Question

P11-11 (similar to) Question Help its existing computer system, which was Calculating initial investment Vastine Medical, Inc., is considering replacing i purchased 2 years ago at a cost of $331,000. The system can be sold today for $205,000. It is being depreciated using MACRS and a 5-year recovery period (see the table EB). A new computer system will cost $510,000 to purchase and install. Replacement of the computer system would not involve any change in net working capital. Assume a 40% tax rate on ordinary income and capital gains a. Calculate the book value of the existing computer system. b. Calculate the after-tax proceeds of its sale for $205,000. c. Calculate the initial investment associated with the replacement project. a. The remaining book value is s ( (Round to the nearest dollar.) Enter your answer in the answer box and then click Check Answer. parts remaining Clear All Check AnswerData Table 1 5 years7 years10 years 14% Recovery year 3 years 10% 18% 14% 4% 100% 100% Totals 100% er Print Done

0 0
Add a comment Improve this question Transcribed image text
Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

Home nert Page Layout Formulas Data Review View dd-Ins Cut E AutoSum ー E ゴWrap Text ta copy ▼ в 1 프 . Ej-., Δ. : rーー 逻锂函Merge & Center. $, % , 弼,8 Conditional Format eCell Insert Delete Format Sort &Find & Format Painter Formatting as Table Styles2 Clear Clipboard Alignment Number Cells Edting YO ZB YS EXISTING SYSTEM YP YR YT YU YV YZ 30 31 32 COST MACRS 331000 DEPRECIATION BOOK VALUE COST -DEPRE 20 66200.00 264800.00 32 105920.00 158880.00 34 35 36 37 38 39 40 41 42 43 BOOK VALUE AT THE END OF 2 YEARS $ 1,58,880 $ 2,05,000 A $ 1,58,880 B SALE PRICE BOOK VALUE PROFIT ON SALE TAX ON PROFIT AFTER TAX SALE SALVAGE VALUE 46,120 C $ 18,448D $ 1,86,552 A-D 45 46 47 48 11 r INITIAL INVESTMENT COST OF NEW SYSTEM LESS: AFTER TAX SALVAGE VALUE INITIAL INVESTMENT S 5,10,000 $ 1,86,552 3,23,448 MIRR NPV İRR , REPLACEMENT S HPR GMAM LEAC MACRS RATIOCASHBUDGET wacc BONDEPS EBITREPLACEMENT STats NPV BETA LEVERED rences: DX15 福 130% 07-01-2019

Add a comment
Know the answer?
Add Answer to:
P11-11 (similar to) Question Help its existing computer system, which was Calculating initial investment Vastine Medical,...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT