managerial accounting Example Old New $390,000 Purchase Price Book value Current disposal value Salvage value Useful...
Book & Accounting Bookstore has used an old coding machine for 3 years and to buy a new coding machine to help control book inventories. The price of new machine is $35,000 and it requires working capital of $4,000. Its estimated useful life is 5 years and estimated salvage value for the calculation of depreciation is $5,000. The disposal value of the new machine will be $6,000 at the end of its useful life. Recovery of working capital will be...
The Zed Company is considering the purchase of a new machine. The new machine will have zero salvage value and a useful life of 7 years. The company uses a MARR of 3%. Zed has bids from 3 manufacturers. The information for each machine is in the table below: Machine AMachine BMachine C $2,000$3,000$8,000 Initial Cost $700$3,000 Efficiency Savings per Year $700 $400 $700 $300 Annual Maintenance Costs 1. What is the B/C Ratio for machine A: 2. What is...
Rockyford Company must replace some machinery that has zero book value and a current market value of $3,000. One possibility is to invest in new machinery costing $52,000. This new machinery would produce estimated annual pretax cash operating savings of $20,800. Assume the new machine will have a useful life of 4 years and depreciation of $13,000 each year for book and tax purposes. It will have no salvage value at the end of 4 years. The investment in this...
Rockyford Company must replace some machinery that has zero book value and a current market value of $2,400. One possibility is to invest in new machinery costing $46,000. This new machinery would produce estimated annual pretax cash operating savings of $18,400. Assume the new machine will have a useful life of 4 years and depreciation of $11,500 each year for book and tax purposes. It will have no salvage value at the end of 4 years. The investment in this...
Rockyford Company must replace some machinery that has zero book value and a current market value of $4,200. One possibility is to invest in new machinery costing $47,000. This new machinery would produce estimated annual pretax cash operating savings of $18,800. Assume the new machine will have a useful life of 4 years and depreciation of $11,750 each year for book and tax purposes. It will have no salvage value at the end of 4 years. The investment in this...
New equipment purchase, income taxes. Ella's Bakery plans to purchase a new oven for its store. The oven has an estimated useful life of 4 years. The estimated pretax cash flows for the oven are as shown in the table that follows, with no anticipated change in working capital. Ella's Bakery has a 14% after-tax required rate of return and a 35% income tax rate. Assume depreciation is calculated on a straight-line basis for tax purposes using the initial investment...
This is a cost accounting problem, please show all work. New equipment purchase, income taxes. Ella's Bakery plans to purchase a new oven for its store. The oven has an estimated useful life of 4 years. The estimated pretax cash flows for the oven are as shown in the table that follows, with no anticipated change in working capital. Ella's Bakery has a 14% after-tax required rate of return and a 35% income tax rate. Assume depreciation is calculated on...
12-6. Rockyford Company must replace some machinery that has zero book value and a current market value of $3,000. One possibility is to invest in new machinery costing $52,000. This new machinery would produce estimated annual pretax cash operating savings of $20,800. Assume the new machine will have a useful life of 4 years and depreciation of $13,000 each year for book and tax purposes. It will have no salvage value at the end of 4 years. The investment in...
New equipment purchase, income taxes. Ella's Bakery plans to purchase a new oven for its store. The oven has an estimated useful life of 4 years. The estimated pretax cash flows for the oven are as shown in the table that follows, with no anticipated change in working capital. Ella's Bakery has a 14% after-tax required rate of return and a 35% income tax rate. Assume depreciation is calculated on a straight-line basis for tax purposes using the initial investment...
Rockyford Company must replace some machinery that has zero book value and a current market value of $2,600. One possibility is to invest in new machinery costing $48,000. This new machinery would produce estimated annual pretax cash operating savings of $19,200. Assume the new machine will have a useful life of 4 years and depreciation of $12,000 each year for book and tax purposes. It will have no salvage value at the end of 4 years. The investment in this...