Original Machine Sinitial cost = 94210 SAnnual depreciation = 10876 SPurchased 5 years ago SBook Value = 40321 Salvage today = 44139 Salvage in 5 years = 7684 •New Machine Sinitial cost = 200000 $5-year life Salvage in 5 years = 0 SCost savings = 80000 per year 53-year MACRS depreciation •Required return = 15% •Tax rate = 38% Shall we go and buy the new machine? submit the solution on Excel

Original Machine Sinitial cost = 94210 SAnnual depreciation = 10876 SPurchased 5 years ago SBook Value = 40321 Salvage today = 44139 Salvage in 5 years = 7684 •New Machine Sinitial cost = 200000 $5-year life Salvage in 5 years = 0 SCost savings = 80000 per year 53-year MACRS depreciation •Required return = 15% •Tax rate = 38% Shall we go and buy the new machine? submit the solution on Excel

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

1
Subject:
Please do not give solution in image format thanku
The concrete pavement requires $15,000 of repairs during years 12, 25 and 40 • The asphalt pavement requires $125,000 of repairs during years to, 20, 35 and 45 • The estimated capital cost of the concrete pavement is $980,l00• The estimated capital cost of the asphalt pavement is $850,000 • Assume interest rate = 4% • Assume no salvage value at the end of life. Find the PWF and LCC Please do fast asap
Please solve what is ask with complete handwritten solution, Thank you so much!
A 5-year project requires equipment costing $13,000. Tax law requires the use of straight-line depreciation on this type of equipment, and sets the maximum depreciation rate at 15% p.a. What is the book value of the equipment at the end of the project? Question 1Answer a. $3250 b. $2950 c. $3150 d. $0
Please help with answers asap
klp.7
am. 214.
Please see image for question to solve.
Subject: accounting
A company has purchased a machine (CCA rate 24%) at $300,000 and has a tax rate of 33.00%. By how much will the NPV change if the company is able to obtain a $13,000 salvage value for its machine at the end of the project's life in Year 4? Assume a discount rate of 11.20% and that all else remains the same. Question 10Answer a. $8,502 b. $10,415 c. -$1,913 d. $6,589 e. $10,075