Right, it is 21000 indeed, actually I meant 21000 (typo) but the months the actual months comes to 9.5 which gets round off to 10 since 9.5 months is not provided.
i.e. for 9 months, rental cost = 12,000 + 10,000 = 22,000
But salvage value = 21000, thus we have already exceeded salvage amount at the end of 9 months. We reach break-even at 8.5 months. We round off to 9 months.
i.e. for 9 months, rental cost = 12,000 + 10,000 = 22,000
But salvage value = 21000, thus we have already exceeded salvage amount at the end of 9 months. We reach break-even at 8.5 months. We round off to 9 months.
pmpnewster
Tue, 06/11/2013 - 07:23
Permalink
2) 9 months
2) 9 months
Kavitha Gopal
Tue, 06/11/2013 - 07:29
Permalink
12 Months?
Will it not be 12 months..? Do we have to consider Salvage amount?
san
Tue, 06/11/2013 - 07:48
Permalink
Answer is 10 months.Can
Answer is 10 months.
Can anyone provide explanation as how this value is arrived
cnppmp
Tue, 06/11/2013 - 12:37
Permalink
considering the salvage
considering the salvage factor of 25cents the equiment value at the end of the year would be 23000
So if you consider the 12000 and 16000 for rent and compute them with 23000, it falls in 10th month.
3000/ month = for 4 months =12000
2000/ month=for 8 months=16000
so, calculate by adding up the 2000 for each month on 12000, you would get the answer as 9 odd so it should be considered as 10 months.
Regards
CN Patil
pmpnewster
Tue, 06/11/2013 - 13:17
Permalink
How did you get a salvage
How did you get a salvage value of 23,000? Doesn't it come out to be 21,000 which would result in 9 months as the answer?
cnppmp
Tue, 06/11/2013 - 17:28
Permalink
Right, it is 21000 indeed,
Right, it is 21000 indeed, actually I meant 21000 (typo) but the months the actual months comes to 9.5 which gets round off to 10 since 9.5 months is not provided.
Regards
CN Patil
pmpnewster
Wed, 06/12/2013 - 01:28
Permalink
Money spent on rental:For
Money spent on rental:
For first 4 months=> 3000*4 = 12,000
For 5th to 9th months=> 2000*5 = 10,000
i.e. for 9 months, rental cost = 12,000 + 10,000 = 22,000
But salvage value = 21000, thus we have already exceeded salvage amount at the end of 9 months. We reach break-even at 8.5 months. We round off to 9 months.
Thus answer = 9 months, I feel.
Regards.
pmpnewster
Wed, 06/12/2013 - 01:29
Permalink
Money spent on rental:For
Money spent on rental:
For first 4 months=> 3000*4 = 12,000
For 5th to 9th months=> 2000*5 = 10,000
i.e. for 9 months, rental cost = 12,000 + 10,000 = 22,000
But salvage value = 21000, thus we have already exceeded salvage amount at the end of 9 months. We reach break-even at 8.5 months. We round off to 9 months.
Thus answer = 9 months, I feel.
Regards.
vmetha
Wed, 06/12/2013 - 03:40
Permalink
Other way to put in Equation
Other way to put in Equation would be
Equip cost end of year: 28000 * 75/100 = 21000
21000= 3000 * 4 + 2000* x
value of x= 4.5
so 4+4.5+ 9.5
As cnpmpm said...10 months..
pmpnewster
Wed, 06/12/2013 - 07:52
Permalink
Hi vmetha,Pls note... 4 + 4.5
Hi vmetha,
Pls note... 4 + 4.5 = 8.5. Hence, answer should 9 months.
bkthakkar
Wed, 06/12/2013 - 09:03
Permalink
Metha's calculation are
Metha's calculation are correct.
Typo error is generated. The answer is 9 Months