question archive Ethane gas, C2H6, burns according to the reaction below
Ethane gas, C2H6, burns according to the reaction below
Subject:FinancePrice:3.87 Bought7
Ethane gas, C2H6, burns according to the reaction below. How many
grams of oxygen react if 65
H Corp recently purchased a new delivery truck. The new truck has a cost of $56250 and is expected to generate after tax cash flows including depreciation of $15625 per year. The truck has a five year expected life. The expected year end abandonment Values (Salvage Value after tax adjustments) for the truck are given below. The company’s cost of capital is 11%
Year Annual operating CF Abandonment Value
0 (56250) ----
1 15,625 43750
2 15,625 35000
3 15,625 27500
4 15,625 12500
5 15,625 0
Should the truck operate until the end of its 5 year life? If not what is the optimal economic life of the truck?
A) 1 year
B) 2 years
C) 3 years
D) 4 years
E) 5 years
.0 grams of ethane gas react?
2C2H6 (g) + 7O2 (g) --> 4CO2 (g) + 6H2O (g)
2) A student is trying to compress the gas in a cylinder that has an
initial volume of 1000 cm3 and a pressure of 100 kPa. The student decreases the volume by 500 cm3. What is the pressure of the gas in the cylinder?
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Ans) c) 3 Years
We need to find which alternative will have highest Equivalent annual benefit
Statement showing Equivalent annual benefit if machine is kept for 1 year
| Particulars | 0 | 1 | Total |
| Cost | -56250 | ||
| Annaul operating Cash flow | 15625 | ||
| Abandonment Value | 43750 | ||
| Total cash flow | -56250 | 59375 | |
| PVIF @ 11% | 1.0000 | 0.9009 | |
| PV | -56250 | 53490.99 | -2759.01 |
| PVIF(11%,1) | 0.9009 | ||
| Equivalent Annual Benefit | -3062.5 |
Thus Equivalent Annual Benefit = -3062.5 $
Statement showing Equivalent annual benefit if machine is kept for 2 year
| Particulars | 0 | 1 | 2 | Total |
| Cost | -56250 | |||
| Annaul operating Cash flow | 15625 | 15625 | ||
| Abandonment Value | 35000 | |||
| Total cash flow | -56250 | 15625 | 50625 | |
| PVIF @ 11% | 1.0000 | 0.9009 | 0.8116 | |
| PV | -56250 | 14076.58 | 41088.39 | -1085.04 |
| PVIF(11%,1) | 1.7125 | |||
| Equivalent Annual Benefit | -633.59 |
Thus Equivalent Annual Benefit = -633.59 $
Statement showing Equivalent annual benefit if machine is kept for 3 year
| Particulars | 0 | 1 | 2 | 3 | Total |
| Cost | -56250 | ||||
| Annaul operating Cash flow | 15625 | 15625 | 15625 | ||
| Abandonment Value | 27500 | ||||
| Total cash flow | -56250 | 15625 | 15625 | 43125 | |
| PVIF @ 11% | 1.0000 | 0.9009 | 0.8116 | 0.7312 | |
| PV | -56250.00 | 14076.58 | 12681.60 | 31532.63 | 2040.81 |
| PVIF(11%,3) | 2.4437 | ||||
| Equivalent Annual Benefit | 835.12 |
Thus Equivalent Annual Benefit = 835.12 $
Statement showing Equivalent annual benefit if machine is kept for 4 year
| Particulars | 0 | 1 | 2 | 3 | 4 | Total |
| Cost | -56250 | |||||
| Annaul operating Cash flow | 15625 | 15625 | 15625 | 15625 | ||
| Abandonment Value | 12500 | |||||
| Total cash flow | -56250 | 15625 | 15625 | 15625 | 28125 | |
| PVIF @ 11% | 1.0000 | 0.9009 | 0.8116 | 0.7312 | 0.6587 | |
| PV | -56250.00 | 14076.58 | 12681.60 | 11424.87 | 18526.81 | 459.85 |
| PVIF(11%,4) | 3.1024 | |||||
| Equivalent Annual Benefit | 148.22 |
Thus Equivalent Annual Benefit = 148.22 $
Statement showing Equivalent annual benefit if machine is kept for 5 year
| Particulars | 0 | 1 | 2 | 3 | 4 | 5 | Total |
| Cost | -56250 | ||||||
| Annaul operating Cash flow | 15625 | 15625 | 15625 | 15625 | 15625 | ||
| Abandonment Value | |||||||
| Total cash flow | -56250 | 15625 | 15625 | 15625 | 15625 | 15625 | |
| PVIF @ 11% | 1.0000 | 0.9009 | 0.8116 | 0.7312 | 0.6587 | 0.5935 | |
| PV | -56250.00 | 14076.58 | 12681.60 | 11424.87 | 10292.67 | 9272.68 | 1498.39 |
| PVIF(11%,5) | 3.6959 | ||||||
| Equivalent Annual Benefit | 405.42 |
Thus Equivalent Annual Benefit = 405.42 $
Thus in year 3 Equivalent Annual Benefit is highest and hence 3 years is economical life of machine
Note : Equivalent Annual Benefit = Total of PV / PVIFA
