Homework #8 Answers

1)

a)

P_{Total_Machine_1} = –$139,408

P_{Total_Machine_2} = –$133,040

b)

F_{Total_Machine_1} = –$285,383

F_{Total_Machine_2} = –$272,345

c)

A_{Total_Machine_1} = –$34,566 per year

A_{Total_Machine_2} = –$32,987 per year

Purchase Machine 2

2)

a)

P_{Total_Machine_1} = +$76,181

P_{Total_Machine_2} = +$70,272

b)

F_{Total_Machine_1} = +$134,960

F_{Total_Machine_2} = +$124,492

c)

A_{Total_Machine_1} = +$17,492 per year

A_{Total_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