View previous a 1 [The following information applies to the questions displayed below. The management of Devine Instrument Company is considering the purchase of a new drilling machine, model RoboDril 1010K. According to the specifications and testing results, RoboDril will substantially increase productivity over AccuDril X10, the machine Devine is currently using. rt 1 of 2 nts The AccuDril was acquired 8 years ago for $80,000 and is being depreciated using the straight-line method over a 10- year expected life and an estimated salvage value of $20,000. The engineering department expects the Accu Dril to keep going for another 3 years after a major overhaul at the end of its expected useful life. The estimated cost for the overhaul is $100,000. The overhauled machine will be depreciated using straight-line depreciation with no salvage value. The overhaul will improve the machine's operating efficiency approximately 10% for each of years 3, 4, and 5. No other operating conditions will be affected by the overhaul. Skipped eBook RoboDril 1010K is selling for $240,000. Installing, testing, rearranging, and training will cost another $20,000. The manufacturer is willing to take the AccuDril as a trade-in for $30,000. The RoboDril will be depreciated using the straight- line method with no salvage value. New technology most likely will make RoboDril obsolete to the firm in 5 years. Print ferences Variable operating cost for either machine is the same: $11 per machine hour (cash-based). Other pertinent data follow: AccuDril X10 10,000 8,000 $ 100 RoboDril 1010K 10,000 4,000 $ 100 Units of output (per year) Machine hours Selling price per unit Variable manufacturing cost-cash-based (not including machine hours) Other annual expenses (tooling and supervising) Disposal value-today Disposal value-in 5 years $ 20 $70,000 $25,000 $ 0 $ 20 $40,000 $50,000 Value of $1 12% Periods 45 6% 75 89 99 10% 11% 13% 14% 15% 20% 25% 305 1 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.585 0.877 0.570 0.833 0.500 0.769 2. 0.925 0.907 0.890 0.873 0.557 0.542 0.826 O.SI2 0.797 0.753 0.769 0.756 0.694 0.640 0 592 3 0.889 0.864 0.540 0.816 0.794 0.772 0.751 0.731 0.712 0.693 0.675 0.655 0.579 0.512 0.455 4 0.855 0.823 0.792 0.763 0.735 0.70S 0.683 0.659 0.636 0.613 0.592 0.572 0.482 0.410 0.350 5 0.822 0.784 0.747 0.713 0.651 0650 0.621 0.593 0.567 0.543 0.519 0.497 0.402 0.328 0.269 6 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.535 0.507 0.450 0.456 0.432 0.335 0.262 0.207 7 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.425 0.400 0.376 0.279 0.210 0.159 S 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0.376 0.351 0.327 0.233 0.165 0.123 9 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.391 0.361 0.333 0.308 0.284 0.194 0.134 0.094 10 0.676 0.614 0.55 0.505 0.463 0.422 0.336 0.352 0.322 0.295 0.270 0.247 0.162 0.107 0.073 11 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.317 0.287 0.261 0.237 0.215 0.135 0.086 0.056 12 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.286 0.257 0.231 0.205 0.187 0.112 0.069 0.043 13 0.601 0.530 0.469 0.415 0.365 0.326 0.290 0.258 0.229 0.204 0.152 0.163 0.093 0.055 0.033 14 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.232 0.205 0.151 0.160 0.141 0.078 0.044 0.025 15 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.209 0.183 0.160 0.140 0.123 0.065 0.035 0.020 16 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0 188 0.163 0.141 0.123 0.107 0.054 0.028 0.015 17 0.513 0.436 0.371 0.317 0.270 0.231 0.19 0.170 0 146 0.125 0.105 0.093 0.045 0.023 0.012 18 0.494 0.416 0.350 0.296 0.250 0.212 0.1SO 0.153 0.130 0.111 0.095 0.081 0.035 0.018 0.009 19 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.138 0.116 0.098 0.083 0.070 0.031 0.014 0.007 20 0.456 0.377 0.312 0.25% 0.215 0.178 0.149 0.124 0.104 0.087 0.073 0.061 0.026 0.012 0.005 22 0.422 0.342 0.275 0.226 0.134 0.150 0.123 0.101 0.083 0.068 0.056 0.046 0.018 0.007 0.003 24 0.390 0.310 0.247 0.197 0.15 0.126 0.102 0.082 0.066 0.053 0.043 0.035 0.013 0.005 0.002 25 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.074 0 059 0.047 0.035 0.030 0.010 0.004 0.001 30 0.30S 0.231 0.174 0.131 0.099 0.075 0.057 0.044 0.033 0.026 0.020 0.015 0.004 0.001 0.000 35 0.253 0.181 0.130 0.094 0.068 0.049 0.036 0.026 0.019 0014 0.010 0.008 0.002 0.000 0.000 40 0,208 0.142 0.097 0.067 0.046 0.032 0.022 0.015 0.011 0.008 0.005 0.004 0.001 0.000 0.000 View previous a 1 [The following information applies to the questions displayed below. The management of Devine Instrument Company is considering the purchase of a new drilling machine, model RoboDril 1010K. According to the specifications and testing results, RoboDril will substantially increase productivity over AccuDril X10, the machine Devine is currently using. rt 1 of 2 nts The AccuDril was acquired 8 years ago for $80,000 and is being depreciated using the straight-line method over a 10- year expected life and an estimated salvage value of $20,000. The engineering department expects the Accu Dril to keep going for another 3 years after a major overhaul at the end of its expected useful life. The estimated cost for the overhaul is $100,000. The overhauled machine will be depreciated using straight-line depreciation with no salvage value. The overhaul will improve the machine's operating efficiency approximately 10% for each of years 3, 4, and 5. No other operating conditions will be affected by the overhaul. Skipped eBook RoboDril 1010K is selling for $240,000. Installing, testing, rearranging, and training will cost another $20,000. The manufacturer is willing to take the AccuDril as a trade-in for $30,000. The RoboDril will be depreciated using the straight- line method with no salvage value. New technology most likely will make RoboDril obsolete to the firm in 5 years. Print ferences Variable operating cost for either machine is the same: $11 per machine hour (cash-based). Other pertinent data follow: AccuDril X10 10,000 8,000 $ 100 RoboDril 1010K 10,000 4,000 $ 100 Units of output (per year) Machine hours Selling price per unit Variable manufacturing cost-cash-based (not including machine hours) Other annual expenses (tooling and supervising) Disposal value-today Disposal value-in 5 years $ 20 $70,000 $25,000 $ 0 $ 20 $40,000 $50,000 Value of $1 12% Periods 45 6% 75 89 99 10% 11% 13% 14% 15% 20% 25% 305 1 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.585 0.877 0.570 0.833 0.500 0.769 2. 0.925 0.907 0.890 0.873 0.557 0.542 0.826 O.SI2 0.797 0.753 0.769 0.756 0.694 0.640 0 592 3 0.889 0.864 0.540 0.816 0.794 0.772 0.751 0.731 0.712 0.693 0.675 0.655 0.579 0.512 0.455 4 0.855 0.823 0.792 0.763 0.735 0.70S 0.683 0.659 0.636 0.613 0.592 0.572 0.482 0.410 0.350 5 0.822 0.784 0.747 0.713 0.651 0650 0.621 0.593 0.567 0.543 0.519 0.497 0.402 0.328 0.269 6 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.535 0.507 0.450 0.456 0.432 0.335 0.262 0.207 7 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.425 0.400 0.376 0.279 0.210 0.159 S 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0.376 0.351 0.327 0.233 0.165 0.123 9 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.391 0.361 0.333 0.308 0.284 0.194 0.134 0.094 10 0.676 0.614 0.55 0.505 0.463 0.422 0.336 0.352 0.322 0.295 0.270 0.247 0.162 0.107 0.073 11 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.317 0.287 0.261 0.237 0.215 0.135 0.086 0.056 12 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.286 0.257 0.231 0.205 0.187 0.112 0.069 0.043 13 0.601 0.530 0.469 0.415 0.365 0.326 0.290 0.258 0.229 0.204 0.152 0.163 0.093 0.055 0.033 14 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.232 0.205 0.151 0.160 0.141 0.078 0.044 0.025 15 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.209 0.183 0.160 0.140 0.123 0.065 0.035 0.020 16 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0 188 0.163 0.141 0.123 0.107 0.054 0.028 0.015 17 0.513 0.436 0.371 0.317 0.270 0.231 0.19 0.170 0 146 0.125 0.105 0.093 0.045 0.023 0.012 18 0.494 0.416 0.350 0.296 0.250 0.212 0.1SO 0.153 0.130 0.111 0.095 0.081 0.035 0.018 0.009 19 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.138 0.116 0.098 0.083 0.070 0.031 0.014 0.007 20 0.456 0.377 0.312 0.25% 0.215 0.178 0.149 0.124 0.104 0.087 0.073 0.061 0.026 0.012 0.005 22 0.422 0.342 0.275 0.226 0.134 0.150 0.123 0.101 0.083 0.068 0.056 0.046 0.018 0.007 0.003 24 0.390 0.310 0.247 0.197 0.15 0.126 0.102 0.082 0.066 0.053 0.043 0.035 0.013 0.005 0.002 25 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.074 0 059 0.047 0.035 0.030 0.010 0.004 0.001 30 0.30S 0.231 0.174 0.131 0.099 0.075 0.057 0.044 0.033 0.026 0.020 0.015 0.004 0.001 0.000 35 0.253 0.181 0.130 0.094 0.068 0.049 0.036 0.026 0.019 0014 0.010 0.008 0.002 0.000 0.000 40 0,208 0.142 0.097 0.067 0.046 0.032 0.022 0.015 0.011 0.008 0.005 0.004 0.001 0.000 0.000