Question

The Thomas Company wishes to buy a $64,229 piece of equipment with
an estimated useful life of 14 years and an estimated $7,087
salvage value.
Annual cash inflows and outflows are targeted at $25,953 and
$17,107 respectively. Straight-line depreciation will be used and a
31% tax rate is applicable. The net annual cash benefit would
be: *
Answer to nearest whole dollar without any commas, decimal points,
or words (e.g. 1000 not 1,000.00 or increase 1000). Enter a
negative number as -10 not (10).*

Answer #1

Windsor, Inc. purchased a piece of equipment for $82,100. It
estimated an 8-year life and a $1,700 salvage value. At the end of
year four (before the depreciation adjustment), it estimated the
new total life to be 10 years and the new salvage value to be
$34,450. Compute the revised annual depreciation. (Round answer to
0 decimal places, e.g. 5,275.)
Revised annual depreciation $ ________

You have an opportunity to buy a new piece of diagnostic
equipment for the following terms: price including installation:
$1,285,000; expected useful life: 5 years with straight-line
depreciation; cost of capital for the practice is 12%.According to
financial projections, each year will look something like this:
Projections ($000s)
Start
1
2
3
4
5
6
Total
Cash inflows
328
450
525
760
620
2,683
Cash outflows
1,285
105
138
155
200
170
2,053
Net cash flows
-1,285
223
312
370...

A
company recently paid $1,500,000 to buy a building with an
estimated useful life of 20 years and a salvage value of $25,000.
Prepare a depreciation schedule for the first 10 (TEN) years of the
assets life using the double-declining-balance depreciation
method.

On July 1, 2019, Sunland Company purchased new equipment for
$80,000. Its estimated useful life was 8 years with a $20,000
salvage value. On December 31, 2022, the company estimated that the
equipment’s remaining useful life was 10 years, with a revised
salvage value of $5,000.
Compute the revised annual depreciation on December 31,
2022.

Modella Construction Company is considering buying a new piece
of equipment to use in their business: Cost of
equipment……………………………………….. $10,000 Annual net cash
inflows…………………………………. $2,800 Working Capital
required…………………………..……. $5,000 Salvage value of equipment
………………….…………. $1,000 Life of the equipment …………………………….……… 8 years
Discount rate ……………………………………………… 10% At the completion of 8 years,
the working capital will be released for use elsewhere. Compute the
net present value of the equipment, and state if they should buy
the equipment or not. Show...

On January 1, 2016, Sparks Company purchased for $360,000
snow-making equipment having an estimated useful life of 8 years
with an estimated salvage value of $25,000 and 500,000 units
expected to be produced. Depreciation is taken for the portion of
the year the asset is used.
(a) Complete the form below by determining the depreciation
expense and year-end book values of 2015 and 2016 using the
1. Straight Line Method
2. Production assuming 50,000 units produced in 2016 and 60,000...

Equipment acquired on January 9, 20Y3, at a cost of $699,000,
has an estimated useful life of 17 years, an estimated residual
value of $153,780, and is depreciated by the straight-line
method.
a. What was the book value of the equipment at
the end of the fifth year, December 31, 20Y7? Round your interim
calculations and final answer to the nearest dollar.
$
For decreases in accounts or outflows of cash, enter your
answers as negative numbers. Round annual depreciation...

Q 12.44: JT Engineering wants to buy a machine
that costs $360,000, has an 8-year life, and has a $12,000 salvage
value. Annual inflows are $120,000 and annual outflows are $86,000
(including depreciation). What is the annual rate of return on this
purchase?
A : 18.28%
B : 18.88%
C : 22.86%
D : 28.33%
Q 12.43: Clarendon Co. is considering purchasing new equipment
with a 6-year useful life. The equipment will cost $309,120 and
have annual depreciation expense of...

Tulsa Company is considering investing in new bottling equipment
and has two options: Option A has a lower initial cost but would
require a significant expenditure to rebuild the machine after four
years; Option B has higher maintenance costs, but also has a higher
salvage value at the end of its useful life. Tulsa’s cost of
capital is 11 percent. The following estimates of the cash flows
were developed by Tulsa’s controller:
A
B
Initial Investment
320,000
454,000
Annual Cash...

Yappy Company is considering a capital investment of $320,000 in
additional equipment. The new equipment is expected to have a
useful life of 8 years with no salvage value. Depreciation is
computed by the straight-line method. During the life of the
investment, annual net income is expected to be 25,000 and cash
inflows are expected to be $65,000. Yappy requires a 10% return on
all new investments.
Instructions: Using each of the methods below, show ALL your
work for calculating...

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