Question

please show work and formulas, thank you XYZ Machining Inc. is considering the purchase of a...

please show work and formulas, thank you

XYZ Machining Inc. is considering the purchase of a new milling machine at a cost of $18,000. The machine is expected to have a service life of eight years and a salvage value of $2,500. Develop the complete depreciation schedule for the machine showing year-by-year depreciation charges and book values, using: (a) Straight line depreciation, (b) SOYD depreciation. (c) DDB depreciation, (d) MACRS depreciation.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer

Depreciable amount = Cost - salvage value = 18,000 - 2,500 = $ 15,500

Annual straight-line depreciation charge = Depreciable amount / Estimated useful life = 15,500 / 8 = $ 1,937.50

Present worth of the straight line depreciation charges = 1,937.50 x PVAi=10%,n=8 = 1,937.50 x 5.335 = $ 10,336.56

Sum of the digits depreciation method:

Sum of the digits = 8+7+6+5+4+3+2+1 = 36

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
On January 1, 2017, Wesley's Machining & Welding, Inc. (WMW) purchased equipment for $62,000. It cost...
On January 1, 2017, Wesley's Machining & Welding, Inc. (WMW) purchased equipment for $62,000. It cost an additional $3,000 to deliver, install, and calibrate the equipment. This machine has a service life of 5 years, at which time it is expected that the device will be scrapped for a $5,000 salvage value. WMW uses the straight-line depreciation method. Use the attached worksheet to complete the following: Prepare a worksheet to determine annual depreciation. Prepare a depreciation schedule showing annual depreciation...
tinney​ & Smyth Inc. is considering the purchase of a new batch​ polymer-bonding machine for producing...
tinney​ & Smyth Inc. is considering the purchase of a new batch​ polymer-bonding machine for producing Crazy​ Rubber, a​ children's toy that is​ soft, pliable but also bouncy. The machine will increase EBITDA by $275,000 per year for the next two years. Assume that operating cash flows occur at the end of each year. The​ machine's purchase price is $305,000 and the salvage value at the end of two years is $67,100.The machine is classified as 3-year property. To run...
Must show all work and be in EXCEL format-formulas must be shown Frenchies, Inc. is considering...
Must show all work and be in EXCEL format-formulas must be shown Frenchies, Inc. is considering a major investment. The investment will have an initial cost of $630,000 and will be depreciated straight-line to a zero book value over the life of the project. The cash inflows generated by the project are estimated at $255,000 for the first three years and $25,000 for the following five years. What is the internal rate of return?
XYZ Company is considering whether a project requiring the purchase of new equipment is worth investing....
XYZ Company is considering whether a project requiring the purchase of new equipment is worth investing. The cost of a new machine is $340,000 including shipping and installation. The project will increase annual revenues by $400,000 and annual costs by $100,000. The machine will be depreciated via straight-line depreciation for three years to a salvage value of $40,000. If the firm does this project, $30,000 in net working capital will be required. What is the annual cash flow of this...
XYZ Company is considering whether a project requiring the purchase of new equipment is worth investing....
XYZ Company is considering whether a project requiring the purchase of new equipment is worth investing. The cost of a new machine is $340,000 including shipping and installation. The project will increase annual revenues by $400,000 and annual costs by $100,000. The machine will be depreciated via straight-line depreciation for three years to a salvage value of $40,000. If the firm does this project, $30,000 in net working capital will be required. What is the annual cash flow of this...
Premier Steel, Inc. is considering the purchase of a new machine for $100,000 that has a...
Premier Steel, Inc. is considering the purchase of a new machine for $100,000 that has a useful life of 3 years. The firm’s cost of capital is 11% and the tax rate is 40%. This machine will be sold for its salvage value of $20,000 at the end of 3-years. The machine will require an investment of $2,500 in spare parts inventory upon installation. The machine will cost $8,000 to ship and $4,000 to install and modify it. Sales are...
Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the...
Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball for $120,000 and sell its old low-pressure glueball, which is fully depreciated, for $20,000. The new equipment has a 10-year useful life and will save $28,000 a year in expenses. The opportunity cost of capital is 12%, and the firm’s tax rate is 40%. What is the equivalent annual savings from the purchase if Gluon uses straight-line depreciation? Assume the new machine will...
Bottoms Up Diaper Service is considering the purchase of a new industrial washer. It can purchase...
Bottoms Up Diaper Service is considering the purchase of a new industrial washer. It can purchase the washer for $9,000 and sell its old washer for $2,200. The new washer will last for 6 years and save $2,700 a year in expenses. The opportunity cost of capital is 19%, and the firm’s tax rate is 40%. a. If the firm uses straight-line depreciation to an assumed salvage value of zero over a 6-year life, what is the annual operating cash...
Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the...
Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball for $150,000 and sell its old low-pressure glueball, which is fully depreciated, for $26,000. The new equipment has a 10-year useful life and will save $34,000 a year in expenses. The opportunity cost of capital is 11%, and the firm’s tax rate is 40%. What is the equivalent annual savings from the purchase if Gluon uses straight-line depreciation? Assume the new machine will...
Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the...
Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball for $120,000 and sell its old low-pressure glueball, which is fully depreciated, for $20,000. The new equipment has a 10-year useful life and will save $28,000 a year in expenses. The opportunity cost of capital is 12%, and the firm’s tax rate is 40%. What is the equivalent annual savings from the purchase if Gluon uses straight-line depreciation? Assume the new machine will...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT