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Bramble Industries is considering the purchase of new equipment costing $1,430,000 to replace existing equipment that will be sold for $157,000. The new equipment is
Bramble Industries is considering the purchase of new equipment costing $1,430,000 to replace existing equipment that will be sold for $157,000. The new equipment is expected to have a $203,000 salvage value at the end of its 5-year life. During the period of its use, the equipment will allow the company to produce and sell an additional 34,800 units annually at a sales price of $30 per unit. Those units will have a variable cost of $14 per unit. The company will also incur an additional $87,000 in annual fixed costs. Identify the amount and timing of all cash flows related to the acquisition of the new equipment. (Enter negative amounts using a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Cash Flow Timing Amount Purchase of new equipment $ Salvage of old equipment Sales revenue Variable costs Additional fixed costs Salvage of new equipment Year 0 e Textbook and Media Year 1 Year 2 Save for Later Attempts: 0 of 2 used Submit Answer Year 3 Year 4 Year 5 Years 1-5
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