CMM Company was constructed at a first cost of P8M and with estimated salvage value of X at the end of 25 years. Find the value of X using sinking fund if the book value amounted to P5,480,093.88 at the end of 15 years with an interest rate of 10% annually.
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CMM Company was constructed at a first cost of P8M and with estimated salvage value of X at the end of 25 years. Find the value of X using sinking fund if the book value amounted to P5,480,093.88 at the end of 15 years with an interest rate of 10% annually.
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- Air handling equipment that costs P12, 000 has a life of eight years with a P2, 000 salvage value. Using double declining balance method, what is the book value at the end of 4 years?A new office building was constructed 5 years ago by a consulting engineering firm. At that time the firm obtained a bank loan for $600,000 with a 12% annual interest rate, compounded quarterly. The loan terms call for equal quarterly payments for 10 years. The loan also allows for its prepayment at any time without penalty. The firm proposes to refinance the loan through an insurance company. The new loan would be for a 20-year term with an interest rate of 8% per year, compounded quarterly. The insurance company requires the payment of a 5% loan initiation charge (often described as a “5-point loan fee”), which will be added to the starting balance. (a) What is the balance due on the original mortgage if 16 payments have been made? (b) What is the difference between the old and new quarterly payments?Mrs. Sally Selfish's company is considering a project that has a 10 year life and cost GHC 5000. It would save GHC 1.000 per year in operating cost and increase revenue by GHC 600 per year. It would be financed with a 10 year loan with an interest of 8% per year. The salvage value for the newly purchased equipment is zero. If the minimum annual rate of return (MARR) or hurdle rate is 14% and the tax rate is 25%, what is the net present value (NPV) of the project. Use the straight line method to calculate the depreciation.
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- An equipment has a first cost of 500,000 PHP and the cost of installation is 30,000 PHP. At the end of its economic life of 35,000 operating hours, the salvage value is 10% of the equipment cost. Determine its book value at the end of the third year if its annual usage is 5,200hours.Rebecca is moving away from New York City for her new job, so she must buy a car rather than rely on public transit. The new car she is considering will cost $ 18,000 to buy, $ 1,500 per year to insure, and $ 500 per year for maintenance after the 3-year warranty expires. She would keep the car for 7 years when it will have a salvage value of $ 7,000. She has found a 2-year-old car that is the same model for $ 13,000. The 3-year warranty is transferrable, so the annual maintenance cost of $500 starts in year 2. Because the car is less valuable, insurance is $300 per year less than for the new car. After 5 years, the vehicle will be 7 years old and will have the same salvage value of $ 7,000. Rebecca is ignoring costs for fuel, oil, tires and registration, because the two vehicles will have the same costs. If her interest rate is 9%, how much cheaper is the used car (difference of EAC of two vehicles)A machine purchased 4 year ago cost 80,000 can be used for only two more years. The operating cost is 71,000 per year. Company B can purchase a replacement with cost of 210,000 and annual operation cost of 48,000. This new equipment will have 10-year life time with salvage value of 60,000 at the end of year 10. At the interest rate of 12% per year compounded quarterly, what minimum replacement value would render the challenger attractive. USE EXCEL FOR THUMBS UP, USE EXCEL FOR THUMBS UP, USE EXCEL FOR THUMBS UP
- A CERTAIN MACHINERY COST P50,000.00 AND WILL LAST FOR 12 YEARS WITH SALVAGE VALUE OF P5000.00. THE OWNER WANTS TO SELL IT AFTER 5 YEARS OF USE. FIND THE SELLING PRICE OF THE MACHINE SO THAT HE WILL NOT LOSE OR GAIN FINANCIALLY IN THE TRANSACTION BY USING SINKING FUND METHOD AT 5% COST OF MONEY.Problem 5: An equipment has a first cost of P 7,000, has a life of 8 years and a salvage value of “ x “. Compute the value of “ x “ if the book value of the equipment at the end of 4th year is P 2,291.11. Use SYD Method.A car costs ₱800,000, 4 years ago, and the salvage value is ₱50,000, 6 years from now. If it is to be replaced by a new one and the trade-in value is ₱450,000, find the sunk cost if money is worth 12%