Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

The baltic company is considering the purchase of a new machine tool to replace an obsolete one. the machine being used for the operation has a tax book value of $80,000 with an annual depreciation expense of 8,000. it has a salvage value (resale value )of 40,000, is in good working order, and will last at least 10 more years. the proposed machine will perform the operation so much more efficiently that baltic engineers estimate that labor, material, and other direct costs of the operation will be reduced 60,000 a year if it is installed. the proposed machine costs 240,000 delivered and installed, and it's economic life is estimated at 10 years, with zero salvage value. the company expects to earn 14% on it's investment after taxes(14% is the firm's cost of capital). the tax rate is 40% and the firm uses straighline depreciation. Any gain or loss on the machine is subject to tax at 40 percent.

Should baltic buy the new machine?

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M948419

Have any Question? 


Related Questions in Accounting Basics

Accounting principles assignment-q1 smith catering service

Accounting Principles Assignment- Q1. Smith Catering Service completed the following transactions during its first month of operations for July 2016: a. Smith Catering Service commenced operations by receiving $12000 cas ...

Bond issuedetermine the valuation of long-term

Bond Issue Determine the valuation of long-term liabilities. Discussion Donald Lennon is the president, founder, and majority owner of Wichita Medical Corporation, an emerging medical technology products company. Wichita ...

Q1- chart of accountsinnerscape interiors is owned and

Q1- Chart of accounts Innerscape Interiors is owned and operated by Jackie Vargo, an interior decorator. In the ledger of Innerscape Interiors, the first digit of the account number indicates its major account classifica ...

Assignment- fraud in the accounting information systemfor

Assignment- Fraud in the Accounting Information System For this assignment, research the Internet or Strayer databases to locate a firm that was involved in a fraud and / or embezzlement case. Explain how the firm's acco ...

Stellar stores is a new company that started operations on

Stellar Stores is a new company that started operations on March 1, 2014. The company has decided to use a perpetual inventory system. The following purchase transactions occurred in March: Mar. 1 Stellar Stores purchase ...

Short paperyour customer has asked you to gather details to

Short Paper Your customer has asked you to gather details to meet IT audit requirements. You need to send them a report on IT audit objectives, risk assessment, and what help you may need from them to complete this task. ...

The balance of the 060 par common stock account for company

The balance of the $0.60 par Common Stock account for Company was $60,000 before its recent 3-for-1 stock split. The market price of the stock was $30 per share. What occurred as a result of the split? a. The par value p ...

Financial statement fraud and other types of fraudread the

Financial Statement Fraud and Other Types of Fraud Read the following problems and respond according to the instructions at the end. 1. How is fraud committed on behalf of an organization (such as financial statement fra ...

Assignment - journals ledger and trial balancethe following

Assignment - Journals, Ledger and Trial Balance The following transactions relates to Merlin Bruce, a sole trader, during his first month of business: Date Transaction details 01-Jan Started business by investing $25,000 ...

Practice questionsdescribe the treatment of administration

Practice questions: Describe the treatment of administration, selling and distribution overheads in calculating total unit cost.

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate