Homework #8 Answers

 

1)

a)

PTotal_Machine_1 = $139,408

PTotal_Machine_2 = $133,040

b)

FTotal_Machine_1 = $285,383

FTotal_Machine_2 = $272,345

c)

ATotal_Machine_1 = $34,566 per year

ATotal_Machine_2 = $32,987 per year

 

Purchase Machine 2

 

 

2)

a)

PTotal_Machine_1 = +$76,181

PTotal_Machine_2 = +$70,272

b)

FTotal_Machine_1 = +$134,960

FTotal_Machine_2 = +$124,492

c)

ATotal_Machine_1 = +$17,492 per year

ATotal_Machine_2 = +$16,135 per year

 

Purchase Machine 1

 

3)

a) SLD

In the second year the company can depreciate $19,950

The book value after 3 years is $111,350

 

b) SYD

In the second year the company can depreciate $30,411

The book value after 3 years is $78,767