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ALL INFORMATION IS GIVEN. The answers are provided, but need help with how to get the answers given. 94 87 88 Question 9a A flour
ALL INFORMATION IS GIVEN. The answers are provided, but need help with how to get the answers given.
94 87 88 Question 9a A flour mill is considering buying a new jumbo sifter, which would have an installed cost of $80,000. The new one 89 would replace the existing sifter that was purchased 3 years ago at an installed cost of $60,000. If the company 90 $42,600 moves forward with the replacement, it could sell the old sifter for $19,000. Purchasing the new sifter would result 91 Question 9b in the company's current assets increasing by $10,000 and current liabilities increasing by $8,000. 92 The company uses the 5-year MACRS table for depreciation and is taxed at 21%. 93 $17,400 a) What is the accumulated depreciation of the old sifter? Question 9c b) What is the current book value of the old sifter? 95 c) What is the amount of depreciation recapture/recovery? 96 $1,600 97 Question 9d d) What is the tax on the sale of the old sifter? 98 $336 100 Question 9e e) What are the after-tax proceeds from the sale of the old sifter? 101 102 $18,664 103 Question 9f f) What is the change in Net Working Capital? 104 105 $2,000 106 Question 9g g) What is the initial investment for the project? 107 108 $63,336 99Step by Step Solution
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