calculate the book value of the existing asset being replaced

QUESTION 32 5 points Saved Table 11.4 Degnan Dance Company, Inc., a manufacturer of dance and exercise apparel, is considering replacing an existing piece of equipment with a more sophisticated machine. The following information is given. Facts Existing Machine Proposed Machine Cost = $190,000 Cost - $150,000 Purchased 2 years ago Installation - $20,000 Deprecation using MACRS Over Deprecation--the MACRS a 5-year recover schedule 5-year recovery schedule will be used Current market value $105,000 Five year usable life remaining Five year usable life expected Earnings before Depreciation and Taces Existing Machine Proposed Machine Year 1 $160,000 Year 1 $170000 150,000 170,000 140,000 3 170,000 140,000 170,000 140,000 170,000 2 2 3 4 5 4 5 The firm pays 40 percent taxes on ordinary income and capital gains Calculate the book value of the existing asset being replaced. (See Table 11.4) For the toolbar, press ALT F10(PC) or ALT+FN-F10 (Mac), R 1 U . Dararanh Aria int . 11 7