Blue Spruce Vita produces a wide range of herbal supplements sold nationwide through independent distributors In response to an increasing demand for its products, the company is considering the purchase of a new packaging machine to replace the seven year old machine currently in use The new machine will cost $175,050, and installation will require an additional $3,250 The machine has a useful life of 10 years and is expected to have a salvage value of $3,765 at that time The variable cost to operate the new machine is $11 65 per carton compared to the current machines variable cost of $11 74 per carton, and Blue Spruce Vita expects to pack 257,000 cartons each year If the new machine is purchased, Blue Spruce Vita will avoid a required $11,425 overhaul of the current machine in four years The current machine has a market value of $13,075 Identify the amount and timing of all cash flows related to the acquisition of the new packaging machine (Enter negative amounts using a negative sign preceding the number e g 45 or parentheses e g (45) ) Cash Flow Timing Amount Purchase price Select a period of timeSelect a period of time Year 0Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10Years 1 10 $Enter a dollar amount Enter a dollar amount Installation Select a period of timeSelect a period of time Year 0Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10Years 1 10 Enter a dollar amountEnter a dollar amount Salvage of old equipment Select a period of timeSelect a period of time Year 0Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10Years 1 10 Enter a dollar amountEnter a dollar amount Salvage of new equipment Select a period of timeSelect a period of time Year 0Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10Years 1 10 Enter a dollar amountEnter a dollar amount Variable cost savings Select a period of timeSelect a period of time Year 0Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10Years 1 10 Enter a dollar amountEnter a dollar amount Avoided overhaul Select a period of timeSelect a period of time Year 0Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10Years 1 10 Enter a dollar amountEnter a dollar amount

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Posted on Jul 10, 2024

Blue Spruce Vita produces a wide range of herbal supplements sold nationwide through independent distributors. In response to an increasing demand for its products, the

Blue Spruce Vita produces a wide range of herbal supplements sold nationwide through independent distributors. In response to an increasing demand for its products, the company is considering the purchase of a new packaging machine to replace the seven-year-old machine currently in use. The new machine will cost $175,050, and installation will require an additional $3,250. The machine has a useful life of 10 years and is expected to have a salvage value of $3,765 at that time. The variable cost to operate the new machine is $11.65 per carton compared to the current machines variable cost of $11.74 per carton, and Blue Spruce Vita expects to pack 257,000 cartons each year. If the new machine is purchased, Blue Spruce Vita will avoid a required $11,425 overhaul of the current machine in four years. The current machine has a market value of $13,075. Identify the amount and timing of all cash flows related to the acquisition of the new packaging machine. (Enter negative amounts using a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Cash Flow	Timing	Amount
Purchase price	Select a period of timeSelect a period of time Year 0Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10Years 1-10	$Enter a dollar amount Enter a dollar amount
Installation	Select a period of timeSelect a period of time Year 0Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10Years 1-10	Enter a dollar amountEnter a dollar amount
Salvage of old equipment	Select a period of timeSelect a period of time Year 0Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10Years 1-10	Enter a dollar amountEnter a dollar amount
Salvage of new equipment	Select a period of timeSelect a period of time Year 0Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10Years 1-10	Enter a dollar amountEnter a dollar amount
Variable cost savings	Select a period of timeSelect a period of time Year 0Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10Years 1-10	Enter a dollar amountEnter a dollar amount
Avoided overhaul	Select a period of timeSelect a period of time Year 0Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10Years 1-10	Enter a dollar amountEnter a dollar amount