Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

here is the question with the answers with them. please try to use excel and answer all question. 11- A company is considering buying a

image text in transcribed

image text in transcribed

here is the question with the answers with them.

please try to use excel and answer all question.

11- A company is considering buying a new piece of machinery. A 10% interest rate will be used in the 44 computations. Two models of the machine are available. A Machine I Machine II Initial cost $80,000 $100,000 End-of-useful-life salvage value, S 20,000 25,000 Annual operating cost 18,000 15,000 first 10 years 20,000 thereafter Useful life, in years 20 25 MACRS class 7 yr 7 yr (a) Determine which machine should be purchased, based on equivalent uniform annual cost. (b) What is the capitalized cost of Machine I? (c) Machine I is purchased and a fund is set up to replace Machine I at the end of 20 years. Compute the required uniform annual deposit. (d) Machine I will produce an annual saving of material of $28,000. What is the rate of return if Machine I is installed? (e) What will be the book value of Machine I after 2 years, based on 60% bonus depreciation with the balance using MACRS? (f) What will be the book value of Machine II after 3 years, based on straight-line depreciation? (g) What would be the MACRS depreciation in the third year for Machine II? 11-44 a) M/C2 $27,380, b) $270,500, c) $1050, d) 11.4%, e) $19,590, f) $91,000, g) $17,490 11- A company is considering buying a new piece of machinery. A 10% interest rate will be used in the 44 computations. Two models of the machine are available. A Machine I Machine II Initial cost $80,000 $100,000 End-of-useful-life salvage value, S 20,000 25,000 Annual operating cost 18,000 15,000 first 10 years 20,000 thereafter Useful life, in years 20 25 MACRS class 7 yr 7 yr (a) Determine which machine should be purchased, based on equivalent uniform annual cost. (b) What is the capitalized cost of Machine I? (c) Machine I is purchased and a fund is set up to replace Machine I at the end of 20 years. Compute the required uniform annual deposit. (d) Machine I will produce an annual saving of material of $28,000. What is the rate of return if Machine I is installed? (e) What will be the book value of Machine I after 2 years, based on 60% bonus depreciation with the balance using MACRS? (f) What will be the book value of Machine II after 3 years, based on straight-line depreciation? (g) What would be the MACRS depreciation in the third year for Machine II? 11-44 a) M/C2 $27,380, b) $270,500, c) $1050, d) 11.4%, e) $19,590, f) $91,000, g) $17,490

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions