MTE mechanical engineering Company has a machine purchased 5 years ago at a cost of BDT 100000.00. Themachine had an expected duration of 10 years at that time. It had no salvage value and was depreciated on a straight-line method. Therefore, its annual depreciation charge was BDT 10000.00 and its present book valueis BDT 30000.00. The financial manager of the company is thinking to purchase a new machine costing BDT 150000.00 including freight and installation charges. The duration life of the new machine is 5 years with a salvage value of BDT 25000.00. The new machine will save BDT 40000.00 per year. If the new machine is purchased, the old one can be sold for BDT 15000.00. The corporate tax rate is 40% and the cost of capital is 12 %. Purchasing a new machine would require Tk. 15000.00as working capital at the beginning of the year which could be realized at the end of the 5th year. The new machine will be depreciated on a straight-line basis. Using the NPV method determined should the old be replaced?

MTE mechanical engineering Company has a machine purchased 5 years ago at a cost of BDT 100000.00. Themachine had an expected duration of 10 years at that time. It had no salvage value and was depreciated on a straight-line method. Therefore, its annual depreciation charge was BDT 10000.00 and its present book valueis BDT 30000.00. The financial manager of the company is thinking to purchase a new machine costing BDT 150000.00 including freight and installation charges. The duration life of the new machine is 5 years with a salvage value of BDT 25000.00. The new machine will save BDT 40000.00 per year. If the new machine is purchased, the old one can be sold for BDT 15000.00. The corporate tax rate is 40% and the cost of capital is 12 %. Purchasing a new machine would require Tk. 15000.00as working capital at the beginning of the year which could be realized at the end of the 5th year. The new machine will be depreciated on a straight-line basis. Using the NPV method determined should the old be replaced?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

SUBJECT: ENGINEERING ECONOMYTOPIC: DEPRECIATION SHOW THE COMPLETE AND DETAILED SOLUTION OF THIS PROBLEM. THANK YOU EXPERTS. B) An asset for drilling was purchased and placed in service by a petroleum production company. Its cost basis is P600K and it has an estimated salvage value of P32K at the end of an estimated useful life of 14 years. Compute the total depreciation after 4 years and the book value at the end of 7 years using the sinking fund method at interest rate of 6%.
Question: XYZ Corporation recently purchased machinery for its manufacturing operations. The machinery has an expected useful life of 10 years and no salvage value. XYZ Corporation uses the straight-line depreciation method. If the machinery costs $500,000, what would be the depreciation expense for the first year? Options: a) $50,000 b) $45,000 c) $55,000 d) $40,000
1. The cost of a machine is RM7000 and its salvage value is RM800 at the end of 9 years. No use excel. Calculate the depreciation and the book value for the 4th year using the straight-line method. (D = RM688.89 , BV4 = RM4244.44)
MONIBABA Company purchased a machine cost N50000 and will generate the following profits Year 1 3 4 5 N 25000 40000 20000 15000 12000 The scrap value is nil at the end of the machine 5years. Depreciation is calculated on a straight-line basis. You are required to calculate the Payback Period of the project
SUBJECT: ENGINEERING ECONOMYTOPIC: DEPRECIATION SHOW THE COMPLETE AND DETAILED SOLUTION OF THIS PROBLEM. THANK YOU EXPERTS.A) Butler Buildings purchased semiautomated assembly and riveting robotics equipment for constructing its modular warehouse buildings. The first cost was P4.75M and installation costs were P750K; life is estimated at 10 years with a salvage value of 15% of first cost. Using the straight line method, determine the annual depreciation and the book value after 5 years.
an electronic computer was purchased by a company for $90,000 and is assumed to have a salvage value of $10,000 after 10 years. If its value depreicated linerly from $90,000 to $10,000: Find the linear equation that relates value v in follars to t in time.
Plz use excel and show formula !!!!!!! Benson Enterprises is deciding when to replace its old machine. The machine’s current salvagevalue is $1.2 million. Its current book value is $1 million. If not sold, the old machine will requiremaintenance costs of $420,000 at the end of the year for the next five years. Depreciation on theold machine is $200,000 per year. At the end of five years, it will have a salvage value of $220,000.A replacement machine costs $3.5 million now and requires maintenance costs of $160,000 at theend of each year during its economic life of five years. At the end of five years, the new machinewill have a salvage value of $540,000. It will be fully depreciated using the three-year MACRSschedule. In five years a replacement machine will cost $4,000,000. Pilot will need to purchasethis machine regardless of what choice it makes today. The corporate tax is 35 percent and theappropriate discount rate is 10 percent. The company is assumed to earn sufficient revenues…
PLEASE SOLVE THIS TWO PROBLEMS ASAP. THANK YOU! A. A machine costs P388868 with a salvage value of P18029 is expected to last for 28537 hours in 5 years. In the first year of service it was used for 8077 hours. Compute the book value at the end of the first year. B.The cost of a certain asset is P486042 , its life is 5 years and scrap value is P9050 . Find the cost of depreciation after the first year using a constant percentage method.
Question: A company XYZ has purchased a new CNC Machine which has a cost basis of $5,000 and 8-year depreciable life. The estimated salvage value of the machine is zero at the end of 8 years. Use the Declining Balance method to calculate the annual depreciation amounts when R = 1.5/N (150% DB method). Tabulate the annual depreciation amount and Book Value for each year. (Solve question on white page and neat)
A company purchased a CNC machine for $40,000. It has a salvage value of $4,000 at the end of its useful life of 10 years. If the company depreciate the machine using the declining-balance (DB) method with 175% of the straight-line rate, what will be its book value at the end of year 2? A. $32,333 B. $26,896 O C. $24,206.40 D. $27,225 E. $32,800
Question: A company XYZ has purchased a new CNC Machine which has a cost basis of $5,000 and 8-year depreciable life. The estimated salvage value of the machine is zero at the end of 8 years. Use the Declining Balance method to calculate the annual depreciation amounts when R = 1.5/N (150% DB method). Tabulate the annual depreciation amount and Book Value for each year. (Solve question handwritten on white page clean and neat)
mework i Saved You skipped this question in the previous attempt. Jim Company bought a machine for $46,900 with an estimated life of 6 years. The residual value of the machine is $6,700. Assume straight-line depreciation. a. Calculate the annual depreciation. Annual depreciation b. Calculate the book value at the end of year 3. Book value

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS