The Wet Corporation contemplates the replacement of an old machinery.

The annual
cost of operating the old machinery is P138,600, excluding depreciation, while the
estimate for the new machinery is P91,300. The cost of the new machinery is P160,000,
net of the trade-in allowance, with an estimated useful life of 8 years, no residual value.
The effective income tax rate of 40% and the cost of capital is 8%. The old machinery
has an annual deprecation of P15,000 while the new machinery is estimated to have an
annual depreciation of P20,000. The book value of the old machinery is zero.
Required.

 Payback period. (Indicate in years. Example 3.25 years)

1.74

 
IncorrectQuestion 2
0 / 1 pts
The Wet Corporation contemplates the replacement of an old machinery. The annual
cost of operating the old machinery is P138,600, excluding depreciation, while the
estimate for the new machinery is P91,300. The cost of the new machinery is P160,000,
net of the trade-in allowance, with an estimated useful life of 8 years, no residual value.
The effective income tax rate of 40% and the cost of capital is 8%. The old machinery
has an annual deprecation of P15,000 while the new machinery is estimated to have an
annual depreciation of P20,000. The book value of the old machinery is zero.
Required.

 Payback reciprocal

57%

 
IncorrectQuestion 3
0 / 1 pts
The Wet Corporation contemplates the replacement of an old machinery. The annual
cost of operating the old machinery is P138,600, excluding depreciation, while the
estimate for the new machinery is P91,300. The cost of the new machinery is P160,000,
net of the trade-in allowance, with an estimated useful life of 8 years, no residual value.
The effective income tax rate of 40% and the cost of capital is 8%. The old machinery
has an annual deprecation of P15,000 while the new machinery is estimated to have an
annual depreciation of P20,000. The book value of the old machinery is zero.
Required.

 Accounting rate of return on original investment

 57.6%

 
IncorrectQuestion 4
0 / 1 pts
The Wet Corporation contemplates the replacement of an old machinery. The annual
cost of operating the old machinery is P138,600, excluding depreciation, while the
estimate for the new machinery is P91,300. The cost of the new machinery is P160,000,
net of the trade-in allowance, with an estimated useful life of 8 years, no residual value.
The effective income tax rate of 40% and the cost of capital is 8%. The old machinery
has an annual deprecation of P15,000 while the new machinery is estimated to have an
annual depreciation of P20,000. The book value of the old machinery is zero.
Required.

 Accounting rate of return on  average investment..

1.15%

 
IncorrectQuestion 5
0 / 1 pts
The Wet Corporation contemplates the replacement of an old machinery. The annual
cost of operating the old machinery is P138,600, excluding depreciation, while the
estimate for the new machinery is P91,300. The cost of the new machinery is P160,000,
net of the trade-in allowance, with an estimated useful life of 8 years, no residual value.
The effective income tax rate of 40% and the cost of capital is 8%. The old machinery
has an annual deprecation of P15,000 while the new machinery is estimated to have an
annual depreciation of P20,000. The book value of the old machinery is zero.
Required.

 Net present value. (do not include 000 separator. Example: 91263)

24000

 
IncorrectQuestion 6
0 / 1 pts
The Wet Corporation contemplates the replacement of an old machinery. The annual
cost of operating the old machinery is P138,600, excluding depreciation, while the
estimate for the new machinery is P91,300. The cost of the new machinery is P160,000,
net of the trade-in allowance, with an estimated useful life of 8 years, no residual value.
The effective income tax rate of 40% and the cost of capital is 8%. The old machinery
has an annual deprecation of P15,000 while the new machinery is estimated to have an
annual depreciation of P20,000. The book value of the old machinery is zero.
Required.

 Profitability index.

1.5

 
IncorrectQuestion 7
0 / 1 pts
The Wet Corporation contemplates the replacement of an old machinery. The annual
cost of operating the old machinery is P138,600, excluding depreciation, while the
estimate for the new machinery is P91,300. The cost of the new machinery is P160,000,
net of the trade-in allowance, with an estimated useful life of 8 years, no residual value.
The effective income tax rate of 40% and the cost of capital is 8%. The old machinery
has an annual deprecation of P15,000 while the new machinery is estimated to have an
annual depreciation of P20,000. The book value of the old machinery is zero.
Required.

 Net present value index

16000

 
IncorrectQuestion 8
0 / 3 pts
The Wet Corporation contemplates the replacement of an old machinery. The annual
cost of operating the old machinery is P138,600, excluding depreciation, while the
estimate for the new machinery is P91,300. The cost of the new machinery is P160,000,
net of the trade-in allowance, with an estimated useful life of 8 years, no residual value.
The effective income tax rate of 40% and the cost of capital is 8%. The old machinery
has an annual deprecation of P15,000 while the new machinery is estimated to have an
annual depreciation of P20,000. The book value of the old machinery is zero.
Required.

 Internal rate of return. (3 points)

16.2

Cash Inflows-Cash outflows