Calculating 'cash flows at the start' Strawberry Corporation is evaluating whether to replace its old ice cream making equipment with new ice cream making equipment that costs $110,000 immediately. The old equipment is fully depreciated for tax purposes and can be sold today for $20,000. The company wants to sell its ice cream in a new type of container which keeps the ice cream from melting quickly. Strawberry Corporation has an unused packing machine located in it's warehouse which can produce these new containers. This packing machine has a book value of $6,000, and a current market value of $20,000. The new ice cream making equipment has a useful life of eight years, and will result in an increase in inventory by $7,000 from its existing level of $3,000, and accounts receivable will decrease by $1,000 from its existing level. The company will use debt totalling $40,000 to finance the purchase of the new ice cream making equipment today. Strawberry Corporation spent $2,000 last year on consulting fees to provide strategies for reducing it's operating costs. Assume the company tax rate is 30%. What are the 'cash flows at the start'? [Describe and list separately each cash flow and the corresponding amount on a new line, as in lecture and tutorial examples.] [Where applicable, show as much working out as possible, otherwise you may be penalised). Edit View Insert Format Tools Table 12pt Paragraph A Tv Calculating 'cash flows at the start' Strawberry Corporation is evaluating whether to replace its old ice cream making equipment with new ice cream making equipment that costs $110,000 immediately. The old equipment is fully depreciated for tax purposes and can be sold today for $20,000. The company wants to sell its ice cream in a new type of container which keeps the ice cream from melting quickly. Strawberry Corporation has an unused packing machine located in it's warehouse which can produce these new containers. This packing machine has a book value of $6,000, and a current market value of $20,000. The new ice cream making equipment has a useful life of eight years, and will result in an increase in inventory by $7,000 from its existing level of $3,000, and accounts receivable will decrease by $1,000 from its existing level. The company will use debt totalling $40,000 to finance the purchase of the new ice cream making equipment today. Strawberry Corporation spent $2,000 last year on consulting fees to provide strategies for reducing it's operating costs. Assume the company tax rate is 30%. What are the 'cash flows at the start'? [Describe and list separately each cash flow and the corresponding amount on a new line, as in lecture and tutorial examples.] [Where applicable, show as much working out as possible, otherwise you may be penalised). Edit View Insert Format Tools Table 12pt Paragraph A Tv