calculate the incremental depreciation

QUESTION 29 5 points Sa 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 - $100,000 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 Taxes Existing Machine Proposed Mixchine Year 1 $160,000 Year 1 $170,000 150,000 2 170,000 140,000 170,000 140,000 170,000 5 140,000 170.000 2 3 4 3 4 5 The firm pays 40 percent taxes on ordinary income and capital gains Calculate the incremental depreciation. (See Table 11.4) For the toolbar, press ALT F10 (PC) O ALT FN+F10(Mac) B I s Paragraph Arial 10pt THI A I TE