A company wants to replace the old equipment. The following data are provided during January 1,...
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A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment Purchase price of P1,500,000 • Freight and installation, P10,000. • Acquisition date - January 2.2016 Useful life of 10 years • Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2.000.000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30.000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% • Compute for the net initial investment A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 • Freight and installation, P10,000 • Acquisition date - January 2,2016 • Useful life of 10 years • Depreciation method Straight line (across all types of assets) • Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12.000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period -6 years ARR based on average investment -10% Compute for the net cash flow annually Question 3 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the net income annually 2 pts Question 4 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years ● Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment 10% Compute for the payback period. Round off to two decimal places 2 pts Question 5 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 ● Salvage Value P100,000 Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the computed payback period? Type ACCEPT or REJECT 2 pts Question 6 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 • Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute for the ARR based on initial investment. Round off to two decimal places. No need to put the percent sign ● 2 pts Question 7 A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% Compute the ARR based on average investment. Round off to two decimal places. No need to put the percent sign 2 pts Question A company wants to replace the old equipment. The following data are provided during January 1, 2022: Old equipment • Purchase price of P1,500,000 Freight and installation, P10,000 Acquisition date - January 2,2016 • Useful life of 10 years Depreciation method Straight line (across all types of assets) Salvage Value, P120,000 ● ● ● New Equipment • Purchase price of P2,000,000 • One-time training cost P15,000 Freight and installation P10,000 Salvage Value P100,000 • Useful life 11 years Old equipment will be sold for P250,000 and repair expense for the old equipment will be avoided amounting to P150,000 32% tax rate is applied by the company The new equipment will be able to produce 12,000 units per year. Each unit is sold by the company for P50.00 and variable cost is P12.00 per unit. Other non-manufacturing expenses are as follows: Fixed costs, P30,000 Variable costs, P25,000 ● Industry standards are as follows: Payback period - 6 years ARR based on average investment - 10% • Will you accept or reject the capital investment project based on the ARR (based on average investment)? Type ACCEPT or REJECT 2 pts
Expert Answer:
Answer rating: 100% (QA)
1 To compute the net initial investment we need to calculate the initial cash outflows and inflows related to the purchase and sale of the old equipment and the purchase of the new equipment Initial C... View the full answer
Related Book For
Management Accounting
ISBN: 9781760421144
7th Edition
Authors: Kim Langfield Smith, Helen Thorne, David Alan Smith, Ronald W. Hilton
Posted Date:
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