Question 9 O out of 10 points A wood products company has decided to purchase new logging equipment for $145,860 with a trade-in of its old equipment. The old equipment has a BV of $10,000 at the time of the trade-in. The new equipment will be kept for 10 years before being sold. Its estimated SV at the time is expected to be $5,000. Using the MACRS (GDS) recovery period, the depreciation charge permissible at year 6 is equal to Question 10 0 out of 10 points A firm owns a pressure vessel that it is contemplating replacing The old pressure vessel has annual operating and maintenance expenses of $60,000 per year and it can kept for five more years, at which time it will have zero market value it! is believed that $20,000 could be obtained for the old pressure vessel if it were sold now A new pressure vessel can be purchased for $110,000. The pressure vessel will have an market value of $50,000 in five years and will have annual operating and maintenance expenses of $30,000 per year. Using a before tax MARR of 20% per year determine whether or not the old pressure vessel should be replaced Answers Defender PW(20%)= $199,436 Challenger PW(20%) $189,623 The PW of the challenger is greater (less negative) than the PW of the defender. Thus, old pressure vessel should be replace Defender PW(20%)= $199,436 Challenger PW(20%)= -$189,623 The PW of the challenger is greater (less negative) than the PW of the defender. Thus, old pressure vesselsh be replace Defender PW(20%)= -$129,436 Challenger PW(20%)= $200,000 The PW of the defender is greater (less negative) than the PW of the challenger. Thus, old pressure vessel show not be replace Defender PW(20%)= $305,411 Challenger PW(20%)- $79,500 The PW of the challenger is greater (less negative) than the PW of the defender. Thus, old pressure vessel should be replace Defender PW(20%)= $200,000 Challenger PW(20%)= $300,000 The PW of the defender is greater (less negative) than the PW of the challenger Thus, old pressure vessel should not be replace 2022 AMAST Question 9 O out of 10 points A wood products company has decided to purchase new logging equipment for $145,860 with a trade-in of its old equipment. The old equipment has a BV of $10,000 at the time of the trade-in. The new equipment will be kept for 10 years before being sold. Its estimated SV at the time is expected to be $5,000. Using the MACRS (GDS) recovery period, the depreciation charge permissible at year 6 is equal to Question 10 0 out of 10 points A firm owns a pressure vessel that it is contemplating replacing The old pressure vessel has annual operating and maintenance expenses of $60,000 per year and it can kept for five more years, at which time it will have zero market value it! is believed that $20,000 could be obtained for the old pressure vessel if it were sold now A new pressure vessel can be purchased for $110,000. The pressure vessel will have an market value of $50,000 in five years and will have annual operating and maintenance expenses of $30,000 per year. Using a before tax MARR of 20% per year determine whether or not the old pressure vessel should be replaced Answers Defender PW(20%)= $199,436 Challenger PW(20%) $189,623 The PW of the challenger is greater (less negative) than the PW of the defender. Thus, old pressure vessel should be replace Defender PW(20%)= $199,436 Challenger PW(20%)= -$189,623 The PW of the challenger is greater (less negative) than the PW of the defender. Thus, old pressure vesselsh be replace Defender PW(20%)= -$129,436 Challenger PW(20%)= $200,000 The PW of the defender is greater (less negative) than the PW of the challenger. Thus, old pressure vessel show not be replace Defender PW(20%)= $305,411 Challenger PW(20%)- $79,500 The PW of the challenger is greater (less negative) than the PW of the defender. Thus, old pressure vessel should be replace Defender PW(20%)= $200,000 Challenger PW(20%)= $300,000 The PW of the defender is greater (less negative) than the PW of the challenger Thus, old pressure vessel should not be replace 2022 AMAST