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- A small microprocessor costing $12,000 is to be depreciated using 150% declining balance depreciation over the next 4 years. The microprocessor will have no value after 4 years. Determine the depreciation schedule. What is the book value at the end of the 4 years?Auto Detailers is buying some new equipment at a cost of $188,900. This equipment will be depreciated on a straight-line basis to a zero book value its eight-year life. The equipment is expected to generate net income of $11,000 a year for the first four years and $24,000 a year for the last four years. What is the average accounting rate of return? A) 18.09 percent B) 15.48 percent C) 18.53 percent D) 17.76 percent E) 22.68 percentA machine is purchased for $6500. It is expected to last 8 years and have a residual value of $700. What is the annual straight-line depreciation amount? The machine will depreciate $(blank) per year.
- Alpha Zeta is considering purchasing some new equipment costing $390,000. The equipment will be depreciated on a straight line basis to zero book value over the four year life of the project. Projected net income for the four years is $18,900; $21,300; $26,700; and $25,000. What is the average accounting rate of return?Hello. Need help with the solution to question. Calculate the annual straight-line depreciation for a machine that costs $30,000 and has installation and shipping costs that total $2,000. The machine will be depreciated over a period of 15 years. The company’s marginal tax rate is 40 percent. Round your answer to the nearest dollar.A machine has a first cost of $10,000 and an expected salvage value of $900 when it is sold. Annually, the operating cost is $500, and the revenue generated from sales is $2,500. What is the payback period assuming a MARR of 20% per year, an effective tax rate of 15%, and straight line depreciation over 5 years taking into account the salvage value (note, even though the machine might be fully depreciated down to its salvage value for tax purposes, assume the machine can continue to operate forever and that it will never be sold).
- ChemCo is considering installing a new system for the production of composite materials that costs $215,000. The expected life of the system is 11 years and the salvage value is computed using the declining balance method with a depreciation rate of 15%. The expected annual savings will be $33,000. The MARR is 10%. (a) Calculate the salvage value of the system. (b) Graph the Present Worth VS Changes in the Annual Savings by varying the annual savings by + 15% in steps of 5%. Use Excel. (c) Calculate the break even Annual Savings value.Company A is considering the purchase of a new equipment. This equipment will cost $250,000 and will be depreciated using an MACRS GDS recovery period of 7 years. The equipment is expected to have a market value of $50,000 at the end of its estimated 8-year life. What is the depreciation amount on the second year? What is the Book Value at the end of the 3rdyear? Assume that the asset will be disposed of in year 3.Your company is considering taking on a new project that will cost $200,000. It is estimated that the system will increase sales/revenues by $150,000 annually for Years 1-6. Operating expenses, other than depreciation, are expected to be equal to 60 percent of sales in each year. The system will be depreciated on a MACRS basis over 5 years (depreciation rates are 20%, 32%, 19%, 12% 11%, and 6%) to a zero book value, but the expected salvage at Year 6 is $40,000. The firm will also be required to invest $25,000 in net working capital at Year 0, but will recapture this amount at Year 6. You may assume that the tax rate on ordinary income is 40 percent (record negative taxes as a positive cash flow). As you can calculate, the IRR for this project is 13.02%. If we assume that the firm's cost of capital for this project is 11 percent, then what is the NPV for this project? $29,055.63 O $37.201.15 $6,874.69 $21,301.58 O $13,915.29
- A furnace has an initial investment of $ 58,000 AND a recovery value after 7 years of 12.5% of your initial investment. The depreciation method to use is the double declining balance method. What will the depreciation charge be each year?Mountain Frost is considering a new project with an initial cost of $205,000. The equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. The projected net income for each year is $20,000, $20,900, $24,600, and $16,900, respectively. What is the average accounting return? Please make sure its correctAlpha Company is planning to invest in a machine, the use of which will result in the following:• Annual revenues of $ l 0.000 in the first year and increases of $5,000 eachyear. up to year 9. From year IO. the revenues will remain constant ($52,000)for an indefinite period.• The machine is to be overhauled every 10 years. TI1c expense for each overhaul is $40.000.If Alpha expects a present worth of at least $100,000 at a MARR of 10% forthis project. what is the maximum investment that Alpha should be prepared to make?(a) $250.140(b) $67.697(c) $350, 100(d) $509.600