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Calculating initial investment DuPree Coffee Roasters, Inc., wishes to expand and modernize its facilities. The installed cost of a proposed computer-controlled automatic-feed roaster will be
Calculating initial investment DuPree Coffee Roasters, Inc., wishes to expand and modernize its facilities. The installed cost of a proposed computer-controlled automatic-feed roaster will be \\( \\$ 135,000 \\). The firm has a chance to sell its 3-year-old roaster for \\( \\$ 34,100 \\). The existing roaster originally cost \\( \\$ 59,400 \\) and was being depreciated using MACRS and a 7-year recovery period (see the table ). DuPree is subject to a \40 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: d. Calculate the initial investment associated with the proposed new roaster. Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes *These percentages have 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
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