Assignment G Gaved Help Seve&Exit Check my Rockyford Company must replace some machinery that has zero book value and a current market value of $3,600. One possibility is to invest in new machinery costing $58,000. This new machinery would produce estimated annual pretax cash operating savings of $23,200. Assume the new machine will have a useful life of 4 years and depreciation of $14.500 each year for book and tax purposes. It wll have no salvage value at the end of 4 years. The investment in this new machinery would require an additional $4,800 investment of net working capital. (Assume that when the old machine was purchased, the incremental net working capital required at the time was $O.) If Rockyford accepts this investment proposal, the disposal of the old machinery and the investment in the new one will occur on December 31 of this year. The cash flows from the investment are expected to occur over a four-year period. Rockyford is subject to a 40% income tax rate for all ordinary income and capital gains and has a 11% weighted average after-tax cost of capital. All operating and tax cash flows are assumed to occur at year-end. (For Parts 2 and 3, use the relevant table from Angendix C-Table 1 or Iable 2) Required 1. Determine the after-tax cash flow arising from disposing of the old machinery 2 Determine the present value of the after-tax cash flows for the next 4-years attributable to the cash operating savings 4 Which one of the following is the proper treatment forkhe additional $4.800 of net working capital required in the current year? Complete this question by entering your answers in the tabs below. Reauired 1 Required 2 Required 3 Reauired 4 Prex 6of 10 Next > 2. Determine the present value of the after-tax cash flows for the next 4-years attributable to the cash operating savings 3. Determine the present value of the tax shield effect of depreciation for year 1 4. Which one of the following is the proper treatment for the additional $4,800 of net working capital required in the current year? Complete this question by entering your answers in the tabs below. Required 1 ed 2 Required 3Required 4 Determine the after Required 2 ow arising from disposing of the old machinery After-tax cash fow2.160 Required 2 1 Determine the after tax cash flow arising from disposing of the old mach 2 Determine the present value of the after-tax cash flows for the next 4-years attributable to the cash operating savings 3. Determine the present value of the tax shield effect of depreciation for year 1 4. Which one of the following is the proper treatment for the additional $4,800 of net working capital required in the current year? Complete this question by entering your answers in the tabs below Required 1 Requed 2 Required3 Reqir 4 Determine the present value of the after-tax cash flows for the next 4-years attributable to the cash savings. (Round your answer to the nearest whole dollar amount.) operating value Required 1 Required 3> 1. Determine the after-tax cash flow arising from disposing of the old machinery. 2. Determine the present value of the after-tax cash flows for the next 4-years attributable to the cash operating savings. 3. Determine the present value of the tax shield effect of depreciation for year 1 4. Which one of the following is the proper treatment for the additional $4,800 of net working capital required in the current year? Complete this question by entering your answers in the tabs below Required 1 Required 2Requir3Required 4 Determine the present value of the tax shield effect of deprecation for year 1. (Round your ansver to the nearest whole dollar amount.) d your answer to the nearest whole esent value Required 2 Required 4
