Question

Initial investment Basic calculation Cushing Corporation is considering the purchase of a new grading machine to replace the existing one. The existing machine was purchased 2 years ago at an instaled cost of $19,400; it was being depreciated under MACRS using a 5-year recovery period. (See table for the applicable depreciation percentages.) The existing machine is expected to have a usable life of at least 5 more years. The new machine costs $34,100 and requires $4.500 in installation costs. it will be depreciated using a 5-year recovery period under MACRS The existing machine can current y be sold for $24,800 without incurring amy removal or cleanup costs. The rm is subject to a 40% ax rate Calculate the initial investment associated with the proposed purchase of a new grading machine Round to the nearest dollar.) Data Table The initial investment will be (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year 7 years 14% 25% 18% 12% 9% 9% 9% 4% 10 years 10% 18% 14% 12% 9% 8% 7% 6% 6% 6% 4% 100% 5 years 3 years 33% Recovery year 32% 19% 12% 12% 5% 15% 7% 10 100% 100% 100% Enter your answer in the answer box and then click Check Answer.

Answer 1

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