Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The data for brand-new and second-hand machines are shown below: SECOND HAND INITIAL COST (Php) ANNUAL OPERATING COST (Php) SALVAGE VALUE (Php) USEFULE LIFE
The data for brand-new and second-hand machines are shown below: SECOND HAND INITIAL COST (Php) ANNUAL OPERATING COST (Php) SALVAGE VALUE (Php) USEFULE LIFE (yrs) 15,000 8,000 5,000 3 BRAND NEW 40,000 2,000 10,000 6 51. Calculate the capitalized cost of second-hand machine if interest is 10% per year. A. P 168,431 B. P 131,680 C. P 125,211 52. Calculate the capitalized cost of brand-new machine if interest is 8% per year. A. P 116,118 B. P 125,450 C. P 133,531 53. At what interest rate will the two options have the same capitalized cost? A. 25.36% B. 28.59% C. 13.41% D. P 135,295 D. P 145,290 D. 14.25%
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the capitalized cost of a machine we need to consider the initial cost annual operating cost salvage value and useful life of the machine ...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started