A surface mount PCB placement/soldering line is to be installed for $1.6 million. It will have a salvage value of $100,000 after 5 years. Determine the depreciation deduction and the resulting unrecovered investment during each year of the asset’s life. Use double declining balance switching to straight-line depreciation.
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A surface mount PCB placement/soldering line is to be installed for $1.6 million. It will have a salvage value of $100,000 after 5 years. Determine the
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- A manufacturing company is planning to install an equipment having a first cost of $90Kand a salvage value, after 15 years, of $10,520. The company uses an interest rate of 10%.Find the PW of the depreciation deductions for straight-line, SOYD, double-decliningbalance. Rank the strategies in order of their attractiveness. Identify/determine the bestmethod.A surface mount PCB placement/soldering line is to be installed for $1.6 million. It will have a salvage value of $100,000 after 5 years. Determine the depreciation deduction and the resulting unrecovered investment during each year of the asset’s life. Use declining balance depreciation with a rate that ensures the book value equals the salvage value.I need the solution in handwriting The following are the cost of a system and the useful life is five years. The salvage value for depreciation purpose is equal to 25% of the hardware cost Item Cost Hardware $170,000 Training Installation $18,000 $18,000 a) What is the book value of the system at the end of year three if Straight line method is used? b) Suppose that after depreciation of the system for two years with straight line, the company decides to switch to the decline method for the reminder of the system life (depreciation rate 30%). What is the system Book Value at the end of four years? (
- Use the following information to evaluate a new project to purchase an equipment. The new equipment has a 5-year economic life, and it will be depreciated by the straight-line method. Revenues and other operating costs are expected to be constant over the project's life. What is the project's Year 5 cash flow? Equipment cost Shipping and installation cost Investment in net operating working capital Salvage value Sales revenue, each year Operating costs (excluding depreciation) Tax rate Select one: O a. $90,120 O b. $81,200 O c. $79,250 O d. $83,600 $110,000 $10,000 $40,000 $20,000 $50,000 $24,000 40%Cisco Systems is purchasing a new bar code scanning device for its service center in San Francisco. The table on the right lists the relevant initial costs for this purchase. The service life of the system is 4 years and its salvage value for depreciation purposes is expected to be about 25% of the hardware cost. a. What is the cost basis of the device? b. What are the annual depreciations of the device if (i) the SL method is used? (ii) the 150% DB method is used? (iii) the 200% DB method is used? c. Calculate the book values of the device at the end of 4 years using all the methods above. Answers: (a) The cost basis of the device is (Round to the nearest dollar) (b) Annual depreciaitions and book values: (Round to the nearest dollar) Year 1 2 3 4 Book values at end of year 4 SL $ 150% DB $ 200% DB $ $ C Cost Item Hardware Training Installation Cost $165,000 $16,000 $14,000An investment of $20,000 for a new condenser is being considered. Estimated salvage value of the condenser is $5,000 at the end of an estimated life of 6 years. Annual income each year for the 6 years is $8,500. Annual operating expenses are $2,300. Assume money is worth 15% compounded annually. Determine the internal rate of return and whether or not the condenser should be purchased.
- Solar power is to be installed to handle a large portion of a company's electrical load. Even though the system will likely work for 20-25 years, there is concern about functional obsolescence and the need to replace the system with more efficient components much sooner. The cost will be $270,000 and the system is expected to have a useful life of 8 years with a salvage value of $23,000 at that time.Develop a table showing the depreciation and book value for each year using double declining balance switching to straight-line depreciation at the optimal time.A cooling water pumping station at a manufacturing plant in iligan city cost 30,000,000 to construct and it is projected to have 25 year life with an estimated salvage value of 10% of construction cost. Calculate the annual depreciation charge for year 10(d10)using:a.straight line method b.declining balance method c.double declining balance method d.sinking fund at 10% e.sum-of-the-year digit method B.)if the cooling water pumping atation will be book-depreciated to zero over a recovery period of 30 years using the double blance methodConsider the following project with a 4-year life. If terminated prior to 4 years, the equipment used will have a positive salvage value. Cash flows from the project and salvage values at various stages are shown in the table below. Choose the optimal operating life of the project. Assume a WACC of 10%. Year Cash Flow Salvage Value 0 -5,000 4,500 1 3,200 3,375 2 2,200 2,250 3 1,500 1,125 4 900 0 1 year O years 3 years 2 years 4 years
- ChemCo is considering installing a new system for the production of composite materials that costs $215,000. The expected life of the system is 11 years and the salvage value is computed using the declining balance method with a depreciation rate of 15%. The expected annual savings will be $33,000. The MARR is 10%. (a) Calculate the salvage value of the system. (b) Graph the Present Worth VS Changes in the Annual Savings by varying the annual savings by + 15% in steps of 5%. Use Excel. (c) Calculate the break even Annual Savings value.Cisco Systems is purchasing a new bar code scanning device for its service center in San Francisco. The table on the right lists the relevant initial costs for this purchase. The service life of the system is 4 years and its salvage value for depreciation purposes is expected to be about 22% of the hardware cost. a. What is the cost basis of the device? b. What are the annual depreciations of the device if (i) the SL method is used? (ii) the 150% DB method is used? (iii) the 200% DB method is used? c. Calculate the book values of the device at the end of 4 years using all the methods above. Answers: (a) The cost basis of the device is $ (Round to the nearest dollar) (b) Annual depreciaitions and book values: (Round to the nearest dollar) 200% DB Year 1 2 3 4 Book values at end of year 4 SL 150% DB (...) 0 Cost Item Hardware Training Installation Cost $165,000 $15,000 $15,000Compute the EUAC for Pump A. Ideally this value was determined to make the decision of which pump to select. Pump A, with a useful life of 6 years: Initial cost = $3500 & Salvage value at end of life of $500 Enter the EUAC for Pump A.