Calculating initial cash flowDuPree Coffee Roasters, Inc., wishes to expand and modernize its facilities. The installed cost of a proposed computer-controlled automatic-feed roaster will be

$126,000.

The firm has a chance to sell its

3-year-old

roaster for

$35,900.

The existing roaster originally cost

$60,500

and was being depreciated using MACRS and a 7-year recovery period (see the table

LOADING...

).

DuPree is subject to a

21%

tax rate.

a. What is the book value of the existing roaster?

b. Calculate the after-tax proceeds of the sale of the existing roaster.

c. Calculate the change in net working capital using the following figures:

Anticipated Changes in Current Assets and Current Liabilities
Accruals	$20,700
Inventory	+49,700
Accounts payable	+40,200
Accounts receivable	+69,800
Cash	0
Notes payable	+15,400

d. Calculate the initial cash flow associated with the proposed new roaster.

Calculating initial cash flow DuPree Cofee Roasters, Inc., wishes to expand and modernize its facilities. Tho installed cost of a proposed oomputer-controled automatic-foed roaster will be $126,000. The firm has a chance to sell its 3 -year-old roastor for $35,900. The existing roaster originally cost $60,500 and was being depreciated using MACRS and a 7-year recovery period (see the table DuPree is subject to a 21% tax rate. a. What is the book value of the existing roaster? b. Calculate the after-tax proceeds of the sale of the existing roaster. c. Calculate the change in net working capital using the following figures: a. The remaining book value of the existing roaster is $ (Round to the nearest dollar.) (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Rounded Depreciation Percentages by Recovery Year Using MACRS for. First Four Property Classes - Inese percentages nave been rounded to the nearest whole percent to simplify calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year convention. b. Calculate the after-tax proceeds of the sale of the existing roaster c. Calculate the change in net working capital using the following fig d. Calculate the initial cash flow associated with the proposed new ro a. The remaining book value of the existing roaster is $ (Round to