Question

The purchase price of a front-end loader, including the tires, sales tax, and all other costs...

The purchase price of a front-end loader, including the tires, sales tax, and all other costs associated with its purchase, is $117,450. The life of the loader is 6 years, at which time it will have an estimated salvage value of $11,500. The replacement cost of the tires is $7,500 for all tires on the loader and is not to be included in the depreciation and interest cost. The loaders is expected to be used 1,200 hours per year. Determine the annual depreciation and interest cost of the loader using an interest rate of 7%

Engineering   Civil-Engineering   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Your company is looking at purchasing a front-end loader and has narrowed the choice down to...
Your company is looking at purchasing a front-end loader and has narrowed the choice down to two loaders. The investment in the larger loader yields the NPV of $28,372. The smaller loader would have a useful life of five years with a salvage value of $10,000 at the end of the fifth year. The smaller loader can be billed out at $90.00 per hour. It costs $28 per hour to operate the smaller front-end loader and $25 per hour for...
Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a...
Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list price of $140,000. The seller agreed to allow a 4% discount b/c Southwest Miling paid cash. Delivery terms were FOB shipping point. Freight Cost amounted to $1,200. Southwest Miling had to hire a specialist to calibrate the loader. The specialist's fee was $1,800. The load operator is paid an annual salary of $60,000. The cost of the company's theft insurance policy increased by...
A construction firm needs a front-end loader. The loader can be leased from the dealer for...
A construction firm needs a front-end loader. The loader can be leased from the dealer for 3 years for $7,400 per year including all maintenance, or it can be purchased for $30,000. The firm expects the loader to have a salvage value of $7,500 after 7 years. Maintenance will cost $750 in the first year and increase by $350 each year. The firm’s interest rate is 10% per year. a) What is the EUAC for leasing the loader ($/year)? b)...
Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in...
Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business. 2016 Jan. 1 Paid $282,000 cash plus $11,280 in sales tax and $1,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $28,200 salvage value. Loader costs are recorded in the Equipment account. Jan. 3 Paid $4,000 to enclose the cab and install air conditioning in the loader to enable operations...
Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in...
Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business. 2016 Jan. 1 Paid $286,000 cash plus $11,440 in sales tax and $1,800 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $28,600 salvage value. Loader costs are recorded in the Equipment account. Jan. 3 Paid $5,000 to enclose the cab and install air conditioning in the loader to enable operations...
Calculate the expected hourly owning and operating costs for 2nd year for a wheel loader with...
Calculate the expected hourly owning and operating costs for 2nd year for a wheel loader with the following information. Use the double declining balance method of depreciation. Delivered price (initial cost) $450,000 Tire cost $20,000 Estimated life 6 years Salvage value $60,000 Investment cost for the 2nd year 15 % of the delivered price Tax, insurance and storage for 2nd year 15% of the book value of 2nd year Operating conditions: Severe Rated power: 450 hp Fuel price: $2.5/gallon Operator’s...
Elga Co. is considering the purchase of a new production machine for $750,000 and the installation...
Elga Co. is considering the purchase of a new production machine for $750,000 and the installation cost would be $50,000. Sales will be $480,000 per year and annual operating costs (exclusive of depreciation) will be $200,000. The purchase of this machine would necessitate an increase in inventory of $100,000. This machine has an expected life of five years and the salvage value is $50,000. Assume that straight-line depreciation is used. The firm’s cost of capital is 14%, and the firm’s...
1.   Presto Company purchased equipment and these costs were incurred: Cash price $65,000 Sales taxes 3,600...
1.   Presto Company purchased equipment and these costs were incurred: Cash price $65,000 Sales taxes 3,600 Insurance during transit 640 Installation and testing  860 Total costs $70,100 Presto will record the acquisition cost of the equipment as a. $65,000. b. $68,600. c. $69,240. d. $70,100. 2. A company purchased factory equipment on April 1, 2015 for $160,000. It is estimated that the equipment will have a $20,000 salvage value at the end of its 10-year useful life. Using the straight-line method...
A company paid sales price of $200,000 to purchase equipment and $10,000 to have the equipment...
A company paid sales price of $200,000 to purchase equipment and $10,000 to have the equipment delivered to and installed in the company's production facilities on January 1, 2014. The sale tax for the purchase was $15k and $10k of maintenance expenses were incurred during the first year of operation. The estimated residual value of the equipment is $5,000. The equipment is expected to be used a total of 20,000 hours throughout its estimated useful life of five years. The...
Raymobile Motors is considering the purchase of a new production machine for $600,000. The purchase of...
Raymobile Motors is considering the purchase of a new production machine for $600,000. The purchase of this machine will result in an increase in earnings before interest and taxes of $100,000 per year. To operate this machine properly, workers would have to go through a brief training session that would cost $30,000 after taxes. It would cost $8,000 to install the machine properly. Also, because the machine is extremely efficient, its purchase would necessitate an increase in inventory of $20,000....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT