A company's factory has a useful life of 30 years. It originally cost $40 million to...
A company's factory has a useful life of 30 years. It originally cost $40 million to build and is expected to depreciate uniformly over the 30 years, leaving a salvage value of $10 million. Calculate the opportunity cost of using the factory in its fifth year. Assume the rate of return on a similarly risky investment is 14 percent.
Homework Answers
The value of the building originally is $ 40 million.
It depreciates by (40-10)/30 = 1 million every year
After 4 years, the value of the building is 40 - 1*4 = 36 million
Using a 14% rate, the opportunity cost is 14%*36 = 5.04 million
Add Answer to:
A company's factory has a useful life of 30 years. It originally
cost $40 million to...
‘When originally purchased, a vehicle had an estimated useful life of 8 years. The vehicle cost...
‘When originally purchased, a vehicle had an estimated useful life of 8 years. The vehicle cost $23,000 and it’s estimated salvage value is $1,500. after 4 years of straight-line depreciation, the asset’s total estimated useful life was revised from 8 years to 6 years; there was No change in the estimated salvage value. What is the amount of depreciation expense in 5 years? Show your work a. $5,375.00 b. $2,687.50 c. $5,543.75 d. $10,750.00 e. $ 2,856.25
You purchased a machine five years ago for $100,000. It has a useful life of 10...
You purchased a machine five years ago for $100,000. It has a useful life of 10 years and you depreciate it using straight line depreciation to an expected salvage value at the end of its life of $5,000. It currently has a salvage value of $20,000. You are considering purchasing a new machine for $175,000. The new machine is expected to have a salvage value of $35,000 at the end of its life. It will cost $8,000 to ship the...
The machine originally had an estimated useful life of 9 years, but after 3 complete years,...
The machine originally had an estimated useful life of 9 years, but after 3 complete years, it was decided thatvthe original estimate if useful life should have been 13 years. At that point the remaining cost to be depreciated should be allocated over tge remaining
28) When originally purchased, a vehicle costing $26.460 had an estimated useful life of 8 years...
28) When originally purchased, a vehicle costing $26.460 had an estimated useful life of 8 years and an estimated salvage value of $3500. After 4 years of straight-line depreciation, the asset's total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated salvage value. The depreciation expense in year 5 equals: A) S3038.00. B) $11,480.00. C) $5908.00. D) $5740.00 E) $2870.00. 29) Lima Enterprises purchased a depreciable asset for $29.000 on...
In 1993, Sheffield Company completed the construction of a building at a cost of $2,340,000 and first occupied it in January 1994. It was estimated that the building will have a useful life of 40 years and a salvage value of $69,600 at the end of that tim
In 1993, Sheffield Company completed the construction of a building at a
cost of $2,340,000 and first occupied it in January 1994. It was
estimated that the building will have a useful life of 40 years and a
salvage value of $69,600 at the end of that time. Early in 2004, an
addition to the building was constructed at a cost of $585,000. At that
time, it was estimated that the remaining life of the building would be,
as originally...
Total Revenue = $36,000,000 Total Non-capital costs = $32,400,000 Capital Equipment purchase Price and Original Market...
Total Revenue = $36,000,000 Total Non-capital costs = $32,400,000 Capital Equipment purchase Price and Original Market Value = $15,000,000 Equipment Salvage in percent = 2% Depreciable Life of the Capital, Years = 14 Annual return on capital invested in a similarly risky investment = 12% Accounting Annual Profit = $1,050,000 How would I calculate the economic profits using the average annual opportunity cost of the capital?
Assume Corbins ,Inc purchased an automated machine 5 years ago that had an estimated economic life of 10 years. The Automated Machines originally cost $300,000 and has been fully depreciated, leaving...
Assume Corbins ,Inc purchased an automated machine 5 years ago that had an estimated economic life of 10 years. The Automated Machines originally cost $300,000 and has been fully depreciated, leaving a current book value of $0. The actual market value of this drill press is $80,000. The company is considering replacing the automated machine with a new one costing $380,000. Shipping and installation charges will add an additional $10,000 to the cost. Corbins., Inc also has paid a sunk...
8 percent interest Initial cost End-of-useful life salvage value 2000 1000 Useful life, in years 126...
8 percent interest
Initial cost End-of-useful life salvage value 2000 1000 Useful life, in years 126 Pump A because it has a higher EUAC 2000 Useful life, In years 12 Pump A because it has a higher EUAC Pump A because it has a lower EUAC Pump B because it has a lower EUAC An answer cannot be computed because the useful life of the pumps is not the same Pump B because it has a higher EUAC pump should...
A project that cost $108000 has a useful life of 5 years and a salvage value...
A project that cost $108000 has a useful life of 5 years and a salvage value of $3000. The internal rate of return is 12% and the annual rate of return is 18%. The amount of the annual net income is $9990. $9450. $6660. $6300.
An asset has an installed cost of $1 million, a life of 10 years, a CCA...
An asset has an installed cost of $1 million, a life of 10 years, a CCA rate of 30%, and a salvage value of $30,000. What is the relevant present value of CCA tax shields from the lessee's point of view, if the lessee's marginal tax rate is 40% and borrowing cost is 12%?
28) When originally purchased, a vehicle costing $26.460 had an estimated useful life of 8 years and an estimated salvage value of $3500. After 4 years of straight-line depreciation, the asset's total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated salvage value. The depreciation expense in year 5 equals: A) S3038.00. B) $11,480.00. C) $5908.00. D) $5740.00 E) $2870.00. 29) Lima Enterprises purchased a depreciable asset for $29.000 on...
8 percent interest
Initial cost End-of-useful life salvage value 2000 1000 Useful life, in years 126 Pump A because it has a higher EUAC 2000 Useful life, In years 12 Pump A because it has a higher EUAC Pump A because it has a lower EUAC Pump B because it has a lower EUAC An answer cannot be computed because the useful life of the pumps is not the same Pump B because it has a higher EUAC pump should...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 11 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 11 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 11 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 11 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 11 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 11 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 11 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 11 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 11 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 11 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 11 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 11 months ago