One time after tax cash effect of disposing of the old machine on January 1, 2014.

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Answer 1

Question

Chapter 21, Problem 21.34P

1.a.

To determine

To compute: One time after tax cash effect of disposing of the old machine on January 1, 2014.

1.b.

To determine

To compute: Annual recurring after tax cash operating savings from using the new machine (variable and fixed).

1.c.

To determine

To compute: The cash tax saving due to differences in annual depreciation of the old machine and the new machine.

1.d.

To determine

To compute: The differences in after tax cash flow from terminal disposal of new and old machine.

2.

To determine

To compute: The NPV of machine, also explain if the company should use old machine or buy the new one.

3.

To determine

To compute: The additional after tax cost saving.

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Answer 2

Question

Chapter 21, Problem 21.34P

1.a.

To determine

To compute: One time after tax cash effect of disposing of the old machine on January 1, 2014.

1.b.

To determine

To compute: Annual recurring after tax cash operating savings from using the new machine (variable and fixed).

1.c.

To determine

To compute: The cash tax saving due to differences in annual depreciation of the old machine and the new machine.

1.d.

To determine

To compute: The differences in after tax cash flow from terminal disposal of new and old machine.

2.

To determine

To compute: The NPV of machine, also explain if the company should use old machine or buy the new one.

3.

To determine

To compute: The additional after tax cost saving.

Expert Solution & Answer

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Answer 3

Question

Chapter 21, Problem 21.34P

1.a.

To determine

To compute: One time after tax cash effect of disposing of the old machine on January 1, 2014.

1.b.

To determine

To compute: Annual recurring after tax cash operating savings from using the new machine (variable and fixed).

1.c.

To determine

To compute: The cash tax saving due to differences in annual depreciation of the old machine and the new machine.

1.d.

To determine

To compute: The differences in after tax cash flow from terminal disposal of new and old machine.

2.

To determine

To compute: The NPV of machine, also explain if the company should use old machine or buy the new one.

3.

To determine

To compute: The additional after tax cost saving.

Expert Solution & Answer

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Answer 4

Question

Chapter 21, Problem 21.34P

1.a.

To determine

To compute: One time after tax cash effect of disposing of the old machine on January 1, 2014.

1.b.

To determine

To compute: Annual recurring after tax cash operating savings from using the new machine (variable and fixed).

1.c.

To determine

To compute: The cash tax saving due to differences in annual depreciation of the old machine and the new machine.

1.d.

To determine

To compute: The differences in after tax cash flow from terminal disposal of new and old machine.

2.

To determine

To compute: The NPV of machine, also explain if the company should use old machine or buy the new one.

3.

To determine

To compute: The additional after tax cost saving.

Expert Solution & Answer

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Answer 5

Chapter 21, Problem 21.34P

1.a.

To determine

To compute: One time after tax cash effect of disposing of the old machine on January 1, 2014.

1.b.

To determine

To compute: Annual recurring after tax cash operating savings from using the new machine (variable and fixed).

1.c.

To determine

To compute: The cash tax saving due to differences in annual depreciation of the old machine and the new machine.

1.d.

To determine

To compute: The differences in after tax cash flow from terminal disposal of new and old machine.

2.

To determine

To compute: The NPV of machine, also explain if the company should use old machine or buy the new one.

3.

To determine

To compute: The additional after tax cost saving.

Answer 6

Chapter 21, Problem 21.34P

1.a.

To determine

To compute: One time after tax cash effect of disposing of the old machine on January 1, 2014.

Answer 7

Chapter 21, Problem 21.34P

1.a.

To determine

To compute: One time after tax cash effect of disposing of the old machine on January 1, 2014.

Answer 8

1.b.

To determine

To compute: Annual recurring after tax cash operating savings from using the new machine (variable and fixed).

Answer 9

1.b.

To determine

To compute: Annual recurring after tax cash operating savings from using the new machine (variable and fixed).

Answer 10

1.c.

To determine

To compute: The cash tax saving due to differences in annual depreciation of the old machine and the new machine.

Answer 11

1.c.

To determine

To compute: The cash tax saving due to differences in annual depreciation of the old machine and the new machine.

Answer 12

1.d.

To determine

To compute: The differences in after tax cash flow from terminal disposal of new and old machine.

Answer 13

1.d.

To determine

To compute: The differences in after tax cash flow from terminal disposal of new and old machine.

Answer 14

2.

To determine

To compute: The NPV of machine, also explain if the company should use old machine or buy the new one.

Answer 15

2.

To determine

To compute: The NPV of machine, also explain if the company should use old machine or buy the new one.

Answer 16

3.

To determine

To compute: The additional after tax cost saving.

Answer 17

3.

To determine

To compute: The additional after tax cost saving.

Answer 18

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Answer 19

Expert Solution & Answer

Answer 20

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Answer 21

Ch. 21 - Capital budgeting has the same focus as accrual...Ch. 21 - List and briefly describe each of the five stages...Ch. 21 - Prob. 21.3Q Ch. 21 - Only quantitative outcomes are relevant in capital...Ch. 21 - How can sensitivity analysis be incorporated in...Ch. 21 - Prob. 21.6Q Ch. 21 - Describe the accrual accounting rate-of-return...Ch. 21 - Prob. 21.8Q Ch. 21 - Lets be more practical. DCF is not the gospel....Ch. 21 - All overhead costs are relevant in NPV analysis....

One time after tax cash effect of disposing of the old machine on January 1, 2014.

To compute: One time after tax cash effect of disposing of the old machine on January 1, 2014.

To compute: Annual recurring after tax cash operating savings from using the new machine (variable and fixed).

To compute: The cash tax saving due to differences in annual depreciation of the old machine and the new machine.

To compute: The differences in after tax cash flow from terminal disposal of new and old machine.

To compute: The NPV of machine, also explain if the company should use old machine or buy the new one.

To compute: The additional after tax cost saving.

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Chapter 21 Solutions