Question

you buy a fleet of 10 general purpose trucks for your business. they cost 40000 each...

you buy a fleet of 10 general purpose trucks for your business. they cost 40000 each at t =0. you plan to use them for 8 years and sell them each at 8000 at that time.
(a) show the book value and depreciation allowance for first 4 years using Straight line depreciation
(b) repeat the calculation using a rate so that the book value equal the salvage value at the end of the 8 years

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Solution:-

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
A fleet of refrigerated delivery trucks is acquired on January 5, 2017, at a cost of...
A fleet of refrigerated delivery trucks is acquired on January 5, 2017, at a cost of $830,000 with an estimated useful life of eight years and an estimated salvage value of $75,000. Compute the depreciation expense for the first three years using the double-declining-balance method. (Round your answers to the nearest dollar.) Depreciation for the Period End of Period Annual Period Beginning of Period Book Value Depreciation Rate (%) Depreciation Expense Accumulated Depreciation Book Value First Year Second Year Third...
Your plant manager wants you to buy a new lathe for $410000. The lathe should be...
Your plant manager wants you to buy a new lathe for $410000. The lathe should be useful to your company for 8 years at which point you plan to replace. The estimated salvage value at the end of the useful life is $20000. Using straight line depreciation what is the Book value when the asset is sold?
A company has just invested in a fleet of 12 new delivery trucks. They are identical...
A company has just invested in a fleet of 12 new delivery trucks. They are identical in terms of features, capability, and price. The companies operation involves deliveries to long haul' destinations, and 'short haul' destinations. The company assumes each truck to have a useful life of 5 years. Experience has shown that the 'long haul' trucks typically develop problems, or wear out, twice as fast as the 'short haul' trucks, primarily due to the significantly higher number of miles...
You plan to open your own wine business. The cost of plant, property and equipment is...
You plan to open your own wine business. The cost of plant, property and equipment is $500,000. You already have the money for the initial cost which you could invest at the same level of risk and expect to earn 10%. You think you can sell 1 million bottles/year at $1/per bottle. Your costs are $200,000/per year to keep the factory running plus $0.50/bottle produced. Your tax rate is 50% and you plan to operate this business for 5-years. You...
Madrano's Wholesale Fruit Company located in? McAllen, Texas is considering the purchase of a new fleet...
Madrano's Wholesale Fruit Company located in? McAllen, Texas is considering the purchase of a new fleet of tractors to be used in the delivery of fruits and vegetables grown in the Rio Grande Valley of Texas. If it goes through with the? purchase, it will spend $400,000 on eight rigs. The new trucks will be kept for 5 years, during which time they will be depreciated toward a $40,000 salvage value using? straight-line depreciation. The rigs are expected to have...
A corporation expects to receive $10,000 each year for 8 years from the sale of a...
A corporation expects to receive $10,000 each year for 8 years from the sale of a product. There will be an initial investment of $40,000. Annual expenses will be $3,707 per year. Assume straight-line depreciation, an 8-year useful life and no salvage value. Use a 46% income tax rate. Determine the projected after-tax rate of return (show IRR calculation using book notation in your answer or handwritten submission).
A corporation expects to receive $10,000 each year for 8 years from the sale of a...
A corporation expects to receive $10,000 each year for 8 years from the sale of a product. There will be an initial investment of $40,000. Annual expenses will be $3,707 per year. Assume straight-line depreciation, an 8-year useful life and no salvage value. Use a 46% income tax rate. Determine the projected after-tax rate of return (show IRR calculation using book notation in your answer or handwritten submission).
Three different companies each purchased trucks on January 1, 2016, for $54,000. Each truck was expected...
Three different companies each purchased trucks on January 1, 2016, for $54,000. Each truck was expected to last four years or 250,000 miles. Salvage value was estimated to be $5,000. All three trucks were driven 75,000 miles in 2016, 60,000 miles in 2017, 50,000 miles in 2018, and 70,000 miles in 2019. Each of the three companies earned $41,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company...
Q6) A new machine purchased by a firm has an initial cost of $30,000, annual operating...
Q6) A new machine purchased by a firm has an initial cost of $30,000, annual operating cost of $1,000 per year, and a salvage value of $5,000 after a 9 years recovery period. The firm uses MARR of 15% per year. Determine a) the depreciation charge at year 4, and b) the book value at year 4 using the Straight Line (SL) method. Q7) From the information in Q6, calculate a) the depreciation charge at year 4, and b) the...
Your company is contemplating replacing their current fleet of delivery vehicles with Nissan NV vans. You...
Your company is contemplating replacing their current fleet of delivery vehicles with Nissan NV vans. You will be replacing 5 fully-depreciated vans, which you think you can sell for $3,100 apiece and which you could probably use for another 2 years if you chose not to replace them. The NV vans will cost $29,850 each in the configuration you want them, and can be depreciated using MACRS over a 5-year life. Expected yearly before-tax cash savings due to acquiring the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT