The surface area of a certain plant requires painting

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2-24. the surface area of a certain plant requires painting is 8,000 sq. ft. Two kinds of paint are available whose brands are A and B. Paint A cost P 1.40 per sq. ft. but needs renewal at the end of 4 yrs., while paint B cost P 1.80 per sq. ft. If money is worth 12% effective, how often should paint B be renewed so that it will be economical as point A? Given: A=surface area of the plant (8,000 sq. ft.) For paint A: P 1.40 per sq. ft. = 4 yrs. For paint B P 1.80 per sq. ft. Solution: Cost of renewal for paint A:         Let         –         
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In order to be economical as Paint A,  –           Answer: 5.58 years 2-25. A contract has been signed to lease a building at P20,000 per year with an annual increase of P1,500 for 8 years. Payments are to be made at the end of each year, starting one year from now. The prevailing interest rate is 7%. What lump sum paid today would be equivalent to the 8-year lease- payment plan? Given: A= P20,000 G= P1,500 n=8years i=7% Solution:                                   Answer: P147,609.3773
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CHAPTER 3 Depreciation Solved Supplementary Problems 3-1. A machine shop purchased 10 years ago a milling machine for P 60,000. A straight-line depreciation reserve had been provided based on a 20-year life of the machine. The owner of the machine shop desires to replace the old milling machine with a modern unit having many advantages costing P100,000. It can sell the old unit for P 20, 000. How much new capital will be required for the purchase? Solution: Assume that no scrap value at the end of 20 years, Cn = 0. The depreciation d of a milling machine with an srcinal cost C o of P60, 000 10 years ago having a machine life of 20 years is d =   , d =   = P3,000.00 After 10 years, the depreciation  would be D 10 = 10d = 10 (P3,000.00) = P30,000.00 and the total amount available would be Total Amount Available = P30, 000.00 + P20, 000 = P50, 000 Therefore the new capital required would be the difference of the cost of the modern unit and the total amount available for the purchase of the milling machine New Capital Required = P100, 000 - P50, 000 New Capital Required = P50, 000 3-2. A tax and duty free importation of a 30-horsepower sand mill for paint manufacturing costs
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