Whole Foods, the world's leader in natural and organic foods, has more than 310 stores and 62,000employees in North America and the United Kingdom. A new store is being built in San Antonio, Texas,at the Vineyard shopping center. A commercial oven for $9,618 with a 6-year life and residual value of$1,260 was purchased for the store. What is the depreciation expense in year 2 for the oven? Use thestraight-line method.Depreciation expense$

The straight-line depreciation method is used depreciation methods to allocate the cost of an…

Answered: Whole Foods, the world's leader in…

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

See similar textbooks

Similar questions

DuPree Coffee Roasters, Inc., wishes to expand and modernize its facilities. The installed cost of a proposed computer-controlled automatic-feed roaster will be $135,000. The firm has a chance to sell its 5-year-old roaster for $34,000. The existing roaster originally cost $60,500 and was being depreciated using MACRS and a 7-year recovery period (see the table attached). DuPree is subject to a 21% tax rate. a. What is the book value of the existing roaster? b. Calculate the after-tax proceeds of the sale of the existing roaster. c. Calculate the change in net working capital using the following figures: Anticipated Changes in Current Assets and Current Liabilities Accruals −$19,500 Inventory +50,000 Accounts payable +40,900 Accounts receivable +70,200 Cash 0 Notes payable +14,400
Parker & Stone, Incorporated, is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land six years ago for $7.4 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities elsewhere. If the land were sold today, the company would net $10.2 million. The company now wants to build its new manufacturing plant on this land; the plant will cost $21.4 million to build, and the site requires $890,000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project? Note: Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to the nearest whole number, e.g., 1,234,567. Answer is complete but not entirely correct. Cash flow $ 32,490,000 x
White Oaks Properties builds strip shopping centers and small malls. The company plans to replace its refrigeration, cooking, and HVAC equipment with newer models in one entire center built 10 years ago. 10 years ago, the original purchase price of the equipment was $700,000 and the operating cost has averaged $220,000 per year. Determine the equivalent annual cost of the equipment if the company can now sell it for $224,000. The company's MARR is 17% per year. The equivalent annual cost of the equipment is determined to be $
King Frost produces and sells ice cream, gelato and sorbet. The following information is available:• Inspection of several invoices from ingredient suppliers indicate that the ingredients per litre costs on average $0.90. • The production machines were purchased six years ago for a total purchase price of $305,000. The machines are depreciated on a straight-line basis and have an estimated useful life of 12 years with a total scrap value of $21,800. • Wage records show that wages and on-costs for production employees are $0.002 per litre. • The sales team is paid a total of $5,000 per month and commission of 0.001 per litre sold. • Electricity costs associated with the factory are $5,000 per month plus an average of $0.01 per litre. • Payroll records show the engineers’ and factory supervisors’ salaries total $62,000 per month. • Monthly depreciation on factory building is $25,000. • The machines are maintained twice each month. The cost per maintenance…
DuPree Coffee Roasters, Inc., wishes to expand and modernize its facilities. The installed cost of a proposed computer-controlled automatic-feed roaster will be $130,000. The firm has a chance to sell its 4-year-old roaster for $35,000. The existing roaster originally cost $60,000 and was being depreciated using MACRS and a 7-year recovery period Percentage by recovery year* Recovery year 3 years 5 years 7 years 10 years 1 33% 20% 14% 10% 2 45% 32% 25% 18% 3 15% 19% 18% 14% 4 7% 12% 12% 12% 5 12% 9% 9% 6 5% 9% 8% 7 9% 7% 8 4% 6% 9 6% 10 6% 11 4% Totals 100% 100% 100% 100% DuPree is subject to a 21%tax rate. a. What is the book value of the existing roaster? b. Calculate the after-tax…
Yummy Food is expanding its business and wants to open a new facility to make frozen lasagna, which requires a new automated lasagna maker. A lasagna maker can be purchased for $350,000 or leased under a finance lease over 7 years, with lease payments to be made at the beginning of each year. If the company purchases the lasagna maker, it can be fully depreciated to zero using the straight-line method over seven years. The management expects the scrap/residual value of the lasagna maker to be $60,000 at the end of the lease. After a detailed analysis of the project, Yummy Food determines the appropriate after-tax cost of capital of the project to be 15% per annum. Yummy Food pays a corporate tax rate of 28% and it can borrow funds at a before-tax interest rate of 5% per annum. All cash-flows have been quoted on a before-tax basis. Given this information, what is the lease payment (per annum) that would make Yummy Food indifferent between leasing and borrow-to-buy the machine? (Using…
[The following information applies to the questions displayed below.] Kate's Candy Corporation makes chewy chocolate candies at a plant in Winston-Salem, North Carolina. Steve Bishop, the production manager at this facility, Installed a packaging machine last year at a cost of $500,000. This machine is expected to last for 10 more years with no residual value. Operating costs for the projected levels of production, before depreciation, are $100,000 annually. 1. Steve has just learned of a new packaging machine that would work much more efficiently in the production line. This machine would cost $580,000 Installed, but the annual operating costs would be only $40,000 before depreciation. This machine would be depreciated over 10 years with no residual value. He could sell the current packaging machine this year for $250,000. equired: What is the estimated net present value of purchasing the new machine? (Do not round Intermediate calculation. Round your nswers to the nearest whole…
Pomeral & Sons currently produces patio umbrellas and is considering expanding its operations to include tents for automobiles and travel trailers. The company owns land beside its current manufacturing facility that could be used for the expansion. The company bought this land 5 years ago at a cost of $310,981. At the time of purchase, the company paid $33,000 to level out the land so it would be suitable for future use. Today, the land is valued at $295,000. The company has some unused equipment that it owns currently valued at $39,765. This equipment could be used for producing tents if $12,000 is spent for equipment modifications. Other equipment costing $487,162 will also be required. What is the amount of the initial cash flow for this expansion project? (express your answer as a positive number)
Nikul
Waterway Inc. manufactures snowsuits. Waterway is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased five years ago at a price of $1.8 million; six months ago, Waterway spent $55,000 to keep it operational. The existing sewing machine can be sold today for $243,257. The new sewing machine would require a one-time, $85,000 training cost. Operating costs would decrease by the following amounts for years 1 to 7: Year 1 $390,900 2 399,900 3 410,400 4 425,200 5 432,600 435,300 7 437,700 The new sewing machine would be depreciated according to the declining-balance method at a rate of 20%. The salvage value is expected to be $379,700. This new equipment would require maintenance costs of $98,400 at the end of the fifth year. The cost of capital is 9%. Click here to view PV table. Use the net present value method to determine the following: (If net present value is negative then enter with negative sign preceding the number e.g. -45 or…
Mikayla Bhd is a company that produces fresh pineapple juice. During the year, the company bought two machines to assist in producing pineapple juice. Machine A was purchased in 2 January 2021 with a cost of RM600,000. The machine is expected to be used for ten years with RM9,000 scrap value. Machine B was bought in 10 August 2021 with a cost of RM819,000. The expected useful life of Machine B is five years. Machine A is depreciated based on yearly basis and Machine B is depreciated based on monthly basis. It is the company’s policy to depreciate assets using the Straight-Line Method. Calculate the depreciation value of Machine A and Machine B for the year ended 2021.
Oriole Inc. manufactures snowsuits. Oriole is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased 5 years ago at a price of $1.8 million; six months ago, Oriole spent $55,000 to keep it operational. The existing sewing machine can be sold today for $211,855. The new sewing machine would require a one-time, $85,000 training cost. Operating costs would decrease by the following amounts for years 1 to 7: Year 1 2 3 4 5 6 7 $390,600 399,400 411,000 425.900 432,000 434,600 436,400 The new sewing machine would be depreciated according to the declining-balance method at a rate of 20%. The salvage value is expected to be $379,400. This new equipment would require maintenance costs of $94,200 at the end of the fifth year. The cost of capital is 9%. Click here to view PV table

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS