Term Examination - Part 6

A company issued 50 bonds of Pl,000 face value each, redeemable at par at the end of 15 years. To accumulate the funds required for redemption, the firm established a sinking fund consisting of annual deposits, the interest rate of the fund being 4%. What was the principal in the fund at the end of the 12th year?

• P35,983.00
• B P38,378.00
• P41,453.00
• P37,519.00

A house and lot can be acquired a down payment of P500,000.00 and a yearly payment of Pl00,000 at the end of each year for a period of 10 years, starting at the end of 5 years from the date of purchase. If money is worth 14% compounded annually, what is the cash price of the property?

• P810,100.00
• P808,811.00
• P801,900.00
• P805,902.00

An asset is purchased for P9,000. Its estimated life is 10 years, after which it will be sold for Pl,000.00. Find the book value during the third year if the sum-of-the-years digit (SOYD) depreciation is used.

• P6100.00
• P4,500.00
• P5,072.00
• P4,800.00

A piece of machinery can be bought for P10,000 cash, or for P2000 down and payments of P750 per year for 15 years. What is the annual interest rate for the time payments?

• 4.61%
• 3.81%
• 5.71%
• 11.00%

A parent on the day the child is born wishes to determine what lump sum would have to be paid into an account bearing interest at 5% compound annually, in order to withdraw P20,000 each on the child’s 18th, 19th, 20th and 21st birthdays.

• P35,941.73
• P33,941.73
• P30,941.73
• P25,941.73

An car costs P6000. Annual costs are P400 the first year, P500 the second year, P600 the third year, and so on, increasing Pl00 each year. Use 10% to find the year in which the car should be replaced.

• 14
• 6
• 10
• 19

A hand tool costs P200 and requires P1.21 labor cost per unit. A machine tool costs P36OO and reduces labor to P0.75 What is the break-even point (in years) at 5% for an annual production of 4000 units?

• 1.99 yr
• 1.76 yr
• 2.34 yr
• 1.56 yr

An asset is purchased for P500,000. The salvage value in 25 years is Pl00,000. What are the depreciation in the first three years using straight line method?

• P48,000.00
• P24,000.00
• P32,000.00
• P16,000.00

A machine has an initial cost of P50,000 and a salvage value of P10,000 after 10 years. What is the book value after five years using straight line depreciation?

• P35,000.00
• P25,000.00
• Pl5,500.00
• P30,000.00

A company purchases an asset for P10,000 and plans to keep it for 20 years. If the salvage value is zero at the end of the 20th year, what is the depreciation in the third year? Use sum-of-the-years-digit depreciation.

• P1,000.00
• P857.00
• P937.00
• P747.00