by 5 percent per year. The production cost per keyboard will be $15 in the first year and will increase by 6 percent per year. The project will have an annual fixed cost of $195,000 and require an immediate investment of $25,000 in net working capital. The corporate tax rate for the company is 34 percent. If the appropriate discount rate is 11 percent, what is the NPV of the investment?