Question 3 Heymann Manufacturing recently purchased a new machine for $350,000. It cost $20,000 to ship the machine to Heymann's facility, and it cost another $50,000 to get it installed. Purchase of the new machine will require Heymann to increase its working capital by $25,000 (spare parts inventory). If the new machine falls into the MACRS 3-year class, what amount will the firm be able to depreciate during the next five years? (The MACRS rates for 3- year class are Year 1: 33 %, Year 2: 45%, Year 3 : 15%, Year 4: 7%.)
Question 3 Heymann Manufacturing recently purchased a new machine for $350,000. It cost $20,000 to ship the machine to Heymann's facility, and it cost another $50,000 to get it installed. Purchase of the new machine will require Heymann to increase its working capital by $25,000 (spare parts inventory). If the new machine falls into the MACRS 3-year class, what amount will the firm be able to depreciate during the next five years? (The MACRS rates for 3- year class are Year 1: 33 %, Year 2: 45%, Year 3 : 15%, Year 4: 7%.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Question 3
Heymann Manufacturing recently purchased a new machine for $350,000.
It cost $20,000 to ship the machine to Heymann's facility, and it cost another $50,000 to get it
installed. Purchase of the new machine will require Heymann to increase its working capital by
$25,000 (spare parts inventory). If the new machine falls into the MACRS 3-year class, what
amount will the firm be able to depreciate during the next five years? (The MACRS rates for 3-
year class are Year 1: 33% , Year 2: 45%, Year 3: 15%, Year 4: 7%.)
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