Required: a. & b. Compute ROL, using net book value and gross book value for each year Note: Enter your answers as a percentage rounded to 2 decimal places (.e., 32.10). Year 1 Year 2 3 Year Year 4 ROI Net Book Value Gross Book Value % % %
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- Return to question The Ste. Marie Division of Pacific Media Corporation just started operations. It purchased depreciable assets costing $48.0 million and having a four-year expected life, after which the assets can be salvaged for $9.6 million. In addition, the division has $48.0 million in assets that are not depreciable. After four years, the division will have $48.0 million available from these nondepreciable assets. This means that the division has invested $96.0 million in assets with a salvage value of $57.6 million. Annual depreciation is $9.6 million. Annual operating cash flows are $20.6 million. In computing ROI, this division uses end-of-year asset values in the denominator. Depreciation is computed on a straight-line basis, recognizing the salvage values noted. Ignore taxes. Required: a. & b. Compute ROI, using net book value and gross book value for each year. (Enter your answers as a percentage rounded to 1 decimal place (i.e., 32.1).) Answer is complete but not entirely…Provide answer in table format B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $384,000 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 153,600 units of the equipment’s product each year. The expected annual income related to this equipment follows. Sales $ 240,000 Costs Materials, labor, and overhead (except depreciation on new equipment) 128,000 Depreciation on new equipment 32,000 Selling and administrative expenses 24,000 Total costs and expenses 184,000 Pretax income 56,000 Income taxes (20%) 11,200 Net income $ 44,800 1. Compute the payback period.2. Compute the accounting rate of return for this equipment.Amazon in OKC has just invested $250,000 in equipment having a negligible salvage value (SV 0) regardless of when the equipment if replaced. O&M costs equal $50,000 the first year and increase $10.000 per year. Based on a MARR of 10% What is the Capital Recovery (CR) cost for Year 4? A. $86,428 B. $60,317 C. $47,320 D. $39,569
- Delaney Company is considering replacing equipment that originally cost $518,000 and that has $362,600 accumulated depreciation to date. A new machine will cost $837,000. What is the sunk cost in this situation? Oa. $681,600 Ob. $124,320 Oc. $155,400 Od. $518,000Use the following information for the Exercises below. (Algo) Skip to question [The following information applies to the questions displayed below.] Tory Enterprises pays $242,400 for equipment that will last five years and have a $44,000 salvage value. By using the equipment in its operations for five years, the company expects to earn $88,900 annually, after deducting all expenses except depreciation. Exercise 10-9 (Algo) Straight-line depreciation and income effects LO P1 Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming straight-line depreciation is used. Income before Depreciaton Depreciation Net( pretax) Income Year 1 year 2 year 3 year 4 year 5 TotalsRequired information [The following information applies to the questions displayed below.] Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. The investment costs $45,000 and has an estimated $6,000 salvage value. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. Choose Numerator: 1 1 Accounting Rate of Return Choose Denominator: G O
- 3. A certain office equipment has a first cost of P20,000 and a salvage value of P1,000 at the end of 10 years. Determine the book value at the end of 6 years using double declining balance method 4. A machine having a first cost of P60,000 will be retired at the end of 8 years. Depreciation cost is computed using constant percentage of the declining book value. What is the total cost of depreciation, in pesos, up to time the machine is retired if the annual rate of depreciation is 28.72%? notluloaThe following pair of assets differ only in the MARR. The problem asks you to determine the effect of this difference on the economic life and to explain the result. All assets decline in value by 20 percent of current value each year. Installation costs are zero for all assets. Further data concerning the four pairs of assets are given in the table that follows. Asset First Cost A B $130,000 $130,000 Initial Operating Cost $35,000 $35,000 Rate of Operating Cost Increase 11.5%/year 11.5%/year MARR 5% 25%Saved Required information [The following information applies to the questions displayed below.] Peng Company is considering an investment expected to generate an average net income after taxes of $2,900 for three years. The investment costs $47,100 and has an estimated $6,600 salvage value. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. Accounting Rate of Return Choose Denominator: Accounting Rate of Return %3D Choose Numerator: Accounting rate of return
- Required information [The following information applies to the questions displayed below.] Tory Enterprises pays $256,400 for equipment that will last five years and have a $45,400 salvage value. By using the equipment in its operations for five years, the company expects to earn $90,300 annually, after deducting all expenses except depreciation. Calculate annual depreciation expense using double-declining-balance method. Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming double-declining-balance depreciation is used. Complete this question by entering your answers in the tabs below. Depreciation Schedule Calculate annual depreciation expenses using double-declining-balance method. Note: Round Annual Depreciation to the nearest whole dollar. Year Income Computation Year 1 Depreciation for the Period Beginning of Period Book Value O 8 Depreciation Annual Rate 9 Depreciation * prt…An asset with a cost of P1,200,000 is to be depreciated over 10 years with residual value. Profit after depreciation for the first five (5) years are as follows: Year 1 120,000.00 Year 2 170,000.00 Year 3 280,000.00 Year 4 370,000.00 Year 5 80,000.00 Required: Compute for the Payback Period to the nearest month.Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] NewTech purchases computer equipment for $261,000 to use in operating activities for the next four years. It estimates the equipment's salvage value at $30,000. Exercise 8-7 (Algo) Straight-line depreciation LO P1 Prepare a table showing depreciation and book value for each of the four years assuming straight-line depreciation. Choose Numerator: Year Year 1 Year 2 Year 3 Year 4 Total Straight-Line Depreciation Choose Denominator: Annual Depreciation = = Annual Depreciation Expense Depreciation expense Year-End Book Value