Five years ago you bought a widget-making machine for $1M. After all of the wonderful MACRS depreciation deductions, your adjusted basis was $250,000 when you sold it today for $1,200,000 (because of supply chain disruptions, its value had actually increased). What amount and character of gain will you recognize on today’s sale?
Q: PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $80…
A: a) Depreciation per year of the old machine =($80-$25)million / 5 = $11 million Book value of old…
Q: One year ago, your company purchased a machine used in manufacturing for $115,000. You have learned…
A: Net present value is the difference between the present value of cash inflows and present value of…
Q: a. What is the net cash flow at time 0 if the old equipment is replaced? Note: Negative amounts…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: You purchased a machine for $1.09 million three years ago and have been applying straight-line…
A: Purchase cost = $1,090,000 Life = 7 Years Used period = 3 years Tax rate = 0.22 Sale value =…
Q: One year ago, your company purchased a machine used in manufacturing for $100,000. You have learned…
A: The total present value of cash inflows and outflows is known as net present value, or NPV. To put…
Q: PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $120…
A:
Q: You purchased a machine for $1.09 million three years ago and have been applying straight-line…
A: Purchase cost = $1,090,000 Life = 7 Years Used period = 3 years Tax rate = 0.38 Sale value =…
Q: What is the sunk cost if the depreciation method is a straight-line method?
A: Sunk cost costs are those costs or expenses that already been spent and cannot be recovered.…
Q: what's the after-tax salvage value of the equipment, in millions of dollars?
A: Value of Equipment after-tax is the net of sale value and cost excluding tax charges on any gain.…
Q: PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $155…
A: Step 1: Calculate the depreciation as follows: Step 2: Calculate the book value of the asset as…
Q: PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $75…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $105…
A: Net present value is the present value of expected future cash flows, taking into account initial…
Q: PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $75…
A: a) Computation of Net Cash Flow at the time 0, if the old equipment is replaced is shown below:…
Q: You purchased a machine for $50,000, used it for 10 years, and then sold it for $5000. It cost $2000…
A: The difference between the current value of cash inflows and outflow of cash over a period of time…
Q: PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $85…
A: Net present value determines the profitability of the project by using discounting cash flows and…
Q: What is the expected after-tax cash flow from selling a piece of equipment if XYZ purchases the…
A: Deprecation is that amount which is incurred due to wear & tear and usage of the assets It is…
Q: One year ago, your company purchased a machine used in manufacturing for $100,000. You have learned…
A: The total present value of cash inflows and outflows is known as net present value, or NPV. To put…
Q: One year ago, your company purchased a machine used in manufacturing for $95,000. You have learned…
A: Net present value refers to the method used in capital budgeting for calculating the difference…
Q: You purchased a machine for $1.17 million three years ago and have been applying straight-line…
A: Straight Line depreciation= (Costs-Salvage Value)/Useful Lif= (1170000-0)/7= $…
Q: One year ago, your company purchased a machine used in manufacturing for $95,000. You have learned…
A: We will first compute the after-tax cash inflow from the sale of the old asset. Then we will deduct…
Q: You purchased a machine for $1.04 million three years ago and have been applying straight-line…
A: Purchase cost = $1,040,000 Life = 7 Years Used period = 3 years Tax rate = 0.22 Sale value =…
Q: 6 years ago, your company purchased a lot of land for $769203 . You received an offer to purchase…
A: Implied return will be calculated using formula : Return = Future value Present…
Q: PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $140…
A: a.Cost of old machine = $140 million Salvage value = $20 million Useful life = 5 years Sale value =…
Q: Three years ago, your firm bought a new machine for $3,000. The machine was depreciated on a…
A: Remaininglife=6years−3years=3YearsBookvalue=(Purchaseprice)∗Remaininglife/Totallife.=($3,000)∗3/6.=$…
Q: One year ago, your company purchased a machine used in manufacturing for $105,000. You have learned…
A: Additional Considerations:This analysis takes just financial issues into account. When choosing a…
Q: One year ago, your company purchased a machine used in manufacturing for $110 000. You have learned…
A: The process that analyzes and evaluates any project or investment's feasibility and profitability is…
Q: You purchased a machine for $1.19 million three years ago and have been applying str for a…
A: In straight line method of depreciation there is uniform annual depreciation is applied over the…
Q: PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $105…
A: Step 1:a)New asset cost = 240Old asset book value = 105 - (2*(105-10)/5) = 67After tax profit on old…
Q: One year ago, your company purchased a machine used in manufacturing for $110.000 You have leamed…
A: Net present value helps in capturing the value associated with the investment opportunity. It is…
Q: One year ago, your company purchased a machine used in manufacturing for $95,000. You have learned…
A: The term "replacement of a machine" describes the process of replacing an outdated machine or piece…
Q: C Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $75…
A: It is the present worth of the project's annual cash flows and the initial cost. If the NPV of the…
Q: The first question: An investor saves annually an amount of money amounting to A with an annual…
A: A study that proves that the future worth of the money is lower than its current value due to…
Q: None
A: Step 1:Cost of new machine= 140,000Salvage value of the old machine = 50,000 Initial cash outlay…
Q: PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $105…
A: Old equipment cost $105.00Useful life5Salvage value15 Selling price of old equipment $80Cost price…
Q: Ms. Berry is employed as an Accounts Manager in the Jamaican company
A: As per IRS rules directors sitting fees are not wages or salaries but are generally self…
Q: You bought a car 5 years ago for $30,000. This type of car is known to depreciate at a compounded…
A: Solution:- Depreciation is the wear and tear cost of using an asset.
Q: wo years ago, your company purchased a machine used in manufacturing for RM140,000. Although the…
A: Cost of Machine = RM140,000 Cost of new machine = RM150,000 Cost of shipping on new machine =…
Q: One year ago, your company purchased a machine used in manufacturing for $10 nachine is available…
A: NPV can be found as difference between present value of cash flow and initial investment and it…
Q: You are considering two options for manufacturing a typical product: You continue to use an old…
A:
Q: a. What is the net cash flow at time O if the old equipment is replaced? (Negative amounts should be…
A: NPV: It is the present worth of the project's annual cash flows and the initial cost. If the NPV of…
Q: The NPV of replacing the year-old machine is $ (Round to the nearest dollar.) Should your company…
A: To determine the NPV of replacing the year old machine, we first need to determine the relevant…
Q: A You have an opportunity to acquire a property from First Capital Bank. The bank recently obtained…
A: Future value of a present value is the value of that amount after taking into account the time value…
Q: Two years ago, your company purchased a machine used in manufacturing for RM140,000. Although the…
A: Initial cash outflow : It includes price of equipment purchase , shipping charges , net working…
Q: One year ago, your company purchased a machine used in manufacturing for $90,000. You have learned…
A: NPV of replacement is the difference between the present value of benefits and the cost of…
Five years ago you bought a widget-making machine for $1M. After all of the wonderful MACRS
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- 3-39 CVP analysis, medical sector. Yahama Medical Centre operates a medical surgery in Japan that specializes in the diagnosis and treatment of hay fever allergies. The firm's budget for next year is as follows: Number of beds available In-patient days In-patient fees 80 per day 26,000 per annum ¥1,300,000 Variable Costs Fixed Costs Total Costs Direct supplies ¥ 100,000 ¥ 100,000 Direct salaries Patient service O/H Administration Total costs 800,000 800,000 58,000 ¥102,000 160,000 108,000 ¥1,066,000 150,000 ¥252,000 258,000 ¥1,318,000 1. Calculate the contribution margin ratio. 2. Compute the breakeven point in both in-patient days and in-patient fees. 3. Compute the margin of safety ratio if the clinic operates at full capacity. 4. Suppose the direct salaries were increased to ¥826,000 and total variable costs increased to ¥1,092,000, compute the breakeven point in in-patient days if all matters not specified remain the same. 5. Suppose the fixed patient service overheads increase to…You purchased a machine for $1.19 million three years ago and have been applying straight-line depreciation to zero for a seven-year life. Your tax rate is 22%. If you sell the machine today (after three years of depreciation) for $701,000, what is your incremental cash flow from selling the machine? Your total incremental cash flow will be $ (Round to the nearest cent.)You just bought a new piece of farm machinery for $100,000. You expect the machinery to have a useful, economic life of five years, and you account the asset's depreciation to be $18,000 using the straight-line depreciation methods How much is the salvage value for this asset? O $50,000 O $5000 O $15,000 $10,000
- PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $140 million on equipment with an assumed life of 5 years and an assumed salvage value of $25 million for tax purposes. The firm uses straight-line depreciation. The old equipment can be sold today for $100 million. A new modem pool can be installed today for $210 million. This will have a 3-year life and will be depreciated to zero using straight-line depreciation. The new equipment will enable the firm to increase sales by $30 million per year and decrease operating costs by $12 million per year. At the end of 3 years, the new equipment will be worthless. Assume the firm’s tax rate is 30% and the discount rate for projects of this sort is 12%. Required: a. What is the net cash flow at time 0 if the old equipment is replaced? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) b. What are…PC Shopping Network may upgrad its modem pool. It last upgraded 2 years ago, when it spent $80 million on equipment with an assumed life of 5 years and an assumed salvage value of $25 million for tax purposes. The firm uses straight-line depreciation. The old equipment can be sold today for $70 million. A new modem pool can be installed today for $150 million. This willhave a 3-year life and will be depreciated to zero using straight-line depreciation. The new equipment will enable the firm to increase sales by $25 million per year and decrease operating costs by $12 million per year. At the end of 3 years, the new equipment will be worthless. Assume the firm's tax rate is 30% and the discount rate for projects of this sort is 15%. Required: a. What is the net cash flow at time 0 if the old equipment is replaced?(Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) b. What are the…You purchased a machine for $1.13 million three years ago and have been applying straight-line depreciation to zero for a seven-year life. Your tax rate is 40%. If you sell the machine today (after three years of depreciation) for $710,000, what is your incremental cash flow from selling the machine?
- Economics Can you solve it manually, please.? A bank purchased a new computer information system which cost them $350,000. Suppose this is considered a 5-year MACRS property. The system can be salvaged for about $40,000 at the end of ten years. (a) What are the annual depreciation values for tax purposes over the system's useful life? (b) What is its book value at the end of year 2 for tax purposes?PC Shopping Network may upgrade its modem pool. It last upgraded 1 year ago, when it spent $114 million on equipment with an assumed life of 4 years and an assumed salvage value of $22 million for tax purposes. The firm uses straight-line depreciation. The old equipment can be sold today for $86 million. A new modem pool can be installed today for $156 million. This will have a 3-year life, and will be depreciated to zero using straight-line depreciation. The new equipment will enable the firm to increase sales by $15 million per year and decrease operating costs by $12 million per year. At the end of 3 years, the new equipment will be worthless. Assume the firm's tax rate is 35% and the discount rate for projects of this sort is 13%. (Enter your answers in millions. For example, an answer of $13,000,000 should be entered as 13. Use minus sign to enter cash outflows, if any.)One year ago, your company purchased a machine used in manufacturing for $107,800. You have learned that a new machine is available that offers many advantages and you can purchase it for $170,000 today. It will be depreciated on a straight-line basis over 10 years and has no salvage value. You expect that the new machine will produce a gross margin (revenues minus operating expenses other than depreciation) of $35,000 per year for the next 10 years. The current machine is expected to produce a gross margin of $22,000 per year. The current machine is being depreciated on a straight-line basis over a useful life of 11 years, and has no salvage value, so depreciation expense for the current machine is $9,800 per year. The market value today of the current machine is $60,000. Your company's tax rate is 30%, and the opportunity cost of capital for this type of equipment is 11%. Should your company replace its year-old machine? The NPV of replacing the year-old machine is $ (Round to the…
- PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $115 million on equipment with an assumed life of 5 years and an assumed salvage value of $15 million for tax purposes. The firm uses straight-line depreciation. The old equipment can be sold today for $80 million. A new modem pool can be installed today for $150 million. This will have a 3-year life and will be depreciated to zero using straight-line depreciation. The new equipment will enable the firm to increase sales by $25 million per year and decrease operating costs by $10 million per year. At the end of 3 years, the new equipment will be worthless. Assume the firm’s tax rate is 30% and the discount rate for projects of this sort is 10%. Required: a. What is the net cash flow at time 0 if the old equipment is replaced? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) b. What are the…A cyber is planning on replacing its existing computers, which were purchased 2 years ago at a cost of $16.500. They could be sold today at $12.500. The depreciation period of this system is 5 years from the date of its purchase. New PCs could be bought for $18.000. Asume a 25% tax rate over profits. Calculate the book value of the old PCs Calculate the after-tax proceeds of its sale for $12.500 Calculate the initial investment associated with the replacement project.One year ago, your company purchased a machine used in manufacturing for $95,000. You have learned that a new machine is available that offers many advantages and you can purchase it for $150,000 today. It will be depreciated on a straight-line basis over 10 years and has no salvage value. You expect that the new machine will produce a gross margin (revenues minus operating expenses other than depreciation) of $40,000 per year for the next 10 years. The current machine is expected to produce a gross margin of $25,000 per year. The current machine is being depreciated on a straight-line basis over a useful life of 11 years, and has no salvage value, so depreciation expense for the current machine is $8,636 per year. The market value today of the current machine is $45,000. Your company's tax rate is 35%, and the opportunity cost of capital for this type of equipment is 11%. Should your company replace its year-old machine? The NPV of replacing the year-old machine is $ (Round to the…
