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Q4) Your corporation is considering replacing equipment. The old machine is fully depreciated and cost $61,745.00...
Please solve thanks Q4) Your corporation is considering replacing older equipment. The old machine is fully depreciated and cost $69,818.00 seven years ago. The old equipment currently has no market value. The new equipment cost $50,217.00. The new equipment will be depreciated to zero using straight-line depreciation for the four- year life of the project. At the end of the project the equipment is expected to have a salvage value of $36,150.00. The new equipment is expected to save the...
You are is considering replacing a five-year-old machine that originally cost $50,000. It was being depreciated using straight-line to an expected salvage value of zero over its original 10-year life and could now be sold for $40,000. The replacement machine would cost $190,000 and have a five-year expected life. It would be depreciated using the MACRS 5-year class life. The actual expected salvage value of this machine after five years is $20,000. The new machine is expected to operate much...
Franco is considering replacing one of its machines. The old machine is being depreciated on a straight-line basis down to a salvage value of zero over the next 5 years. It has a book value of $200,000 and could be sold for $120,000. The replacement machine would cost $600,000 and have an expected life of 5 years, after which it could be sold for $100,000. Because of reductions in defects and material savings, the new machine would produce cash benefits...
A firm is considering replacing a fully-depreciated old plant with a new plant on vacant land the firm already owns. which of the following should be inclu in the firm's cash flow projections? □ A. The original cost of the vacant land. B. The price of the vacant land in the current market. C. The salvage value of the old plant □ D. The depreciation on the new plant. E. B through D.
The Sumitomo Chemical Corporation is considering replacing a 5-year-old machine that originally cost $50,000 and can be sold for $60,000. This machine is totally depreciated. The replacement machine would cost $125,000, and have a 5-year expected life over which it would be depreciated down using the straight-line method and have no salvage value at the end of five years. The new machine would produce savings before depreciation and taxes of $45,000 per year. Assuming a 34 percent marginal tax rate...
The Sumitomo Chemical Corporation is considering replacing a 5-year-old machine that originally cost $50,000 and can be sold for $60,000. This machine is totally depreciated. The replacement machine would cost $125,000, and have a 5-year expected life over which it would be depreciated down using the straight-line method and have no salvage value at the end of five years. The new machine would produce savings before depreciation and taxes of $45,000 per year. Assuming a 34 percent marginal tax rate...
Terminal cash flow-Replacement decision Russell Industries is considering replacing a fully depreciated machine that has a remaining useful life of 10 years with a newer, more sophisticated machine. The new machine will cost $201,000 and will require $29,400 in installation costs. It will be depreciated under MACRS using a 5-year recovery period (see the table for the applicable depreciation percentages). A $30,000 increase in net working capital will be required to support the new machine. The firm's managers plan to...
Your corporation is considering investing in a new product line. The annual revenues (sales) for the new product line are expected to be $176,500.00 with variable costs equal to 50% of these sales. In addition annual fixed costs associated with this new product line are expected to be $43,655.00 . The old equipment currently has no market value. The new equipment cost $55,504.00 . The new equipment will be depreciated to zero using straight-line depreciation for the three-year life of...
Nikky Co. is considering replacing an old machine with a new one. The old one was purchased 3 years ago for $200,000. It is depreciated straight-line to zero over its 10-year life. It is expected to be worth of 85,000 three years later. If Nikky sells it today, Nikky should receive $150,000 for the old machine. The new machine costs $300,000. It has a life of 5 years and will be depreciated straight-line to zero over its 5-year life. It...
Corporation purchased a printing machine three (3) years ago and is considering replacing it with a new one which is faster and easier to operate. The old machine has been depreciated over 3 years using straight-line depreciation. Its original installation cost was $15,000. The old machine has been in use for 2 years, and it can be traded in for $3,500. The new machine will be purchased $24,000 and it will also be depreciated over 3 years using the straight-line...