Question
7a) In a quest to grow its free cash flow (FCF), SafeDay Inc has just purchased an automated welding machine which it expects will lower
7a) In a quest to grow its free cash flow (FCF), SafeDay Inc has just purchased an automated welding machine which it expects will lower its marginal cost of production thereby enhancing FCF. The new welder cost $129,198 including delivery. It then cost another $5,706 to install, and make it fully functional (i.e. turn-key). Its being depreciated straight-line to a value of zero over 11 years. What is the book value of the welder after one year?
7b) SafeDay Inc also just purchased an hydraulic press for $193,866. It cost $6,923 to make it turn-key.
The press is being depreciated straight-line to a value of zero over 13 years.
What is the book value of the asset after 8 years of depreciation?
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